Why this year’s holiday Season will be uniquely challenging for retailers
The current headwinds of a constricted supply chain due to labour shortages—coupled with increased competition from both online and brick-and-mortar grocers and the broad complications of the war in Ukraine—have coalesced to make the upcoming holiday season one of the most challenging in decades.
During the summer months, retailers have seen the usual seasonal dip as people go on holiday. This has provided them a chance to catch their breath, but as we know, it will be short-lived: back-to-school season is already upon us. Before we know it, a crop of holidays will barrage grocers for months. Looking ahead to Bonfire Night/Guy Fawkes Day, Christmas, Boxing Day, and New Years Day, grocers will be flat out from November onward.
Here are some tips for how grocers can thrive in an increasingly competitive environment—and what they can do to prepare for the coming months.
Have a plan for the holiday season
- Best to start the holiday rush off on the right foot to avoid playing catch-up. Think of what your hook will be for this year—what kind of value add can you offer? Maybe it’s a special delivery service, or providing family bundle meals—people are busy during the holidays, and pre-cooked options baked into planograms will go a long way. Perhaps consider special deals for larger orders or bulk ordering as families restock their pantries for the colder, busier months where time is at a premium and convenience becomes more and more attractive.
Upgrade your tech
- Now is the time to seek, assess, and strategize your 2023 technology roadmap. Do an audit of your technology systems for operations, merchandising, ecommerce, supply chain and inventory control. Identify what needs upgrading or what is missing with the goal to build for scale and efficiency. A seamless labour management system is a must, as are CRM, category management and inventory tracking platforms. AI-driven retail shelf camera systems can integrate with inventory management and speed up real-time ordering, stocking, and organising goods on the floor—these systems have had transformative effects with little setup costs (both in time and money) for grocers who have adopted them. It’s also a good time to make sure your customer experience is hitting all the points you want it to, both in-store and online (and if your grocery doesn’t have an online marketplace, now might be the time for that).
Build transparency into your process
- Grocers of all sizes got a major boost during the pandemic, as restaurants closed and a lot more of the food market share shifted their way. These retailers worked hard to accelerate the innovations they needed to keep serving customers, handle an influx of traffic, and allow for curbside or delivery options and enhanced health procedures. As a result of the significant investments major grocers made, they reaped large sales and market share growth–a benefit customers are aware of. So as inflation places more pressure on customers, retailers have an opportunity to build loyalty and appreciation by not taking advantage of rising costs to increase their pricing indices. This is a time to give back, to build stronger customer relationships. Customers know grocers did well during that time, so they will have little tolerance for inflationary squeezes. Maintain transparency in pricing, packaging, and offerings to win new customers and keep current ones around. Further, build out your loyalty programs now—rewarding loyal customers will go a long way toward keeping them happy and enticing new ones.
With a difficult labour market not looking like it will get better anytime soon, and a supply chain so snarled that even the smallest improvement will have an outsized positive impact on the bottom line, these steps will be just what the doctor ordered when the holiday comes around. Now is the right time to put a plan, and the necessary tools, in place to survive and thrive amongst modern retail competition.
To find out more about Focal Systems and the services they provide to the retail industry, click here.
This article was also published in The Retailer, our quarterly online magazine providing thought-leading insights from BRC experts and Associate Members.