Take Action For Next Season Before It’s Too Late
According to the National Retail Foundation, the 2022 holiday season was a slight disappointment by the numbers. Following projections of a 6% to 8% sales growth over 2021, the reality was 5.3%, or $936.3 billion. Though this is still respectable growth in the face of inflation and interest rates, the question naturally arises: how might things have gone differently? What could retailers have done differently to crack that 6% figure? After all, that 5.3% number isn’t adjusted for inflation, which was at 6.5% over the holiday season. Retail could do better.
Opportunities Not Taken: Forgetting The Frontline
Looking back, the 2022 holiday season for retailers was the first in several years largely unconstricted by COVID-19 requirements and anxieties. There was an opportunity for retailers to capitalize on consumer anticipation around in-person, in-store experiences and win back some wallet share. Instead, companies continued to overinvest in eCommerce, rather than in frontline eLearning. The North American eCommerce conversion rate in the third quarter of 2022 declined 12% . Meanwhile, says Reuters, holiday season winners included stores that placed an emphasis on clearing out excess inventory in brick-and-mortar stores .
To the extent that retailers are not implementing changes in store to move inventory and retain customers, they’re leaving money on the table. More broadly, the time has come for retailers to grasp that a truly omnichannel strategy—driving purchases in-store and online—requires technologizing the frontline workforce, not just investing in the digital customer experience (CX). It’s not too far off to suggest that while retailers were wowed by the “shiny new object” of eCommerce, they forgot about their most valuable, constant, and controllable resource, their frontline.
Picture this: you’ve been hired as a holiday-season employee at a luxury retailer. The year is 2022. At some point, you sit through a several-years-old onboarding video. You download one app for incentives, one for CRM, and another for the digital library of trainings. You enter each customer interaction blind, grasping your way as best as you can toward a sale. You feel you could be doing better, but you don’t know how. At the end of the day, you check your new associate email, only to find that you missed some messaging about a new incentive.
Cumbersome, dispersed legacy systems for incentivization, eLearning, and client management put retail workers at an extraordinary disadvantage in the battle for consumer attention and spending. After all, think of who (or rather, what) they’re competing with: the endless personalization of algorithmic targeting, which benefits purely online brands with no frontline to consider, as long as retailers aren’t technologizing their workforce. With the frontline left high and dry, it’s no wonder that 6% of all possible retail sales are lost due to a lack of service .
Cutting Costs While Driving Revenue: The Frontline Enablement Solution
With cost increases on everything from manufacturing to labor to logistics, it’s the worse time ever for retailers to lose. Now, with the 2022 holiday season in the rear view, revenues and share prices are falling across the sector, with Home Depot  and Walmart  showing earnings losses. By the time the next holiday season for retailers comes around, the market leaders will have seized the opportunity to invest and transform—but everyone else may be in for a not-very-happy holidays.
What will these market leaders have done to notch up their holiday revenue compared to last year? They will have embraced frontline enablement technology, which we’ve previously covered in these pages, but not from the perspective of how that tech actually cuts costs and drives revenue .
Recently, we published some significant research on how frontline enablement drives concrete, measurable business outcomes. It’s not just digitalizing for the sake of digitalization, but rather for the purpose of cutting down on the company’s tech spend, while driving revenue through the frontline at scale. Modern frontline enablement technology brings together multiple tools under the umbrella of a single app, so associates don’t have to bounce around from one experience to another.
Retailers want to cut the cost of maintaining multiple tools from different vendors—tools that should be talking to each other, to boot, like incentivization and training—and now they can. They can even do so without slimming down the frontline experience. In fact, the reverse is true.
With this setup, data ideally will flow from tool to tool, so that each associate interaction with the platform makes it more personalized to their goals and needs. Rather than a one-size-fits-all, conformist User Experience (UX), being an associate becomes more like gig work—more engaging, and more suited to the individual’s sales goals, preferences, and past performance.
At the same time that retailers cut costs by consolidating tools under a single app, they boost revenue in the way that makes sense for their specific company. Frontline enablement technology integrates with retailers’ external data systems, automatically tailoring the frontline experience to boost corporate KPIs, like sales performance and brand-retailer collaboration. In essence, retailers are seeing “double personalization”: on the level of the associate needs, and on the level of the company’s.
Rethinking The Holiday Season For Retailers
To boil it down, by “technologizing” the frontline with the right platform, retailers are doing more, driving revenue at scale according to their most relevant KPIs. They’re smartly altering the frontline’s UX according to real-time metrics, emphasizing the right kind of action at the right time (for example, converting overstocked inventory). But they’re doing more with less, cutting costs by using technology that brings together multiple tools in one app. This reduces the need to invest in more apps than necessary, to juggle multiple tech vendors, and to train associates in multiple UXs. At a time when retailers are looking to slash costs, this is one way to do so, while through the same action, also boosting revenue.
Hopefully, by the time this holiday season rolls around, retailers will have learned their lesson. Ignore the frontline at your own risk. But to do so, they’ll have to start adapting to the world of new technologies and clientele expectations today, not tomorrow.
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