Service vs Sales: How to Make the Most of the Holiday Rush
Despite retailers bringing out their holiday decorations as early as September, Black Friday is when the holiday shopping season truly begins, though it continues all the way up to Super Saturday when last minute shoppers scramble to find gifts right before Christmas. Prices are slashed, hours of operation are extended, and extra staff are brought on to ensure businesses can handle the rush, but is that really enough?
Not according to Consumer Behavior and Expectations: The 2017 Holiday Shopping Report by Trustpilot.
Trustpilot is a leading online consumer review destination, with millions of reviews on hundreds of thousands of businesses, and used their data to compile a comprehensive analysis of the 2015 and 2016 holiday shopping seasons. What stood out the most to me was their data on Black Friday, specifically how 40% of businesses saw a considerable increase of revenue. That’s right, despite the stampede of customers that came rushing through their doors and the surge of online orders that flooded their inboxes, the report clearly shows that the remaining 60% of retailers felt a decline in their revenue compared to the years before. This is troubling news indeed, many companies depend on the holiday profits to get them out of the red, that’s how Black Friday got its name.
However, by looking over all this data, we can see why revenue was down for some companies and not others. But more importantly, we can see what needs to change to prevent it from happening again.
These findings on consumer behavior are all drawn from keyword analysis on consumer reviews from around the world, and the first thing we see is that reviews drastically spike during the months of November and December. This is perfectly natural of course, people do the bulk of their shopping during this period and are eager to share their opinions online, either to beam about how happy they were with one company or to bemoan the experience they suffered through with another. What’s important is that the reviews aren't just being posted by people who’ve made purchases, they’re being read by people looking to make purchases, they’re actually being relied on as part of the purchasing process.
With so many options available to the modern consumer, and with so many of them waiting longer and longer to get the gifts they need, people aren’t just going to the same old stores they usually do. Rather than driving down to the mall and browsing for the items on their list, people are now investing a great deal of time and effort into online research, seeing exactly what companies have exactly what they want and at exactly what price, comparing the competition like never before. That’s all well and good for sites like Trustpilot, but for retailers, this scrutiny can make or break their performance for the year.
Consumers are just more critical than they used to be. They don’t swallow their pride and brush off annoyances any longer, they put it online for the world to see, and the world really does see it. The research shows that amount of reviews left in December 2016 were 30% higher than those left in the previous year, and that review searches on Trustpilot jumped by 31% during November 2015. What’s more, the surveys demonstrate that consumers trust online reviews by total strangers more than they do the recommendations of their own friends and family, and their spending habits reflect this.
While this mindset certainly improves the shopping experience overall and helps expose negligent companies, the downside is that it allows people with unreasonable expectations to poison the well of otherwise properly run establishments.
Looking at the reviews themselves, we see the same keywords pop up in both the highest rated and lowest rated reviews. Whether they gave the company one star or five, the terms “customer service” and “delivery” always play a deciding role in their judgement, even more so than “price.” People always want the best deals, but no one wants to save money if it means they have to put up with unhelpful employees, or if the discounted items they purchased won’t be delivered on time. Granted, these negative reviews peak just before Christmas, when last minute shoppers are upset and blaming their own irresponsibility on others, but all the average consumer sees is a bad mark on the company’s name, the context behind it isn’t always so evident. Regardless, retailers should focus on building and preserving their reputation throughout the year, and ensuring their departments have the resources to meet consumer needs can help make the good reviews outweigh the bad.
No one is going to deny that the holiday shopping season is important for both online and brick and mortar businesses, some retailers achieve revenue increases from 14% to 48% on Black Friday alone. However, they didn’t reach those numbers by focusing on the sales alone, and neither will you.
Online resources allow consumers to compare all their options from the comfort of their home. Because of this, businesses must now monitor how their promos compare to the competition on a daily basis, and be flexible enough to adjust their sales from November to January, covering the entire pre- and post-holiday period. If the business is online, an active online marketing strategy must be put into effect, aggressively if need be, if they ever want to stand out amongst the rest of the attractive offers funneling into consumers’ inboxes during this time. But more than anything, a business should not invest their entire budget and efforts on the promos themselves. Not only must additional staff be hired, but all employees must be given training to improve their customer service skills, familiarizing them not just with the store products but with the company policies. Fast delivery time and an efficient return or exchange process will yield far better results than whatever discounts and deals you slap on the tags.
It can be a difficult balance to achieve, and the chaos of the holiday season always finds a way to catch us by surprise, but taking these steps can help you end the old year with high profits and start the new year with positive reviews.