2021 Holiday Retail Trends That Will Save Your Customer Experience


2021 Holiday Retail Trends That Will Save Your Customer Experience

Is Your Retail Brand Ready For the 2021 Holiday Shopping Season?

With the 2021 holiday shopping season well underway the data trends are showing that customer experience is proving to be the factor that is making the most impact on sales for retailers and pure e-Commerce brands.

In this article we’re going to be covering some of the most prominent obstacles pure e-Commerce and retail brands are facing and what you can do to capitalize on the shortfalls of competitors in the area of customer experience.

With one pandemic-influenced holiday season under their belts, retail brands might be tempted to run with 2020’s playbook, but just as the pandemic itself keeps shifting into new phases, so does its impact on the retail landscape.

2020 was a banner year for e-Commerce. In the US alone, e-Commerce grew 32%, making up 14% of total US retail sales at the end of 2020. Almost half of Americans plan to do even more online shopping this holiday season than in past years, which is music to the ears of omnichannel and pure e-Commerce retailers.

While Black Friday 2021 and beyond will bear some resemblance to last year, there are significant new trends shaping what is projected to be another booming season for e-Commerce.

Let’s look at the lessons we learned from 2020 and what challenges we can expect to see in 2021.

The Retail Supply Chain is Making Everyone Miserable

Disruptions in supply chain, fulfillment and customer service drove an increase in customer support requests in 2020, with inquiries across the order life-cycle ballooning.

In fact, customer support inquiries related to order issues as a percentage of overall inquiries grew nine-fold at the height of the pandemic and even as states have reopened, this category of inquiry still represents a third of all customer support engagements shoppers are having with brands.

Retailers that invested in CX automation prior to the pandemic and large retailers that were able to react quickly to this increased customer experience friction and meet customer expectations for real-time order information at every stage of the purchase process came out on top with shoppers in 2020.

This year promises more of the same friction around key service moments and the same need for upgraded customer engagement.

On the supply chain front, things have actually gotten markedly worse across the globe. If you’ve noticed empty spots on store shelves again like the early days of the pandemic, you’re seeing the tip of the iceberg that is the current global supply chain meltdown.

With congested ports, a trucking industry that can’t find enough drivers to keep trucks on the road, changes to USPS and other carriers’ delivery standards, manufacturing slowdowns and shortages of raw materials, logistics experts and economists are calling it a unprecedented ‘perfect storm’ of factors combining to make it difficult to acquire everything from books to alcohol to new cars.

The situation has gotten so dire that major retailers have even started chartering their own cargo ships in order to ensure sufficient inventory for the holiday season.

For brands that can’t go to these extremes, proactive communication is absolutely vital to your CX this holiday season.

Prepare for an increased volume of customer service inquiries around inventory, back order status, fulfillment delays and more second-degree inquiries that are caused by inevitable out of stock and fulfillment delay situations.

While many retailers are adding information to their websites to educate customers about protracted delivery timelines and encouraging them to order earlier than usual, these pre-purchase warnings aren’t sufficient.

Customers will be looking for on-demand, real-time full order life-cycle visibility to understand where their order is in the fulfillment process and when it will ultimately arrive.

With seasonal employees in short supply, staffing up your contact center may not be feasible.

However, automated customer experience (CX) solutions offer AI-powered digital workers that can effectively deliver automated resolution for up to 85% of the high volume of customer support inquiries you’ll be fielding this season, relieving the burden and reliance on live agents.

Seasonal Customer Support Staff Are Scarce

Expect seasonal customer support staff to be scarce and harder to acquire for the 2021 holiday shopping season.

Usually, late summer through early fall is when retailers increase their customer service agent headcount by 50% – 200% to prepare for the holiday season.

These temporary employees are trained to cover basic yet essential support issues during the busiest period of the retail calendar. This year, the pandemic and a tight labor market have created a hiring shortage, with only 2% of retailers reporting they’ve been able to attract temporary staff without issue.

While retailers are turning to a variety of options to ensure sufficient seasonal labor, from incentivizing current employees to take on extra shifts to trimming operating hours, embracing customer support automation is a more cost-effective and scalable option to insulate your brand from fluctuations in the seasonal labor market.

AI-powered digital workers that provide real-time, cross-channel engagement and assistance across the full order life-cycle eliminate dependence on holiday hires, while increasing your capacity to deliver excellent, around-the-clock CX, no matter how busy your Black Friday turns out to be.

With over 60% of consumers globally reporting that they’ve switched brands because of a poor customer service experience, this is not the time to drop the ball on your customer care efforts.

Be Ready For Increased Returns and Order Modifications

Increases in returns and order modifications is going to be the new normal for the 2021 holiday season.

Even in “normal” times, the holidays are always high season for returns, with a significant percentage of purchased gifts missing the mark with recipients. The pandemic-spurred growth of e-Commerce, however, has also increased the volume of returns retailers are faced with.

In fact, returns of online purchases doubled from 2019 to 2020 and we expect them to be a challenge during the 2021 holiday season. Retailers can’t eliminate returns, but they can take steps to better manage their return process and volume.

This starts with the pre-purchase phase, where the emphasis needs to be on providing real-time, fulsome, accessible product information to increase customer confidence in their purchase. This might involve a tool like AI-powered web-chat to engage shoppers and offer automated buying assistance before they buy, offering answers to product-related questions and providing support for understanding promos and applying discount codes.

On the back-end, customer care solutions that use predictive intelligence to identify orders likely to involve returns (someone buying multiple colors or sizes of the same product, for example) can help you assign appropriate resources to manage order volume.

Your customer-facing return process also needs to be as seamless as possible. Your shoppers should be able to initiate the return from their device of choice, choose the return method that is most convenient to them and access up-to-date information on the status of their refund at their convenience.

In addition to returns, you’ll also need to be prepared to handle order modification requests, which are becoming increasingly common as shoppers look to add or remove items and/or change fulfillment or payment options before their order ships. Linc’s own research shows a direct correlation between fulfillment time and customer service inquiries related to order modifications–the longer the fulfillment window, the more customer inquiries brands receive about order modifications.

When fulfillment takes more than three days, almost 40% of CS inquiries a brand receives are related to order modifications. While faster fulfillment might not be operationally possible, especially during the holidays, your brand should be prepared to handle the increased volume of inquiries around order modifications, potentially leveraging an AI-powered CX solution to relieve the burden on live agents.

Shifts in Payment and Order Delivery Preferences Are Here to Stay

Expect your customers to be shifting the way they pay and and their order delivery preferences.

The Covid-19 pandemic shifted customer behavior and preferences at key customer service moments.

The pre-purchase process went fully digital, with mobile solidifying its place as the key channel for product research. Customer support inquiry volume across the order life-cycle increased dramatically, with e-Commerce customers both new and old seeking support on promo codes, fulfillment timelines, order modifications, pickup options and post-delivery support.

In 2020, shoppers looked for more communication than ever from brands they bought from and sought increased control across the order life-cycle, particularly as it relates to fulfillment options. This will continue over the 2021 holiday season.

Last year, half of US shoppers indicated they intended to use curbside or contact-less pickup options for their holiday purchases and that percentage is only set to increase this year.

Buy Online, Pickup In-Store (BOPIS), Reserve Online, Pickup In-Store (ROPIS) and Buy Online, Ship To Store (BOSS) were already rapidly growing order fulfilment options pre-pandemic, but COVID-19 strengthened consumers’ preference for increased flexibility and choice in their order delivery alternatives.

In addition to the growth and normalization of BOPIS, ROPIS and BOSS, Buy Now, Pay Later (BNPL) e-Commerce options at checkout, which give shoppers the ability to split their purchases into a series of smaller payments, have also exploded in popularity.

BNPL use has increased almost 50% from 2020 to 2021 and is predicted to continue to grow aggressively through 2025.

The bottom line is that the new payment and fulfilment options your customers embraced during the pandemic aren’t going anywhere and the flexibility they offer shoppers has now become an accepted customer expectation you’ll need to meet this season and beyond.

Customers Want a One-Stop Option (or close to it)

Your customers will be looking for a one-stop shop or as close to it as they can find!

Three-quarters of consumers report that they’ve changed some aspect of their shopping patterns because of the pandemic. For many, that change involved fewer shopping trips (whether in person or virtual) and greater spending per trip, whether due to the impulse to stock up we saw in the early pandemic days or simply as a means of maximizing the efficiency of their  limited excursions for health and safety reasons.

As of July 2021, average spending per shopping occasion across retailers was up 20% over 2019 levels. This desire for efficiency and convenience provides a golden customer support opportunity for retailers this holiday season

Smart brands will invest in making product discovery as easy as possible for customers, leveraging AI to seamlessly surface personalized, contextual product recommendations based on previous purchase history and current intent to help customers check multiple gifts off their list in a single transaction, increasing average order value in the process.

The time for relevant up-selling and cross-selling is now and customers are primed for the automated engagement you need to make it happen.

On-demand support via chatbot /offline agent hand-off, proactive notifications and consultative selling have all grown in popularity during the pandemic. For example, service notification opt-in rates increased in 2020 by nearly 30% compared to the previous year. For omnichannel retailers, the increase is as high as 41%.

Conclusion: ‘Tis the Season That Doesn’t Stop

The 2021 retail holiday shopping season is going to be the season that doesn’t stop.

Black Friday has evolved from a single shopping day, or a weekend, if extended to Cyber Monday, into a season where the deals and discounts start earlier and run until the new year. Black Friday is now, as Gen Z would say, a ‘vibe.’

Holiday deals started rolling out earlier than ever last year and we’re seeing it again in 2021, with Amazon hardly waiting to flip the calendar to October to start their marketing push. Ditto, Target.

This means that retailers have less time to plan and prepare for the holiday season and a much longer span over which they’ll need to consistently meet or exceed evolving customer expectations.

What used to be a sprint is morphing into a marathon (especially with shipping delays) and it’s those retailers that have prioritized flexibility and responsiveness over the last 18 months that will ultimately cross the holiday finish line ahead of their competitors.

Read the article and case studies below of how Linc customers have leveraged our CX Automation solutions to deal with the increasing challenges facing retailers in the 2021 holiday shopping season.

Learn More About CX Automation