This year has presented many economic, social and emotionally challenging events – from the bushfires and floods to the shock of COVID-19 and the tragic events that led to the global Black Lives Matter marches. There is no doubt that this will impact the sentiment around Christmas and how people feel about spending.
From a global perspective, it could be said that Australia and New Zealand are far better positioned for a successful and somewhat normal Christmas period, with cases of coronavirus significantly decreased. In response to this, we are seeing a strong motivation from retail brands to use Christmas as a moment of revival and an opportunity to reconnect with their customers.
The more I consider this idea of reconnection, the more I realise the depth of its importance. In the last few months, consumers have been in a bubble, interacting with your brand through their mobile devices, taking in content through Instagram, but most likely overconsuming digital content as human interaction was restricted. Now they are returning to your stores – not to the same experience, but to one that signifies change has and will continue to happen.
Fast forward four months, as we enter the Christmas hype period: the air of uncertainty around COVID-19 may have dissipated, but we will be left in the aftermath of economic turbulence, with the end of government support schemes and yet another reset on essential versus non-essential spend.
Setting a new tone
The Christmas experience needs to strike an emotional chord with your customer this year, more so than ever before. You will need to create a meaningful connection, one that generates a feeling of nostalgia, hope and grounding. Buying this year will be more about bringing people together, gifting to unite and comfort, a combination of presents and presence, with the latter being of more significance.
Spending – and spending time together – often come hand in hand at Christmas, with gifting as a central theme to our time with family and friends. Retailers will need to consider what they can do beyond selling a product and reach their customer on a deeper level. This deeper connection could surface in the store experience when purchasing (cue personalisation, activation, Instagram moments). Or for our now-savvier online shopper, it might be generating a digital experience that can connect your product to a broader purpose or encourage a moment to share with loved ones virtually. The brands that will see the most success will be those bringing human connection to the fore in their purchasing experience.
In Deloitte’s Annual Christmas Survey last year, over a quarter of respondents highlighted customer service as the most important driver of sales during the festive season, just behind digital and omnichannel offerings. For businesses, the pandemic encouraged an increased focus on e-commerce and for many retailers, their online presence has been their saviour this year. Perhaps digital and omnichannel will supersede the importance of customer service as a sales driver. However, what I think will be necessary is an amplification of creativity within that service to truly connect to your customer.
After a long absence from social engagements, Christmas as a time for conscious togetherness will be of high value. Trends that have emerged and stuck in this period of isolation are those centred around craft and returning to basic pleasures – cooking, home improvement, gardening, reading. That doesn’t mean we’ve all turned into domestic kings and queens, but the result of this back-to-basics trend is a significant uplift in craft, and as such, we may witness more homemade and customised gifting this year. We saw a lot of brands dip a toe into the water of customisation last year with monogramming, but how can we offer our customers more here? Perhaps it will be in the form of take-home craft kits to personalise a product in their own time.
The rise of the independents
Shopping local and supporting independents has taken on a whole new meaning in the last couple of months. I don’t know about you, but I was suddenly a lot more conscious of my local bakery, and seeing them survive the pandemic gave me a newfound appreciation of their service to our area and how much my custom (and that of others) genuinely helped them to survive. The local businesses that made fast efforts to shift during lockdown to be available to their communities are now reaping the rewards of
The adaptable independent retailers are also thriving for other reasons, one being our resistance to travel and, of course, the fact that many of us are not commuting to the office or interstate at present. Tourism continues to be a driver of growth for the Australian economy, with domestic and international tourism spend totalling $122 billion in 2018-19. With the absence of tourism, we are likely to see a hard hit to our retail brands this year, and our luxury brands will need to work a lot harder to connect to a customer base outside of their typical international traveller.
Ultimately, uncertainty damages consumer confidence, and economic instability – along with government support schemes withdrawing imminently – will not help matters. Driving unique and exclusive experiences will become even more pivotal than it has been to motivate customers into stores. In essential categories such as grocery and healthcare, a post-crisis downturn will inevitably lead to a shift to value for money.
But it is important to acknowledge that price isn’t the only motivator of purchase or necessarily the strongest. We are now beginning to witness an upswing in Australian-made items, and a consumer that is more conscious and excited by locally made products. All of these trends have existed for many years, but they have been stimulated by a crisis to the point at which they cannot be ignored.
Jemma Caprioli is the chief customer officer at Dashing.