CX Lessons from the 2021 Holiday Shopping Season

The 2021 holiday shopping season was predicted to be a bumper year and it didn’t disappoint. Despite supply chain challenges and ongoing concerns about COVID variants, retailers benefited from a 14.1% increase in spend compared to 2020. This growth exceeded forecasts and set a new record of $886.7 billion spent. 

In 2020 e-commerce experienced an exponential growth of 207%. With many brick and mortar stores welcoming shoppers back, there was much debate as to whether this would make a dent in online growth for the 2021 holiday season. 

• E-commerce achieved an impressive 57% year on year growth, indicating that many of the trends ushered in by the pandemic are here to stay.  
• More significant was that the percentage of online sales continued to grow at 19.6%. This was up from 17.8% in 2020 and 13.8% in 2019.

There were some differences in the way consumers shopped this past holiday season. Rather than the usual last minute rush, the highest retail figures were recorded much earlier with many shoppers completing purchases in October and November. This meant that December sales were marginally lower, but didn’t dampen the overall gains for the holiday shopping season.

What impact does the 2021 holiday season trends have on CX for 2022?

It’s fairly clear that digital shopping habits are well entrenched and consumers are accustomed to finding what they want online, whether it’s weekly groceries or a gift for a special occasion. Their understanding of the mechanisms of e-commerce were evident in that they were willing to shop earlier to avoid possible supply chain challenges. Additionally many customers are still making use of curbside pickup and BOPIS (buy online pickup in store) indicating that they’ll happily shift between shopping channels as it suits them. But the journey is starting online and has key ramifications on the customer experience (CX).

This means that if brands want to gain a competitive advantage, they need to focus on improving digital experiences for customers and maturing CX efforts. What does that look like in 2022?

Create more engaging CX

Some major retailers approached the holiday season by going all out and creating augmented reality (AR) shopping experiences. There’s no doubt it wowed consumers, especially as virtual reality (VR) concepts are still very much a novelty which many customers are experiencing for the first time. AR and VR technologies do a fantastic job of attracting and engaging customers, but they are pricey to develop.

Brands considering them should ask whether AR and VR experiences actually lead visitors further along the customer journey and get them to buy? Impressing customers with new technologies is only the start. Optimizing the whole customer journey across all channels is more complex and requires a strategy that understands what customers are responding to.

The Voice of the Customer (VoC) remains King

Consumers continue to be loud and clear on their demands for greater levels of personalization. They expect brands to learn from the way they navigate a website and search online. This is no easy task when visitors toggle between channels and competitor websites to compare offerings and prices. Increasingly, brands are realizing the value of artificial intelligence (AI) and its ability to tap into the voice of the customer to understand shopping intent and help serve up relevant experiences that progress visitors further along the customer journey. The reason AI is effective is that it manages complexity with ease. With minimal inputs, AI can track how visitors are responding to different experiences and combinations of ideas. It uses this feedback to identify the top performing experiences that lead customers to buy.

Nothing is forever

Customer loyalty is at an all time low, compounded by the fact that while sales are up, so are returns—which eat into profits. Consumers don’t mind buying when there’s a no risk return policy and this is a very effective CX strategy to increase sales. But it has a downside, if the product doesn’t meet expectations, it’ll probably be returned. This reinforces the importance of creating authentic digital experiences where there’s little ambiguity as to what customers are getting. It also highlights once again the importance of listening to the VoC and using that information to serve relevant offers that help effectively align expectations.

Speed up responses to changing customer preferences

A major frustration for brands is the speed at which trends and customer preferences change. Marketing departments no longer have months to understand pivots in buying behavior and create a strategy to meet those expectations. Visitors expect relevant offers while they’re browsing. While traditional A/B testing tools may not be able to deliver answers quickly, an AI-driven experience optimization platform can and this is one of the reasons it is being applied to understanding changing customer behavior and improving CX.

Leveraging the season for even greater growth

It’s a well known fact that most retailers rely on peak shopping seasons to get them through the rest of the year. Because the stakes are so high, many are cautious when it comes to adopting new strategies or technologies. There’s the fear that adopting something new carries with it the risk that something will go wrong and result in lost  revenue. But there’s another consideration.

What’s the value of a 5% or 10% increase in sales during peak holiday shopping season? How much greater will the return on investment (ROI) be if new technologies and strategies can drive that type of growth? Like the retailers willing to invest in AR to create more immersive experiences for customers, other brands recognized the value in implementing website experience optimization projects to improve CX and increase their competitive advantage.

While the growth percentages may have slowed moderately since exploding in 2020, brands are still under pressure to keep growing sales in an increasingly competitive e-commerce space. There is the realization that this is only possible with the help of technologies such as AI that can keep pace with change and handle the infinite number of complexities involved with improving CX to achieve business objectives and metrics. Staying ahead of the competition in 2022 requires a proactive approach and customer-centric vision that is evident throughout the digital customer experience.