As retailers all over the world look to the holiday season for a major spike in sales, Deloitte’s 23rd Annual Holiday Survey of retail spending and trends notes some less than exciting predictions. According to the survey, an overwhelming number of consumers – 59% to be exact - say they expect to reduce their spending this holiday season. As for why, it’s no huge surprise: higher food prices (73%), higher energy prices (69%) and the economy (61%) are cited as the top three reasons.

Categories in which spending is likely to be down the most from last year are:

• Home improvements
• Home/holiday furnishings 
• Non-gift clothing 
• Socializing away from home 
• Charitable donations 
• Entertaining at home

drugstore.com

Value and Prices Will Win the Sale

According to the report, 73% of consumers said the best value for the money will cause them to shop a particular retailer this season, and 72% said low prices. More consumers say they will shop at discount/value department stores, warehouse clubs, dollar stores, outlet stores, and off-prices stores.

Drug stores and supermarkets also showed big increases from last year. Judging by the screenshot I pulled from drugstore.com, they’re ready for the madness!

What About Service?
As value and price takes precedence, where does this leave our deep desire for customer service? Do consumers have to give up service for value and price?

For traditional brick & mortar stores seeking that price-oriented edge, service does kinda have to take a bit of a back seat. Since the rationale for high levels of service is usually very connected to high prices, you have to know the reverse holds true as well. Low prices are typically associated with low levels of service – less staff to help you on the floor. You’re pretty much on your own, so good luck!

But think of online stores where technology and automation make customer service very possible and affordable. Suddenly, the tables turn because value, price and service are all achieveable.  Now of course, online stores can play the same strategy as brick & mortar stores…i.e. that consumers will tolerate average service to the best price and value. But why set your bar so low…especially given your true potential. Consider the online stores that think smarter. Right now I’m thinking of all the online stores that take advantage of great technologies like customer reviews, product recommendations, live chat, and of course web personalization. All these tools help mimic in-store sales assistance and service – with web personalization and its ability to change messaging in real-time, it’s like you’ve got that virtual sales assistant right on your web site. This level of customer service is proven to increase conversion and revenue because it helps ensure that every visitor experience is relevant and meaningful.

Consider Divers Direct – a multichannel retailer that sells scuba gear in six retail stores along the Florida coast, a direct mail catalog and of course…online at www.DiversDirect.com. Robert Darmanin, Online Services Manager at Divers Direct, is using Sitebrand’s web personalization platform, Segment&Serve™, to run several best practice campaigns including first time visitor, return visitor, geo location, depth of page visit, keywords etc. Read the full Divers Direct case study…

For example, if someone enters the site from a keyword search on “wet suit”, they can present that specific visitor with a ‘coincidental’ banner promoting a one-day special on that product. Special price and urgency with the one-day offer element – how brilliant is that! But on top of this classic pricing appeal to win business, Divers Direct also looks to improve the online experience and this is very connected to customer service. Presenting helpful product information and demonstrating overall “expertness” at precisely the right time in the buying process had been very difficult to do online — prior to Sitebrand coming along. And messaging their expertness is all part of their dedication to customer service – i.e. we understand you…we’re divers too…etc. using Sitebrand to demonstrate “expertness” enables Divers Direct to increase revenue lift by almost 70%…and gather invaluable customer intelligence at the same time. This also demonstrates that for certain visitor segments, sometimes discounting isn’t the answer. Referring back to the Deloitte survey, 59% cite price and value as big drivers…which means 41% aren’t as motivated by price and value…i.e. service still matters! And creating a feeling of service to improve the online experience has never been easier.

Recognizing that price and value are huge to the consumer this holiday season is one thing. But differentiating yourself by adding a level of customer service may be just what you need to beat the competition; not to mention what appeals to the 41% who want more than price and vlaue. Believe me when I say there’s still time to improve the online experience this holiday season with web personalization technology like Segment&Serve. Integration is easier than you think so go ahead and request a demo today…or refer to my colleague Kevin’s post and take advantage of our free, no risk, no obligation 60-day Sitebrand trial.