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Target Leans on Omnichannel to Drive Holiday Sales

The Covid crisis still looms large in the minds of many Americans, with Thursday night’s presidential debate underscoring the risks of widespread infection that could accelerate over the course of the coming months. And as shoppers gear up for a totally unconventional holiday season, retailers are rolling out features and services to put them at ease.

Consumers are undoubtedly hesitant to return to stores in full force, and the retail sector stands to see a marked shift toward e-commerce and omnichannel solutions as they turn to tablets and mobile devices as preferred points of purchase. Mobile shopping apps, curbside pickup and BOPIS options will be critical tools for retailers fighting for market share this holiday season.

The vast majority (80 percent) of shoppers plan to up their usage of curbside pickup options for gifts this fall, and their expectations for the experience are high, according to location technology platform Bluedot’s survey published on Thursday. Three-fifths of shoppers said they wanted automated check-in upon arrival at a store’s parking lot, and would prefer that an associate bring their order directly to their car. However, only about one-third of curbside pickup users have seen this kind of efficiency in the past.

While anxieties about the spread of the coronavirus have precipitated the augmented appetite for omnichannel options, 92 percent of consumers expressed concern that stores were not taking the health and safety precautions that would allow them to feel comfortable shopping brick-and-mortar. They also cited long lines and wait times as reasons to stay away from the stores.

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As many opt to stay home altogether this season, the shift toward mobile shopping stands to be significant. Bluedot’s research indicated that three-quarters of shoppers plan to use smartphone apps for at least half of their holiday purchases this year. In fact, app downloads are already on the rise, and half of all shoppers surveyed said they planned to download two or more new shopping apps over the coming months.

The pandemic has forced brands to completely rethink the customer experience and adapt quickly to new demands, according to Bluedot co-founding CEO Emil Davityan. But if they’re going to adopt measures like curbside pickup, they need to do them right. “There’s a major disconnect between what consumers want and what brands are currently offering,” he said. “Consumers want an effortless, fast, and automated carside experience with limited wait times.”

It’s also becoming clear that mobile apps are the channel of the future for brands and retailers, and consumers need to see advancement on that front right away. “Due to the pandemic, consumers are more receptive to apps than ever before,” Davityan added. “There’s a technology differential for companies who embrace this approach and a chance to get ahead of competitors while meeting consumer demand head-on.”

Target has wasted no time in going all in on the omnichannel train, which is quickly pulling away from the station. On Thursday, the big-box retailer announced plans to augment its in-store shopping experiences with tech-enabled features that allow for safety and social distancing, as well as convenience.

Shoppers can now use the wallet feature on their Target app to tap into a contactless checkout experience, eliminating the need to have their items scanned by a cashier or even scan them themselves at a self-checkout kiosk. Coupons, Target Circle offers and gift cards are all stored in the app, making it simple to leverage savings. The retailer also announced plans to install 1,000 more MyCheckout devices in stores across the country, allowing shoppers to check out anywhere on the store floor and avoid crowds and lines at traditional cash wrap stations.

The retailer will continue to limit the number of shoppers in store at one time to ensure proper social distancing, so consumers can reserve a spot in line through even before they arrive at the store.

For those who prefer to avoid the physical experience altogether, Target has added to its same-day delivery services this holiday season, allowing online shoppers to receive an expanded range of food, home goods and apparel in as little as one hour through its logistics arm, Shipt. It will also double the number of drive-up spots to 16,000, with purchases placed directly in cars by store staff. Augmented app features allow consumers to adjust their preferences for pick-up in real time, even after they’ve arrived at the store.

In a statement, CEO Brian Cornell said that the retailer has invested in convenience-enhancing features and services in recent years. “As we’ve navigated the pandemic, that focus has evolved to ensure we’re also creating the safest place for our guests to shop,” he added.

As Target aims to become the optimal shopping destination for consumers with varying degrees of concern about Covid’s impact, tech partners are stepping up to help brands and retailers without the same massive physical footprint and sophisticated logistics infrastructure.

Pickup, a last mile delivery service platform, announced a partnership with delivery provider Postmates to help businesses of all sizes scale their delivery capabilities to meet the surge in demand for contactless shopping.

The partnership aims to expand retailers’ fulfillment capabilities, the company said in a statement, for items including holiday gifts, décor, and even furniture. Pickup’s Good Guy network specializes in the delivery and assembly of heavy goods.

“Pickup Enterprise makes delivery fast and convenient, whether it’s big or small items, and without the added cost and complexity of a standalone transportation management system,” said Darren Waxman, chief revenue officer at Pickup. The partnership with Postmates empowers consumers to shop across channels while reducing the logistics cost—a boon to both retailers and shoppers. Postmates, known chiefly for its restaurant delivery services, also provides consumers with localized access to goods from convenience stores and big-box retailers.

Despite working tirelessly to implement these advancements in shopping options, many consumers are feeling the weight of the pandemic on their wallets. Across the board, shoppers are planning to spend 18 percent less this holiday season than they did in 2019.

Faced with “considerable uncertainty and reduced household income,” consumers are focusing on essential purchases for their homes along with gifts for close family members, according to Scott Rankin, KPMG’s national advisory leader for consumer and retail. “Retail customers are forming new shopping habits, which are expected to continue into 2021 and beyond,” Rankin said.

Average per person spending this holiday season is expected to contract by more than $100, from $627 in 2019 to $515. The majority of shoppers (60 percent) plan to give gifts to the same number of people this year, but more than one-third (36 percent) are crossing recipients off their lists.

The migration away from physical retail also comes with a concurrent revelation: Black Friday is no longer the shopping event of the year. Only two-fifths of shoppers said that the day after Thanksgiving is the most significant retail holiday, with Cyber Monday and Prime Day pulling market share and consumer interest.

“In-store retailers hoping for a holiday reprieve may be disappointed,” Rankin added. “The migration to online continues across nearly all retail segments.”

E-commerce’s gains will likely be permanent, according to data from payment solution provider PCI Pal. The vast majority (70 percent) of consumers plan to continue to shop online even after the Covid crisis abates.

But while shopping from the safety of one’s own couch mitigates the risk of contracting the virus, shoppers are becoming increasingly concerned about threats to their data security. About one-fifth of respondents to PCI’s survey said they perceived online commerce to be the least secure way to make transactions, while in-store purchasing is still considered most secure by more than half (57 percent) of shoppers.

Three-fifths of shoppers said they felt more concerned about their privacy in a Covid world, and one slip-up by a retailer could have them running for the hills. A solid 70 percent of respondents said they would cease shopping with a brand for a few months or even permanently should they experience a data breach this holiday season.

Despite a long list of anxieties about making purchases this fall, consumers aren’t likely to deviate from their past behavior when it comes to the retailers they frequent. A whopping 86 percent of respondents said they were still planning to shop with their favorite stores, with more than half planning to do so online.

Social shopping may prove too enticing a tool to turn away from, in many cases. New features on Facebook and Instagram that allow shopping directly through the platforms saw a 104 percent increase in referral traffic during Q2, according to Salesforce data. Still, nearly half (46 percent) of respondents also feel that social channels represent the most insecure way to shop.

Shopper behavior may ultimately be dictated by the cost of goods, though. According to a survey from Aptos-owned Revionics, LLC, a provider of advanced analytics solutions for retailers, 77 percent of respondents named pricing as a top consideration in their decision making this year.

The majority (70 percent) of consumers will actively seek out promotions and coupons while holiday shopping, and 45 percent said those discounts will be a driving factor in deciding where to shop.

Most shoppers said they plan to compare prices, whether they shop on the web or in stores. Nearly three-quarters (74 percent) said they would price shop while scouring the web, while 69 percent said they would do so in person.

And despite feeling a bit strapped for cash this year, 35 percent of shoppers said they would use the extra time they have on their hands to look for holiday deals and discounts. Almost half (46 percent) will start their holiday shopping earlier than the weekend of Black Friday and Cyber Monday—and some likely began on Amazon’s Prime Day earlier this month.

“To stay ahead of competitors and drive sales, retailers will need to determine the most effective promotional strategy across every channel, both online and in store,” said Steve Leven, chief operating officer of Revionics. “They must also start promotions and markdowns now while demand is up, keeping up with competitor price changes and evolving market trends to win over consumers.”