Moderated by Kevin Ptak (Brand & CX Special Interest Group member)the panel spent an hour discussing how businesses can deliver on their brand promise while meeting important sales targets at Christmas. This article includes the key takeaways from the event.
How busy does Christmas get for retail businesses?
For many businesses, especially in the hospitality and retail sectors, Christmas represents their busiest time of the year. The peak shopping minute in New Zealand in December 2023 saw 186 transactions per second at 12:28 pm on the Friday before Christmas. It’s also an opportunity to generate the most revenue. For example, Farro sells twice as much in December as in their next biggest month of the year, with a significant portion of those sales in the final week before Christmas. For a brand that’s known for Christmas, it’s crucial to get everything right.
Farro treats the Christmas period as an extra sales week in the annual calendar. Starting in early November, Farro approaches it as a week-by-week event rather than a whole trading period. Customers want different things at different times, and extensive research is conducted to understand their needs.
How do customers feel during the lead-up to Christmas, and how can businesses leverage that?
Cole described the consumer mindset as a mix of abundance and overload. On one hand, there's an abundance of positive emotions and experiences: nostalgia, connection, and joy related to Christmas. On the other hand, there's an overload of messages to absorb: summer is coming, kids are going on holidays, upcoming holidays to plan, and a year-end rush to finish work. All these factors contribute to decision paralysis, making it harder to finalise purchases. Cole advises focusing on simplicity, making it easy for customers to make decisions. For example, a store displaying a range of hampers with clear labels at the entrance simplifies decision-making for customers.
How much are companies thinking about the brand experience at this time of the year?
According to our panelists, a lot! Amber emphasised the importance of keeping the brand promise at the forefront and structuring events around that to meet customer needs and expectations. For example, Pak’n’Save focuses on saving customers money, even during Christmas, by avoiding showy decorations and continuing to offer lower prices. New World, being a more experiential brand, focuses on lightening the load for customers with in-store tastings, Christmas recipes, and online order surprises.
Rachael reiterated the importance of remembering the customer mission during the festive season. Farro's customers, who are mega foodies, flock to the store during Christmas for food discovery. Events like tasting Christmas food kits, showcasing artisan suppliers, and in-store competitions create buzz and enhance the customer experience, potentially converting seasonal shoppers into regular customers.
How are retailers creating peak experiences for customers?
Amber explained that the 'peak-end rule' is similar to the 'zone of tolerance,' where not every moment in the customer's journey needs to be amazing. The focus should be on creating memorable moments and ending on a high note, as these are what customers remember. For Farro, thorough training and preparation of seasonal staff are key. From product knowledge to on-site support, the entire operations team helps create a smooth shopping experience. Examples include staff assisting with traffic flow in car parks and helping customers find what they need, as well as offering mince pies and chocolates to people waiting in long queues.
How has the cost of living crisis impacted retail businesses this year compared to previous years, and how can businesses adapt to changing conditions?
The panelists noted significant impacts from the cost of living crisis. Amber mentioned an increased focus on value for customers. Research is conducted to understand how customers plan to spend their time and who they will be with during Christmas. Farro has become more analytical with its data, understanding trading dynamics and adjusting product ranges to include more affordable options. This approach ensures that customers can still enjoy a festive meal without overspending.
How do you balance the pressures of meeting your targets at this time of year with brand integrity? How does that balance work for you and how do you know that you’ve got it right?
Rachael said, “At Farro, we’re clear about our Unique Selling Proposition (USP), which is creating an authentic food market experience where every mouthful matters. We double down on this by ensuring that everything we buy and every experience we offer in-store delivers on that promise. We range around a hundred seasonal products unique to Farro, adding complexity to the business because these items must be sold by Christmas Eve. Therefore, we host numerous product tasting events, creating magic and focusing on the customer experience.”
Amber said that "For New World and Pak’n’Save, we curate and stock our shelves with what customers want to buy. We know what products customers are buying at different points leading up to Christmas and ensure these products are available at competitive prices. We focus on our brand promise and deeply understand our customers’ mindsets and needs, meeting them as best as we can."
What’s the psychology of queue management?
Cole drew from his Behavioural Strategist expertise to explain two important points about queue management: “First, when customers enter a queue, they give up control, which changes their mindset. Setting them up for a good experience as they enter the queue is crucial. Second, how people perceive the queue experience varies. Rachael mentioned how Farro enhances the queue experience by offering mince pies and chocolates, a subtle way to improve the experience."
How do you measure and evaluate the Christmas season from a customer experience standpoint?
There are two key aspects: meeting financial targets and understanding customers' perceptions. Rachael mentioned they conduct NPS (Net Promoter Score) surveys during Christmas and compare the results with the rest of the year. They also survey the customer database on product range and experience. The team then conducts a post-Christmas review to analyse customer feedback.
Rachael added, "We also seek feedback from in-store teams and conduct start-stop-continue analysis. Analysis is crucial for improvement. In retail, doing the same thing year after year doesn’t lead to growth."
If you were to use AI in your brand’s marketing, what would you do?
Rachael emphasised the importance of a well-crafted creative brief. "Regardless of how modern your technology or new media channels are, you must always take it back to who you are as a brand. Focus on the unique value proposition, target market, and core messages. If you ask the right questions and keep refining the brief, the AI engine should produce something decent. Always have a human review it to ensure nothing strange appears."
How do you continue the sales momentum after Christmas?
Amber mentioned that at Foodstuffs, it’s about understanding shifts in customer needs and mindsets during this period. The buildup to Christmas is massive, followed by a drop in Pak’n’Save shopping as people go on holidays and shop more at smaller local Four Square stores. They take a portfolio approach to capture various customer needs and understand important products. For example, entering the barbecue season means cross-merchandising barbecue sauces and spice rubs with barbecue meals. With fewer customers, the goal is to find more opportunities to increase sales and add extra items to the basket.
As a wrap-up, Cole highlighted three key elements that are essential for creating a great customer experience and driving business growth: