The saying all publicity is good publicity certainly has its limitations. Just ask the execs at Kohl’s: The company is now dealing with significant social media backlash due to reports its holiday service left much to be desired this holiday season.
Of course, for every retailer that missed the mark with its holiday strategy execution, another excelled at retaining its customer base and encouraging them to spend. A newly released December 23 report from America’s Research Group (ARG) aimed to name and rank the top retail playmakers, labeling the “winners and losers” of the 2013 holiday season.
ARG named Walmart as its top winner, as the company retained 88.1 percent of its customer base this holiday season. Barnes & Noble, by comparison, finished last among the studied retailers, keeping just 43.9 percent of its base. Perhaps more surprisingly, just two retailers crossed the 70 percent customer retention mark, a figure that was down substantially from years past.
“In previous years, we’ve seen seven or more retailers do well,” Britt Beemer, chairman and CEO of ARG, said in a December 23 statement. “If you’re losing 50 percent of your customers, you’re in grave trouble and your long-term future is doubtful.”
Beemer indicated that as many as two-thirds of the retailers ARG analyzed received failing grades in the report. These retailers, Beemer suggests, should “seriously review their merchandising and advertising strategies if they want to stay in the game.”
Of course, it helps to begin by analyzing the retailers that are finding what it takes to succeed amid the demands of an increasingly omnichannel ecosystem. With this in mind, we break down the tactics of the top five retailers as named in the report to reveal what seperated them from the pack.
1. Walmart – Walmart’s success this year may be due to its head start on the competition. The Arkansas-based retail giant launched its holiday promotions on November 1, giving customers early access to reduced prices that typically wouldn’t have been available.
Further, Walmart showed a willingness all year long to invest in eCommerce, announcing improvements to its logistics system this June. As a result, consumer confidence in Walmart is encouraging shoppers to engage on other platforms, such as mobile, which reports found drove more than 50 percent of its Thanksgiving traffic.
2. Dollar Tree – Known for its ultra-low prices, Dollar Tree placed second with an 80.4 percent customer retention rate. The result was good news for Dollar Tree, which saw its stock drop earlier this month on weak consumer spending projections.
However, Dollar Tree may have benefited the most from the pinch in consumer budgets, observed in early reports. Average consumer spending declined by $15 dollars this year, and its ranking on this report suggests shoppers may have tried making up the difference with its extra low-cost items.
3. Target – With the news related to Target’s massive data breach seemingly worsening by the day, the retailer’s inclusion on this list should come as welcome news. Target retained 72.1 percent of its customers this holiday season, though as the survey was taken the weekend of December 21, there’s no telling what the full impact of the breach has been.
Target has offered steep discounts in the wake of the breach, a development that may have also helped influence its retention total. Target executives are maintaining that sales have been strong, even in the wake of the incident.
4. Walgreens – Placing fourth in the study, Walgreens retained 69.3 percent of its customer base this holiday season according to ARG. The strong showing may have been due to the retailer’s willingness this year to invest heavily in omnichannel commerce early, and to put eCommerce front-and-center this winter through new executive appointments and loyalty pushes.
5. Macy’s – Retaining 68.2 percent of its customers this holiday season, Macy’s finished just outside of fourth place. Some of the keys to its success may have been its large social media audience and strong engagement on these platforms.
Elsewhere, like other retailers on this list, Macy’s attempted to cater to customer needs, announcing store pickup for online orders and new programs to better deliver its loyalty services this November.
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