It’s the time of the year when retailers – and probably some shoppers – hate the holiday hangover. Retailers must return to “business as usual” in the new year and things slow down dramatically – or is this so clear cut?
On the plus side, the 2024 holiday shopping season threw up some great numbers, such as:
- Online shopping sales touched a record of $241.4 billion this holiday season – up by 8.7% from the previous season.
- Mobile shopping revenue reached a record of 54.5% of all online shopping.
- Curbside product pickups accounted for 37.8% of all orders placed on December 23rd.
On the flip side, research suggest that 70% of retailers struggle to retain their customers after the holiday season. According to Statista, growing inflation and costs were among the prominent holiday shopping challenges in 2024.
These are not all. Here are 5 post-holiday season challenges for retailers – and what they can do to address – and learn – from them:
- Product returns
The post-holiday shopping season is also the time when retailers have to deal with the challenge of product returns. This year, product returns are expected to account for 17% of all retail sales in the U.S. While product returns are inevitable after any holiday season, retailers must be prepared for a boom in returns every January.
Retailers must also account for the costs of returned merchandise, including the shipping costs. In some cases, retailers can explore if order refunds are a more sustainable approach than enabling product returns. Business practices like charging for return shipping can damage the customer’s brand perception – and push them toward competitors.
- Customer retention
Customer retention in the post-holiday shopping season is another major challenge in the retail space. It’s common for retailers to experience a sharp decline in online customer engagement and footfalls in January every year. 64% of brands have observed that new customers (acquired during the holiday season) don’t engage (or spend) with brands later – as compared to customers acquired during the rest of the year.
In the post-shopping season, customer retention is the continued practice of encouraging shoppers to engage with the brand. Despite the challenge, customer retention in the following months presents an opportunity for retailers to:
- Stabilize their revenue streams and maintain a cash flow.
- Convert single-purchase (or seasonal) shoppers into long-term loyal customers.
- Streamline and focus their marketing budget towards retaining seasonal shoppers for improved returns.
- Slower growth
Following the shopping season, it’s common for retailers to see a sharp decline in sales and customer engagement. Consumers are typically less interested in shopping in the post-holiday period – rather preferring to spend quality time with family or friends.
Brand engagement is also much lower in the new year. A Trustpilot study found 500,000 fewer customer reviews in January than in the previous month.
Retailers can leverage this period to focus on engaging other customers – or building a stronger relationship with existing consumers. They can also tap into selected consumers looking to increase their purchases in January. For instance, fitness-centric retailers can tap into customers looking to fulfill their New Year resolutions – such as weight reduction or healthy diets.
- Workforce stress management
According to this Forbes article, 73% of retail workers report increased work-related stress during every holiday season.
Every shopping season has a stressful impact on retail workers. They have to deal with longer working hours – and meet the growing expectations of their customers. With stress factors like longer check-out lines and delayed deliveries, customers often take out the brunt of their frustration on frontline workers.
This can lead to a shortage of available workers in the post-holiday season, which can severely impact the retailer’s business operations. To address labor-related challenges, retailers can focus on employee well-being – and create a safe and productive work environment after the holiday season.
- Lower customer acquisition
The post-holiday season is also a challenge for retailers looking to expand their customer base by acquiring new customers. Holiday shoppers are driven by discounted sales or promotions, but do not want long-term brand engagement.
Additionally, inflationary pressures often cause potential shoppers to save more money – instead of spending on retail shopping. The post-holiday season is the right time for retail brands to recognize this slowdown and focus on improving their warehouse operations. This can help them improve their sales margins even in the face of lower sales.
Retailers can also look to improve their omnichannel strategy which can diversify their sales channels for the rest of the year. This form of preparation can help brands adapt to new market opportunities in the coming months.
How Carte+ can address these challenges
Despite all the challenges, the holiday shopping season also enables retailers to learn from their mistakes and prepare their operations for the next season.
At Cartesian Kinetics, we recognize that the post-holiday season can be tough on most retail brands. This is why our flagship automation tool, Carte+ offers retailers the flexibility to adapt to changing market demands.
Here are additional ways in which Carte+ can address some of these challenges:
- Optimize product returns management with cost efficiency and customer satisfaction.
- Automate the manual warehouse tasks performed by human operators, thus reducing their stress levels.
- Retrofit their existing facilities in anticipation of reduced sales and revenues.
Carte+ offers an innovative and unique warehouse solution for the benefit of modern retailers. If you want to know more about this tool, reach out to us today!
