Big name retailers had a very jolly holiday shopping season.
Holiday retail sales increased 3.4% with online shopping growing 19% more than last year, according to data from Mastercard. This helped Amazon (AMZN) have a “record breaking” 2019 shopping season, and helped sell tens of millions of their own products.
“You're seeing leaders like Walmart (WMT) and Target (TGT) and others really monetize the data that they have, use it to drive higher loyalty, higher customer value from a customer lifetime perspective, and even more importantly, drive more profitability efficiencies in their supply chain,” says Hilding Anderson, Head of Retail Strategy at Publicis Sapient. “That's going to be a key thing to watch as these retailers, many of which are going to continue to thrive and survive, and in the era of a strong Amazon, as the time goes on.”
Companies are setting themselves up for years of loyalty and possible sales, by being able to collect customers’ data in one way or another. Optimism down the road isn’t spelling out profits at the moment. Retailers are spending an exorbitant amount to expand their online presence but change is necessary.
Anderson says, “I think it's about using some of these new technologies like machine learning and AI to really change how you operate. Many retailers today still use spreadsheets and, and gut feel about trying to do demand planning, or fulfillment optimization. There are way better ways of driving efficiencies, that will ultimately have a huge impact on that long-term profitability picture for the digital channel.”