Take action for next season before it’s too late
According to the National Retail Foundation, the 2022 holiday season was a slight disappointment by the numbers. After forecasts of a 6% to 8% sales growth over 2021, the reality was 5.3%, or $936.3 billion. Even though this is still respectable growth in light of inflation and interest rates, the question naturally arises: how could things have gone differently? What could retailers have done differently to crack that 6% figure? After all, the number of 5.3% is not adjusted for inflation, which was at 6.5% over the holiday season. Retail can do better.
Opportunities not taken: Forgetting the front line
Looking back, the 2022 holiday season for retailers was the first in several years to be largely unconstrained by COVID-19 requirements and anxiety. There was an opportunity for retailers to capitalize on consumer anticipation around personalized in-store experiences and win back some wallet share. Instead, companies continued to overinvest in e-commerce, rather than leading edge e-learning. North American eCommerce Conversion Rate in Q3 2022 Drops 12% . Meanwhile, Reuters says, holiday season winners included stores that emphasized clearing excess inventory in brick-and-mortar stores .
To the extent that retailers do not implement in-store changes to move inventory and retain customers, they are leaving money on the table. More broadly, the time has come for retailers to realize that a true omnichannel strategy—driving in-store and online purchases—requires the technology of the frontline workforce, not just the digital customer experience. (CX) to invest. It is not too far-fetched to suggest that while enthralled by the “shiny new object” of e-commerce, retailers have forgotten about their most valuable, constant and controllable resource, their front line.
Imagine: you have been hired as a holiday-season employee at a luxury retailer. The year is 2022. At some point, you’re sitting through a few years old onboarding video. You download one app for incentives, one for CRM, and another for the digital library of training. You go into every customer interaction blind and claw your way to a sale as best you can. You feel you can do better, but you don’t know how. At the end of the day, you check your new associate email, only to see that you missed a few messages about a new incentive.
Cumbersome, scattered legacy systems for incentive, e-learning and customer management put retail workers at an extraordinary disadvantage in the battle for consumer attention and spending. Yet consider who (or rather, what) they’re competing with: the endless personalization of algorithmic targeting, which favors purely online brands with no frontline to consider, as long as retailers don’t tech their workforces. With the front line left high and dry, it’s no wonder that 6% of all potential retail sales are lost due to a lack of service .
Cutting Costs While Increasing Revenue: The Frontline Engagement Solution
With cost increases on everything from manufacturing to labor to logistics, it’s the worst time ever for retailers to lose. Now, with the 2022 holiday season in the back of our minds, earnings and stock prices are falling across the sector, with Home Depot  and Walmart  show earnings losses. By the time the next holiday season rolls around for retailers, the market leaders will have seized the opportunity to invest and transform – but everyone else may be in for a not-so-happy holiday.
What will these market leaders have done to increase their vacation revenue compared to last year? They will have embraced frontline enablement technology, which we’ve covered before on these pages, but not from the perspective of how that technology actually cuts costs and drives revenue .
Recently, we published some important research on how frontline empowerment drives concrete, measurable business outcomes. This is not just digitization for digitization’s sake, but rather with the goal of cutting the company’s technical spend while driving revenue at scale through the front line. Modern frontline activation technology brings together multiple tools under the umbrella of a single application, so associates don’t have to bounce around from one experience to another.
Retailers want to reduce the cost of maintaining multiple tools from different vendors—tools that need to talk to each other, for starters, like incentive and training—and now they can. They can even do this without diminishing the front line experience. In fact, the reverse is true.
With this setup, data will ideally flow from tool to tool, making each associated interaction with the platform more personalized to their goals and needs. Rather than a one-size-fits-all, conformist user experience (UX), an associate becomes more like gigs—more engaging and more suited to the individual’s sales goals, preferences, and past performance.
At the same time that retailers cut costs by consolidating tools under a single application, they increase revenue in the way that makes sense for their particular company. Frontline enablement technology integrates with retailers’ external data systems, automatically adjusting the frontline experience to boost corporate KPIs, such as sales performance and brand-retailer collaboration. In essence, retailers see “double personalization”: at the level of the associate’s needs and at the level of the company’s.
Rethink the holiday season for retailers
To boil it down, by “teching” the front line with the right platform retailers do more, and drive revenue at scale according to their most relevant KPIs. They smartly change the frontline’s UX according to real-time metrics, highlighting the right kind of action at the right time (for example, converting overstocked inventory). But they do more with less and cut costs by using technology that brings together multiple tools in one application. This reduces the need to invest in more applications than necessary, to juggle multiple technology vendors, and to train associates in multiple UXs. At a time when retailers are looking to cut costs, this is one way to do it, while also increasing revenue by the same action.
Hopefully, by the time this holiday season rolls around, retailers will have learned their lesson. Ignore the front line at your peril. But to do so, they will need to start adapting to the world of new technologies and customer expectations today, not tomorrow.
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 Frontline Enablement: Retail’s New Technology Paradigm for 2023