The holiday decorations started going up early this year at some retail outlets. Christmas trees lining the aisles in August? Your eyes weren’t playing tricks on you. Savvy merchants were hoping to get an early start on the season.

Can you blame them? During the height of COVID, consumer demand surged and inventory lagged, as companies struggled with supply chain glitches. This year, people aren’t waiting to begin their holiday shopping. In fact, I expect that half will start before November.

That means retailers who are prepared stand to make outsized gains. We see them capitalizing on three hot trends:

"Personalization, gamification, and supply chain optimization may not be new, but they're the secret sauce for a season worth celebrating. Every retailer should evaluate these three trends carefully because you can bet your competitors already are."

This year, people have more money to spend, but they’re going to be careful about how they spend it. Here’s where personalization can make the difference between a sale and a customer who goes elsewhere. Shoppers want to be treated like individuals. They want retailers to know their likes and dislikes as well as their purchase histories. Data and AI technology can help personalize interactions with these customers by offering real-time product recommendations, discounts or other offers that make the customer feel like they are receiving bespoke service.

A word of caution. The last thing a merchant wants to do is roll out a new piece of technology amid the onslaught of Black Friday — especially one that’s not thoroughly tested. Remember, on peak holiday shopping days, you've got ten times more people than normal trying to run your app to get redeemer discount codes, and in that kind of an environment failure is not an option. Prudently plan and battle test your technology before the rush begins.

Offering customers the opportunity to win products and discounts by playing an online game, such as trivia, puzzles or quizzes, is an excellent technique for increasing sales while building loyalty and engagement. According to one recent report, revenues derived from gamification grew from $14.87 billion in 2022 to $18.63 billion in 2023 at a compound annual growth rate (CAGR) of 25.3%.

Gamification also helps drive online customers into brick-and-mortar stores, where shoppers tend to spend more and — because sales associates are there to provide guidance — returns tend to be fewer.

In another twist to this compelling trend, retailers are staking out territory in online game platforms like Roblox, where they can sell digital (or real-world) products — clothing, for example. It’s not a huge market — yet. But given the continued popularity of these platforms, it’s likely that retailers will devote greater attention to them this year.

Merchants are making their supply chains more productive. In doing so, they are looking to optimize the technology they already have in place. For example, apparel and fashion companies are tagging clothing items with RFID sensors, so they can be tracked down to individual items in an individual store. Combined with reliable connectivity solutions and AI, this technology can provide a more accurate real-time view of inventory and anticipate backlogs and gaps.

One big advantage of an optimized supply chain is that it helps the retailer decide the appropriate amount of stock to keep on hand. In the past, overstocking was a chronic problem, often followed by painful 80 percent-off sales. Not only is this terrible for a company’s carbon footprint, but it also exposes the merchant to significant losses, as suppliers must be paid in advance. Being able to match inventory levels to a retailer’s appetite for risk is a significant advantage.

These three trends — personalization, gamification and supply chain optimization — aren’t new, but they are poised to make a splash this holiday season. With retailing constantly evolving and becoming more competitive, every retailer should evaluate the trends carefully. Your competitors will be.