The last quarter of the year is, traditionally, the busiest and most profitable time for ecommerce, however, the sequence of events that continues to unfold in 2020 means that we may be looking at a very different Peak Period this year.
With everyone shopping online more in 2020, all the best deals are going out of stock even quicker than usual and plenty of popular products are simply unavailable.
The Black Friday annual shopping event provides a handy analogy for how marketers and communicators should think about the impending situation: Black Friday presents a huge opportunity for retailers to boost sales and attract new customers. Failure to adequately prepare for this event could be catastrophic, meaning big losses of potential earnings and customer confidence. However, the difference is that we are possibly going to see a sustained period – months even – where every day is like Black Friday, and marketers need to be prepared.
How might the sales events of Black Friday, Cyber Monday, Singles Day, Christmas and the Boxing Day sales change this year? And how can retailers, big and small, begin to prepare?
The retailers that nail Peak season are the ones that start preparing in the summer, or even beforehand, but with the pervading level of uncertainty, you would be forgiven for not quite knowing where to start.
Rapid ecommerce adoption has been a huge stress across the entire network, for fulfillment and shippers as well as carriers and customers. These dynamics will stay for the foreseeable future and eventually become the new normal. The pandemic introduced a- typical market conditions and consumer buying patterns, upping demand in eCommerce and increasing the need for business-to-consumer deliveries.
Shopping habits have changed
Research strongly indicates that the effects of lockdown will permanently change UK consumer behaviour. Scurri has recognized a 74% growth in online shopping since Covid-19 began. Moreover, 45% of UK adults have received more parcel deliveries during coronavirus lockdown than before. Two-thirds of adults say they will continue both current levels of spend (66%) and the frequency (68%) they shop online post-lockdown, while 26% said they will increase their digital spend after restrictions are lifted.
Three quarters of retailers in the UK believe that merging of online shopping and in-store experiences will be key to the sector’s recovery. Additionally, three quarters of high street retailers stated that new safety precautions and social distancing measures will have a severe impact on their ability to trade, with 30% only accepting contactless payment and appointment-style bookings. Other safety measures being brought in include limits of customer capacity (70%), the introduction of protective screens (47%), hand gels being offered for customers (69%), and queue management policies (25%). The pandemic looks set to impose permanent lasting change on retailers. While discounts may provide a short- term boost, the longer-term trend will see fewer stores and more eCommerce as brands make online their primary focus and start introducing new buying options that work for shopper’s post-lockdown. We are definitely entering a new era for retailers.
1. Online retailers should be prepared to scale. While online sales have skyrocketed for many retailers, many of them also weren’t prepared to handle the increase in traffic and sales. The ability to scale is now critical every day, not just on Black Friday or Christmas Eve. To thrive in today’s retail climate, retailers must invest in scalable technologies to help them prepare for unpredictable spikes in online business. This strategy likely includes upgrading to a flexible ecommerce platform that’s ready to scale with fast-changing traffic demands. And retailers new to selling online (or selling at a much higher rate than before) must also consider the security implications of shifting to online sales. Malware blockers, firewalls, and security certificates are critical to protecting customer data.
2. Preparation is everything. Also it is important for retailers to speak to their couriers about collecting on the Saturday and Sunday of the Black Friday weekend. They will do it and it helps them, the retailer and their customers. Retailers should also start creating product bundles now and let them propagate in advance of the big day. Also, retailers are advised to pre-pack as much as they can now so that when it comes to Black Friday, all they need to do is stick the label on.
3. Make your customers feel extra special. Retailers are advised to segment your list in advance and target them based on products their customers have purchased already. A 30% off everything is a little lazy and non-targeted. They will get a better strike rate because they need it. Instead of hitting customers with an offer on the day (like everyone else will), retailers should plant the seed a week before and have a couple of pre-sale emails to whet their appetite. Then use the increased traffic to get people onto your list, even if they don’t buy. Retailers should not be tempted to spam customers with discount offers. Just because it’s cheap, it doesn’t mean to say people will buy it, and you will damage retailers’ brand. Get them to open their emails because it will interest them.
4. Perform a site search. Site search is a good opportunity to drive improvements when going into peak trading periods. Retailers want their site to be performing at its best. Applying boosting rules is a good example, to ensure that the right products are being promoted (which could be at a global or query level), whether this is based on margin, general popularity or a seasonal surge. Spending time looking at search terms that are driving 0-result errors and fixing these using synonyms is another good quick win.
5. Entice with price-driven hooks. Retailers should encourage people to sign up for price alerts. They should do this at different levels, from receiving all price alerts to being able to subscribe to specific categories, brands and products based on customer interest. Building a ‘discount’ landing page that links to all products that will feature in the retailers’ Black Friday promotion, and adding a ‘get a price alert’ CTA (call-to-action) for each product could be key. Depending on the systems they use, they can also do this via SMS and look at push notifications (most effective if they have an app).
6. Targeted campaigns are important as well. For people who have bought more than X times from a specific category or brand in the last 6 months, sending a focused email with matching products is important. Offering tiered incentives to drive basket size e.g. increasing the discount based on spend threshold.
Adapt to consumers’ changing needs. It may be cost-prohibitive for many companies to pivot their offers right now. But others that have already thought ahead and devoted time and budget to developing multi-channel offerings can leverage this shift while creating genuinely helpful experiences for their customers.
How will you thrive today?
No matter what type of items your company sells or at what volume, opportunities for stabilization or growth exist – even during a global pandemic. You just have to look for ways to shift to online sales, implement technology that improves scalability, and keep an ear to the ground, so you’re always offering customers the necessary things.
Above all, look for ways to help. As the country emerges from months of lockdown, customers will remember the brands that helped and sought to create a real connection with their communities.
Discounting needs to be smarter, now more than ever.
Amid COVID-19’s unpredictability, smart brands know that they can’t afford to reset consumer expectations for Black Friday-type discounts year-round.
With consumers being unable to physically go into a retail store as they were able to prior to the pandemic, it seems as though brand marketers are making what are almost desperate discounting decisions because they lack a better solution. In most cases, no amount of discounting will convince in-store shoppers to buy online within certain categories of merchandise.
When there’s a frantic economic environment such as the one we have now, brands need planning and strategy via intelligent discounting and optimization. Brands already have loyal customers, and what should be communicated with those customers doesn’t need to be all deal-related. Regardless of the economic environment, good times or bad, some customers simply need less of a discount to purchase than others. Adapting strategies and offering customers much more targeted discounts based on their price-sensitivity is a smarter strategy that will preserve sales and gross-margin at the same time.
Slashing prices may convince shoppers to spend fast, but it hurts profitability in the long run. At some point early on for retailers, discounting became the strategy. But it’s going to be very difficult for these same brands to sell at full price once this economic uncertainty fades away. By shifting to smarter discounting, retailers can personalize, revise, and implement more precise offers in real-time, and save more money so that businesses can survive this turbulence and emerge stronger on the other side.
To summarize, given the continued high demands and online orders retailers will experience, scaling up for peak season will be more difficult than in years past. Many shoppers are much more likely to purchase from a retailer they knew was following COVID-19 safety precautions in-store. Therefore the 2020 holiday season will reward omnichannel retailers. Instead of the recurring and seasonal demand cycles retailers are used to, in the wake of COVID-19, brands must contend with consistent high demand for e-commerce year-round. Retailers must leverage unique strategies like using stores as fulfillment centers and creative order management techniques paired with advanced technology in order to keep deliveries flowing by embracing curbside pickup and other emerging consumer expectations.