The holiday season is five months away, but for ecommerce brands, it’s right around the corner. Savvy ecommerce brands are already planning for a busy and somewhat unpredictable Q4. With only four weeks in the holiday season, consumers want what they want, when, and how they choose. And, they’ll buy elsewhere if brands can’t deliver.
There are many lessons to learn from the chaotic 2020 holiday season. Demand for ecommerce soared, up 23.9% for online and non-store sales during the November–December holiday period. That unprecedented demand, however, tested the limits of supply chains, logistics, and delivery. Products sold out with no stock to refill and overwhelmed carriers struggled to keep up with delivery. With the right preparation and lessons learned, there’s no need to hit the “panic” button. Use our planning checklist to get your whole business — marketing, fulfillment, logistics, and shipping — on the same page to maximize holiday sales success.
Not every brand will see huge spikes in Q4 holiday sales. While consumers tend to stick to certain categories for holiday shopping, e.g., retail and electronics, every brand should have a solid Q4 holiday strategy in place. Toy manufacturers, for example, plan nearly a year in advance for the November/December shopping frenzy. For some toy manufacturers, they’ll bring in up to 75% of revenue over that four-week period, so coordinated planning across production, marketing, and fulfillment is critical. Should CPG brands follow suit? While you may not be selling much more sparkling water in Q4 unless you have a pumpkin-spiced version, brands shouldn’t take time off from getting in front of in-market consumers. You very well may see a natural bump in traffic, sales, and lifetime value as consumers are already online. Plus, keep an eye out for the post-holiday spike in gift card usage, healthy food, exercise trends and more.
Predicting the future is always fraught with uncertainty but historical data can reveal trends that businesses can prepare for. Because of 2020’s unpredictability, we recommend brands compare not only year-over-year but open the window to two years back. As unusual as the 2020 holiday season was, comparing two years’ worth of data can help normalize the peaks and valleys. In addition, diving into quarter-over-quarter within the same year and over two years can reveal when surges in sales may happen. Forecasting is useful across not only sales data, but also ad spend, competitive landscape, and an ecommerce growth perspective. It’s also important to accept that the best-laid plans — and, in this case, forecasts — may experience a higher degree of variability than expected. Sharing forecasts across internal teams and external partners, especially carriers, as early and often as possible can help manage expectations and reduce stress on essential resources.
Understanding (and respecting) lead times can make or break your holiday marketing and sales. Are your products produced internationally? Do you rely on out-of-state or country components or parts? Often there are several steps in the manufacturing supply chain to arrive at fulfillment and ultimately your channel of choice. Any delay along that route can impact inventory and customer happiness. In addition to understanding lead times, it’s critical for brands to know with certainty not only how much inventory you have but also where it will be at any point in the holiday sales cycle. Whitebox advises clients to consider using the same packaging and warehouse to fulfill across channels. You can quickly shift product to the channel where it’s needed and, in theory, commit to less inventory, which ultimately reduces operational costs. A 3PL like Whitebox can also provide transparency into where your inventory is most needed, geographically and more. This intel directly impacts your advertising strategy as well. (See #6 for holiday Marketing ideas.)
If you build a branded site with all your products, will consumers come running? Yes, the margins are typically higher on your branded site but there’s a high price to ignoring the ecommerce elephant in the room. 74% of U.S. consumers begin their product search on Amazon. More than half said if there was only one store to buy from, they’d choose Amazon. So, no, you can’t avoid or ignore where the eyeballs are, especially during the holiday period. For brands with a finite amount of budget or marketing resources, Amazon is a great solution. Use Amazon for discovery and to reach the widest swath of consumers. Build momentum and early buzz using Amazon Market Basket Data to test holiday bundles well in advance of the holiday crush. Starting now will increase your visibility and rankings, before competition surges in Q4. Once converted, you can drive loyal customers from Amazon to your branded site with special discounts, exclusive or limited-time offers, and more.
It’s possible to max out sales on Amazon. If you’re continuing to invest to acquire new customers but the needle hasn’t moved, it’s time for a backup plan. The good news is you have options, with Walmart, being number one. From our data, there’s actually little overlap between Amazon and Walmart customers, so expanding to the latter can drive incremental sales. For most brands, this combo drives the most meaningful revenue. An experienced ecommerce partner can review your product portfolio and channel strategy to offer recommendations on the best diversity of channels. These companies can also take on the burden of getting products to fulfillment channels or fulfill on their own for greater flexibility.
Sell early and often for holiday ecommerce sales success. With a short peak season and earlier carrier cutoffs, it’s in your best interest (and your consumers’ interests) to start early. There are a range of incentives in your marketing toolbox to deploy, leading up to and including Black Friday and Cyber Monday. Coupons and discounts are table stakes. Incorporate promo codes in your marketing ads and consider varying your pricing strategy to capture those first-comer sales. Offering post-holiday rebates can also keep momentum going into the new year. Some brands will see dips in Q4, e.g., fitness equipment or vitamins. Pump the brakes on doubling ad budgets to make up for that shortfall. The most important of all holiday marketing tips is to align marketing ad spend with your inventory strategy to avoid an out-of-stock situation. If there’s no product, stop advertising. Keep in mind, however, if you run out of stock on Amazon, you can do serious harm to your listing rank and visibility. For this reason, in particular, a diversified sales channel strategy and 3PL partner that can fulfill direct to consumers are worth evaluating.
If last year taught us anything, it’s that demand is unpredictable. Consumers don’t expect perfection, especially after the global pandemic disrupted supply chains and overwhelmed carriers. Your smartest move to engender lifetime loyalty is to communicate clearly and often with consumers — and don’t overpromise. Amazon won’t allow brands to oversell but on your branded site you may be able to take backorders. Be upfront with consumers about when items will ship and more importantly, arrival times. Carriers haven’t fully recovered from the strains of 2020, so work with these partners to understand those earlier cutoff times and share that information with consumers. There’s zero advantage to shipping fast if your shipping options are slow. If you use a 3PL, they can diversify your carrier portfolio to pick and choose shipping methods based on live comparisons, package by package.
The most wonderful time of the year doesn’t have to be joyless for brands. With smart planning across your organization and partners, you can grow your business and acquire new customers. What’s on your checklist for Q4 planning? Need help building your marketing or fulfillment strategy? Reach out to us for a free consultation today.