November 2nd, 2018

Holiday Shopping Lessons Learned — How Brands are Preparing for the 2018 Season

The holiday season is upon us — is your brand ready?

According to Internet Retailer, U.S. shoppers are expected to spend more than $119 billion with online retailers between Nov. 1 and Dec. 31 this year — an estimated 15.5% (or $100 billion dollars) over the same period last year.

This is great news for brands as a whole, but with progressively noisy channels, there’s no guarantee that your brand will benefit from this momentum. Taking into account this season’s predictions, our own experience, and lessons that we’ve learned from our clients over the years, here are our recommendations for setting your brand apart and planning strategically this holiday season.

First, you need a strategy.

To set your brand up for success, it’s critical that you plan ahead and ensure all teams are aligned and prepared to execute. Here are three steps to do this effectively.

STEP 1: Build your plan.

Focus on two important questions: What are you trying to achieve, and how will you measure success? Brand manufacturers may have vastly different answers for this question, ranging from getting new customers to driving record revenue numbers, but the result is all the same: Plan for your success, and then outline how to measure each point over a period of time.

STEP 2: Communicate the plan to all key stakeholders.

There will be a lot of moving parts as the holiday season gets into full swing, and you’re only going to be as strong as your weakest link. Communication is critical to ensuring that everyone is on the same page. Alert the stakeholders of your plan and express your expectations of their fullest extent, impressing milestone and timelines frequently so that everyone understands their responsibilities and goals.

STEP 3: Rely on your data.

Agility is key. The great thing about eCommerce is that you can monitor metrics and make changes in real-time. Swim in your data, and don’t hesitate to flex your strategy to get the outcome you need. This means thinking critically about how you’re measuring your KPIs and also how you’re building your dashboards, as these data points will inform your decision-making as you follow and react to important trends throughout the season.

Key Considerations for the Holiday Season 2018

Here at Ally, we’ve helped many different brands develop their eCommerce strategies year after year. We know what works, what doesn’t work, and what you need to be prepared for when it comes to planning your holiday sales strategy. Here’s our expert advice for pricing, inventory, shipping, and management this holiday season.

Pricing

The holiday season unofficially kicks off with Black Friday and Cyber Monday. Many consumers complete most or all of their holiday shopping for the entire season on these two days. Our recommendation is to discount site-wide across the catalog, while also including specific spike opportunities.

When it comes to eCommerce channels, the best strategy is to recreate what happens in the brick-and-mortar experience as much as possible by including deep deals and doorbusters. A 40” TV doorbuster at Walmart is guaranteed to bring people to the door — why not recreate this strategy to bring the same traffic to your site?

It can be difficult to strike the balance between competitive pricing and pricing to make a profit. We recommend to look at profitability across the entire promotion as opposed to per-transaction order economics. If you’re not sure how to approach discount levels, a good rule of thumb is to start with a 20% discount threshold across the catalog, with doorbuster discounts rising as much as 70% on select items.

Inventory

Long-lead planning for the holiday inventory spike is vital to your overall success — and the sooner you start planning for the influx, the better off you’ll be. To get started, pinpoint where you want to see a return on investment — be that engagement, sales, or profit — and then map your specific goals backward from that final point. With this tactic, you’ll discover what will happen from an elasticity standpoint and allow you to plan for any eventuality.

To optimize your data and provide a better ROI, allocate your inventory by the channel where you want to capture new customers. This works because you’re not just supplying a demand — you’re anticipating the needs of your customers.

Shipping

Christmas is on the 25th every year, but, without fail, many consumers will still wait until the last minute to order gifts. To make things even more complicated, the day of the week that Christmas falls on can significantly impact your shipping logistics, delivery, and messaging. For instance, when Christmas falls at the beginning of the week (coincidentally, like it does this year), your last days for delivery really fall in the previous week.

“Last day to order” messaging can help dissuade customers from procrastinating. You’ll also want to keep in mind how capable your systems are for managing two key points: your organization as a merchant in terms of fulfillment, and your logistics provider in terms of distance from the origination point to the final destination. To do this, try establishing clear expectations for both your fulfillment process and your logistics provider, and understand what your most likely pain points will be.

Returns

Here’s the reality: Your returns will scale with your order volume, and your best plan of action is to go on the offensive. Besides planning for a minimum returns threshold in terms of reverse logistics, customer service, and payments, you’ll also need to verify that the product you are selling is the one that is actually being delivered. This means understanding the fulfillment process, verifying that each of your listings is accurate, and making sure that the products listed are the same ones that are being shipped.

For instance, it’s not uncommon for doorbuster products to have unique SKUs, which can easily upset accurate fulfillment as the rush of order volumes hit. You should also ensure that any and all temporary warehouse resources are sufficiently trained on the importance of good operational processes and how that maps to all requisite customer experience SLAs.

Another great way to treat returns is to automate parts of your process while customizing other areas that require it. For instance, Ally works with its customers to involve people in the returns process in a scalable manner when and where appropriate. This provides an automated returns process for goods at a lower, say $25, value, while adding a personal touch with an intent to save the sale for customers at higher spending, say $1000, thresholds.

One of the most important things to understand about the customer service experience is that assuring the customer that the product will be returned “no questions asked”. The next thing to remember is to understand why the product didn’t meet the customer’s need. To help manage this process, have a CRM system in place that allows for the disposition of all returns. This feedback can better inform your business and increase customer loyalty when effectively leveraged.

Looking Forward

Unlike years past, the 2018 holiday shopping experience will be vastly different thanks to big retailers like Toys R Us and SEARS no longer dominating the traditional retail sector.

By keeping our tips and takeaways in mind as you build your 2018 holiday action plan, you’ll not only improve your revenue and processes, but you’ll also better understand your customer and cement your place in a retail environment that is swiftly moving to eCommerce.

If you’re looking to build or expand your direct to consumer eCommerce business, partnering with an established multi-channel partner is the best way to get started. Contact us to learn more.

About the Author: Craig Haynor

Craig has served as the VP of Account Management and Operations at Ally Commerce since 2015. Before that Craig spent 12 years working in various sales, marketing and operations roles for a brand manufacturer in the musical instrument industry. He had a front-row seat to the disruption ecommerce introduced to the company’s traditional retail distribution network, and then to the brand itself as they formulated and executed upon a direct-to-consumer strategy.