Preparing for the holiday in a particularly volatile retail environment is stressful for a lot of marketers — to say the least.
There are a few key factors that are contributing to the particular volatility of this year. Firstly, ecommerce brands are seeing lower traffic than they have in the past few years. Coming out of the pandemic, some shoppers are reallocating funds to travel and experiences. Then, you have shoppers whose purchasing patterns are more determined by “if” to spend rather than “where” to spend. With inflation being at a forty-year high, shoppers who might have spent more on extras are tightening up their budgets.
And it doesn’t stop there. Inventory issues continue to persist with retailers left with too little or too much inventory. This forces discounts and surplus inventory of products that aren’t selling, and inversely, products that just aren’t coming through to your warehouse. Mix in the fact that paid media costs are rising, and your holiday preparation is becoming that much less cheerful.
Despite all of these trends happening in the retail world right now, marketers are expected to hit aggressive channel and revenue targets.
That means it’s time to get creative about solutions.
We sat down for a special edition of our Coffee (Wine) and Commerce roundtable with Women in Retail to discuss how to prepare for the holiday season in a topsy-turvy retail environment with brands including Lulu and Georgia, Oriental Trading, TeePublic and more.
Here are our top insights from the discussion with advice on how to combat inventory issues, reduced ecommerce traffic and diminishing returns on paid channels.
Supply pressures are leading to stock outs and discounting to move product.
Solution 1: While You Wait
We found that during the last holiday, 69% of shoppers abandoned a brand when they encountered a product page that was out-of-stock. Don’t let those shoppers go! You can combat the bounce with a well-defined ‘While You Wait’ strategy. First, you should have a back in stock sign-up directly on the product page that notifies a shopper as soon as the product hits your warehouses in real time. This way, if a specific product is non-negotiable, shoppers can be ready when it comes back in stock. But often, there are products that will work just as well — or even better — than the original. While shoppers wait, you should boost product discovery by offering personalized recommendations that can act as alternatives to the out-of-stock product. This gives the shopper a way to keep engaging with the products you have.
Solution 2: Pre-order As a Strategy
Another strategy that shoppers can take is leveraging pre-order. WIth pre-order, shoppers are committing to a purchase and securing the product that they want rather than bouncing when they see that a product is out of stock. But remember that transparency is key. Customer experience is the top factor that makes or breaks a shopper’s relationship with a brand. Having a living product catalog that keeps your ecommerce site up-to-date is critical in allowing you to maintain that trust with real-time, accurate data.
Softness in traffic with shifts in-store, travel and inflation.
Solution 1. Encourage full-price buying
By knowing which of your shoppers are likely to buy at full price, you can make up for some of that lost traffic.You can leverage this information across channels to bring back those shoppers that will buy at full price by showing personalized recommendations and new arrivals. Even better? Layer in a predictive element to your marketing and only target those shoppers that have a higher likelihood to convert based on their past browsing behavior. This will bring high quality traffic into your ecommerce site.
Solution 2. Get more targeted with audiences on paid and social
Going a little deeper into what we hinted at before, bringing in the right traffic means getting really targeted on paid media. That means getting predictive about how you can acquire. By leveraging data on lookalikes, you can discover audiences that are more likely to buy, similar to their audience counterparts. You can also segment based on a shoppers’ predictive customer lifetime value and get personal by only showing them products in their preferred categories.
Pro tip: Measuring success is critical during the holiday. That means you need to run holdouts and understand the incremental impact of paid media channels for your business. In the retail environment we’re in right now, this is more important than ever to effectively test and learn and drive revenue.
Diminishing Returns on Paid Channels
Brands are seeing diminishing returns on paid media causing higher costs of acquisition, affecting profits.
Solution 1. Understanding channel preferences
Rather than sending out ads en masse, consider only sending ads to shoppers that are more likely to engage on those paid channels. For example, if I generally only engage with brands that send me a text message, there would be no reason right now to send me an ad. However, if I engage on both email and with Facebook Ads, there’s an opportunity there to create a custom journey with touches that only go across the channels I’m more likely to engage with. Having a cross-channel experience that is unique (rather than blasting your list and hoping for the best) will help save on ad spend by leveraging it as a tool for repeat purchasers and drive down CAC.
Solution 2. Shopper lifecycles
One big strategy that brands employ is retargeting last year’s holiday shoppers to come back for a second purchase. You can also extend that strategy by digging deeper into other aspects of each shopper’s lifecycle with your brand. For example, segmenting shopper audiences based on their purchase history, lifetime value and shoppers that have a high likelihood to purchase based on their behavioral history. Understanding your holiday buyers and your loyal shoppers’ buying cadences will help you optimize spend by only targeting those shoppers who are more likely to come back for the holiday.
The reason for the season
The reason for a retail marketer’s holiday season is the shopper. You can bring shoppers back for the holiday by meeting them where they are, knowing their unique purchase patterns and marrying that up to the products that they love.