We’re rapidly approaching the 2020 winter holidays, and everything is still as uncertain as it ever was – particularly in retail. While there is always a certain amount of guesswork involved for retailers approaching the bumper holiday season (how will consumers spend? Will my marketing strategy pay off?), this year it has been amplified tenfold.
Traditional festive gatherings and shopping centre crushes are effectively off the table thanks to the ongoing coronavirus pandemic, but many consumers in North America, the UK and western Europe will still want to celebrate – and Black Friday and Cyber Monday (also referred to as Cyber Weekend to encompass the intervening Saturday and Sunday) will still be going ahead.
What does this mean for retailers, some of whom have been in “holiday mode” since March, while others have seen demand for their products fall through the floor? Will we see an increased surge in demand or conservative spending due to the ongoing global uncertainty?
While none of us has a crystal ball, many experts working in the ecommerce and marketing spaces have shrewd ideas about what might happen and how retailers can make the best of this time of year. We spoke to four of them: Chloé Pascal, Field Marketing Team Lead at retail personalisation agency Nosto; Rich Brown, Customer Acquisition Director at Buyagift and Red Letter Days; Sophie Moule, Head of Marketing at search intelligence platform Pi Datametrics; and Parry Malm, CEO at AI copywriting company Phrasee.
Here’s what they had to say.
Be prepared for uncertainty – and communicate with your customers through it
Parry Malm, CEO, Phrasee:
For many retailers, Black Friday came early this year – back in March. If you were able to transition your business to near-100% online, then chances are your web business exploded nearly overnight.
But, as the holidays approach, consumer confidence is neither high nor low – it’s just uncertain. No one can be certain of their own personal finances moving forward anywhere in the world. This is due to a number of factors – COVID, the US Election, the Brexit situation. Will people be spending, will they be saving, will they be extra incentivized to seek out deals?
We won’t know until the dust has settled, and if you’re on either side of the fence, you’ve a 50% chance of being right. For those of us who honestly don’t know, here’s what I’d suggest…
2020 has forced brands to expedite their digital transformation plans, and now it’s a foregone conclusion that digital-first marketing teams will prove to be the victors. Many will resort to increasing the volume of marketing activity – throw money at the problem, so to speak. But – and never forget this – if your message sucks, then all your efforts are a big, fat waste of time. Now, more than ever, it is critical to nail your messaging, at scale, on every channel. Amidst these uncertain times, that’s about the only thing we can be certain about.
Rich Brown, Customer Acquisition Director at Buyagift & Red Letter Days:
Retailers need to prepare for VUCA – VUCA stands for volatility, uncertainty, complexity and ambiguity. It’s used to describe unpredictable situations that businesses face. This year, it has never been more appropriate.
Whilst you never truly know what will happen, it’s important to prepare for possible eventualities. What happens if there is another lockdown? What do you need to tell customers? How does your marketing change? What if things pick up better than expected, are you ready to capitalise on that? Ask yourself all these questions and ensure you have a protocol to follow which can kick in as and when it is needed. Given Q4 is such a key period, reacting 12-24 hours too late can make or break a key sales period, particularly around Black Friday.
This year more than ever, it’s extremely important you consider your customer’s position. Everyone has been impacted differently, so spend time ensuring everyone in your marketing team is clear on the core messages you want to communicate. Consumers are looking to brands they can trust and that communicate well with them. Be careful that your messaging doesn’t alienate anyone or risk being misinterpreted.
We’re focusing on reassuring our customers that they can shop with us with confidence with our extended validity, our Covid guarantee and a considered approach to messaging. We’ve also used this year to improve our CSR by becoming carbon neutral to help increase our customer advocacy.
Stay close to the data
Sophie Moule, Head of Marketing, Pi Datametrics:
There has been a lot of speculation around what will happen with Black Friday this year. On the one hand, thanks to data from the Office of National Statistics, we can see that percentage share of online sales is higher than ever, shopping demand in certain categories is up hundreds of percentage points, and this Black Friday is set to be ‘a second peak’ in online shopping this year.
However, retailers also need to think about stock availability, whether they need to discount based on high demands for their product, supply chain capability, and a growing consumer consciousness of the importance of responsible buying.
For example, in the consumer electronics space, we saw demand up 65% year-on-year with a peak in March higher than the peak in November last year – how will retailers stocking these products play it this Black Friday? Additionally, what demand will replace categories such as ‘party wear’ – that we should have seen peak by now but haven’t?
My advice to retailers would be: don’t think about what worked well for Black Friday last year, think about what consumers want in this climate. Communication is key; state early on whether you are running discounts, which categories you will be applying these discounts to; think about what kinds of products they will want. Homeware products, for, example, have gone through the roof in demand this year! Stay close to the data in an ever-changing situation, so you can remain agile and give the customer what they want.
Consider what the shift online will mean for your business
Rich Brown, Buyagift & Red Letter Days:
With local lockdowns impacting the high street, we expect a higher proportion of sales to be made online. Consumers are likely to avoid the high street if they are self-isolating and retailers may see lower footfall as they try to maintain social distancing measures.
Delivery and logistics may feel the strain. With the potential for fewer households mixing indoors it’s possible that there will be more gifts posted to recipients than taken and given in person. As a result, it’s important for retailers to make sure they can handle the potential increase in demand and also ensure consumers are aware of longer than expected delivery times should that happen.
Chloé Pascal, Field Marketing Team Lead, Nosto:
If we look at past performance specifically on Black Friday weekend, Nosto’s data suggests that there has been a steady rise in sales from 2014-2019 in the UK. When we look at device breakdown between 2018 and 2019, we see an overall increase in both mobile traffic, order as well as revenue share. So, let’s fast forward to how this year’s ecommerce performance will affect BFCM (Black Friday and Cyber Monday) 2020.
While we expect there to be high traffic on Cyber Weekend, there are still a number of unknowns leading up to the event. We can safely predict that continued store closures and restrictions will all lead to a bigger focus on ecommerce and digital experiences as consumers are now more “available” to shop online. But it also means that competition for time, money and attention of consumers will be steeper than ever.
To offset this, retailers around the globe will do everything they can to drive more sales. And with little time left to prepare, they’ll be tapping into creative strategies to help them stand out from the rest. They should focus on some quick personalisation and online merchandising wins to drive higher order values and sales online.
Drive up average order value with ‘dynamic bundles’
Chloé Pascal, Nosto:
All retailers know that average order value (AOV) is virtually a magical metric and inarguably one of the most important tactical and strategic metrics in ecommerce. Improving it brings down relative cost per delivery and drives customers to shop multiple product categories versus just one – which positively impacts crucial metrics like customer lifetime value (CLTV) and revenue per visitor (RPV).
So, it’s no surprise that Cyber Weekend is a great time to put some additional focus on increasing your AOV, and Dynamic Bundles are a great way to achieve that.
In a nutshell, Dynamic Bundles are a way to create sub-collections of products that go well together. They leverage the everyday knowledge of ecommerce managers and visual merchandisers and put that knowledge to use: either through individual product SKUs, or product categories.
Popular use cases are often along the lines of “Frequently bought together” or “Complete the Look” recommendations.
Maximise your category page real estate
Chloé Pascal, Nosto:
A 2019 analysis of Nosto-powered brands revealed that 70% of online sales originate from category pages. During Cyber Weekend, retail brands should definitely try to maximise their category pages to drive more sales. The real estate on your pages is limited, so you’ll want to use it effectively – and definitely don’t waste it.
The first thing we recommend is to hide your “Out of Stock” products at the bottom of the page or category. As a shopper hunting for deals, there’s nothing more annoying than browsing through pages and pages of out of stock products. And even worse is landing on a category page through a Black Friday paid advert and seeing that everything that was promoted is now out of stock. Needless to say, that traffic will usually bounce, meaning those shoppers won’t stick around to browse for other products.
Secondly, you want to optimise that space you have available to showcase the products you feel are most important. You can for example combine high converting products with products with high inventory and discount percentage. At the same time, you also have to get your segmentation set up so you create tailored experiences for your high spenders, as well as your shoppers with particular brand affinities. If rotating inventory is less of a priority for you, you can also consider ranking your category pages primarily by margin – so put your most profitable products up-front.
Focus on value – not just on discounts
Rich Brown, Buyagift & Red Letter Days:
Over the Black Friday weekend, consumers will be looking for savings and more value for money. We’ve seen that searches for discount codes have increased by 23% year-on-year and I expect this to increase for November and December.
I specifically want retailers to focus on value rather than just discounts. It’s very easy to get caught up in ever-increasing discounts but plan your promotions for the long term, and be wary of potential short term losses and how they may impact your business. Make sure you fully analyse promotions you run and how they can impact customers in their subsequent future purchases. Customers want value and even if you can’t offer high discounts, ensure you are pushing the value of what they receive.
Ecommerce Quarterly: Q3 2020
