An e-commerce storm is coming this Black Friday. England sits under a second national lockdown and Victoria, Australia emerges from a lengthy regional lockdown. Online traffic continues to climb as the world is homebound and retailers heavily prepare all parts of the customer journey to meet customer demand and boost profits this golden quarter. But are you really ready for what’s to come?
1. 2020 E-COMMERCE LEARNINGS
2. WHAT CAN WE EXPECT THIS E-COMMERCE BLACK FRIDAY?
3. THE ONE E-THING TO FOCUS ON THIS E-COMMERCE BLACK FRIDAY
“People will remember how retailers performed and put themselves across during the pandemic,” said Andy Mulcahy, Strategy and Insight Director at IMRG. “Retailers who get this wrong, maybe through being dishonest about the capacity to deliver in time for Christmas, will likely struggle to win those customers back.”
It’s crucial to get it right. Because this time, shoppers may be less forgiving to a poor customer experience.
2020 E-COMMERCE LEARNINGS
We went from catching the 7AM train to logging in at 9AM from our homes. Lockdown transformed everyday life and stimulated erratic customer behaviour. Retailers struggled to keep up with new processes, safety measures and customer demand, leaving shoppers feeling pressured into “you snooze, you lose” panic buying.
Haunted by uncertainty, digital newcomers turned to offsite channels such as Google Shopping to fulfil their needs and are becoming more open to purchasing new products from different brands. Retailers are now exposed to new customer acquisition opportunity through product and brand discovery on these key channels - accompanied by more online competition and limited marketing budgets.
“Getting your products found online is becoming more competitive and it’s why building and distributing accurate product data is vital. Our clients continuously optimise their feeds to quickly adapt their campaigns and launch onto new channels to cast a wider, more accurate net to ensure their products are found by shoppers looking to buy."
Our marketplace partners saw similar patterns in Australia, as merchants quickly adjusted their strategies accordingly to get their products visible on multiple channels/marketplaces and in relevant product categories, to build a stronger online presence.
“The winners were those that could adapt quickly and pivot business strategy accordingly.”Tali Lederman, Catch.com.au marketplace
“One of those strategies was a greater online presence and adopting a more omnichannel approach to business. We saw enormous growth of sellers on the Catch marketplace that have bolstered theirs and our impressive results.”
WHAT CAN E-COMMERCE RETAILERS EXPECT THIS BLACK FRIDAY AND CHRISTMAS?
It’s a definite digital Black Friday. Last year, 71% of U.K. shoppers used three or more channels to do their holiday shopping. This year Google’s prophecy of more than 70% of U.K. shoppers doing their Christmas shopping online is even more likely to come true, as the second lockdown prompts consumers to cash in on Black Friday more than ever before. And with Google’s free product listings and Facebook Shop, more retailers can sell to a larger market thanks to new digital shoppers, who in turn will have more choice of products from newly listed retailers. But what does the digital shopping surge mean?
“Too much volume falling too close to Christmas is going to cause operational problems. It looks like we may see an even bigger concentration of sales volume over the Black Friday period than is usual,” said Andy Mulcahy, IMRG.
In Victoria, Australia, the recent lockdown has made shoppers reliant on e-commerce and they’re expected to continue buying online to find the best deals in peak season. In fact, Click Frenzy is expected to boost revenue by around 100% YoY and Black Friday to rise by over 50% nationally.
“Customers will now expect high levels of service including dispatch, delivery and pre and post customer servicing,”John Barkle, MyDeal.com.au marketplace.
This adds pressure for all brands, retailers and sellers, as they must ensure stock inventory, fulfilment and delivery logistics are efficiently managed. Australia Post said Victoria alone had a 170% YoY growth in volume during lockdown but saw major delays due to the lockdown creating problems and reducing capacity at processing facilities to a third. And as Australia Post cautiously sets a Christmas delivery deadline of December 12th to cope with the anticipated demand, it’s stimulating a compressed buying season for shoppers.
1. CYBER WEEKEND TURNS INTO CYBER MONTH
Google predicts retailers will need to brace themselves for a month-long Cyber Monday. This is evident as high unemployment from a unique recession has created more financially cautious shoppers with deal-seeking behaviour on Comparison Search Engines and Marketplaces. Amazon and Wowcher’s Black Friday sales are already live – and in terms of trending product categories during this golden quarter, anything is up for grabs as shoppers focus on making their homes more comfortable.
“We're seeing growth across all categories,” said Tali Lederman, from Catch. “Consumers are investing in their surrounding environment where they have spent more time than they usually would have in the past; this has impacted categories such as home decor, home office, gardening & outdoors and tools and hardware. People are also self-pampering in categories like health and beauty.”
Top Tip: Encourage early purchases to ensure you’re able to cope with demand, by providing as much information and transparency as possible to help customers make purchase decisions.
“Ensure customer expectations are aligned with your business capability and scale: under-promise and over-deliver is crucial here," said John Barkle, MyDeal. "If your delivery takes two weeks and your dispatch might be delayed by a week, let your customers know this before they purchase and give them the opportunity to include this information in their purchase decision."
2. NEW CUSTOMERS WILL DRIVE ONLINE SALES VOLUME
More first-time digital buyers are inevitably expected to shop online this Cyber Weekend. According to Google, more than 50% of shoppers tried a new shopping service for the first time this year . We expect this to grow, as retailers will increase their paid ad spend to maximise their online presence to drive impressions and clicks, acquire new customers and nurture them into returning customers.
Top Tip: Your product data feed drives your online presence on Google Shopping, Facebook, Amazon and other channels/marketplaces. Having inaccurate product data and errors in your data feed means your product listing ads can be rejected and not show up for new online shoppers looking to buy. It’s critical to regularly replenish, refresh and optimise your product data to get your products showing in the most relevant product searches and drive your product listing ad impressions, clicks and revenue.
Need help with your data feed health? Get your data feed audit now.
3. PRESSURE ON STOCK INVENTORY
High traffic and flat conversions typically mean customers are waiting for the right time to make their purchase (this would be the case for non-lockdown areas). But as for England’s second lockdown, retailers should anticipate a large surge in orders during a majority of peak trading season, which can be overwhelming to fulfil in time for Christmas.
“Christmas is going to cause operational problems,” explained Andy Mulcahy, IMRG. “Social distancing in warehouses means it’s hard to process huge volumes quickly.”
Top Tip: “Ensure that products retailers choose to include in Black Friday sales have ample stock levels to cover increased demand will be critical to sales growth and customer satisfaction rates,” said Tali Lederman, Catch. “With the increase in marketplace utilisation in retail businesses, product availability will be a critical metric to ensure success and using Intelligent Reach to ensure these figures are updated across all of a retailer’s marketplace platforms is an advantageous strategy to adopt.”
If you’re using data feed management, having the right labels and rules can help you effectively manage your stock inventory from your source feed. You can effectively use labels for different stock levels to efficiently manage the right products, such as excluding products with a low inventory. Our clients can create rules to populate dynamic labels to power exclusion rules e.g. “apply 'moderate stock' to any product with stock quantity between 4 and 50” – you can also have the flexibility to exclude these products from Facebook and keep these showing in Google Shopping. And if you want to set up promotion rules using a combination of dynamic labels on product categories, we make it easy to do so e.g. setting up promotions on based on “Dresses” and “High Margin” labelled products.
For even better control over your inventory management post-peak, find out how our clients connect to our stock management interface to keep your product data feed updated as close to real-time as possible.
4. CLICK & COLLECT IS DEFINITE
The U.K. government announced that Click & Collect will be exempt from COVID-19 lockdown restrictions, which gives customers the convenience they yearn for in their shopping journeys. This takes some pressure off delivery companies and allows retailers to make the best use of their high street brick and mortar stores as mini-fulfilment centres. Retailers can meet customer demand through a frictionless customer journey, by innovating all resources and facilities as best as possible.
For Australia, the flexibility of visiting brick and mortar stores give customers more power to leverage online-to-offline (O2O) by researching stock availability through Local Inventory Ads. 65% of shoppers said they plan to use online to confirm if an item is in stock before, going to buy it. This helps shoppers adhere to social distancing rules with direct visits that minimise the search time and risk of exposure to the virus.
Top Tip: To ensure retailers meet customers where and when they feel comfortable, Local Inventory Ads are encouraged to accommodate shoppers as best as possible. Update your Merchant-Hosted Local Storefront and leverage Google’s Pickup Today/Later and Curbside Pickup to provide customers with more convenient ways to receive their orders.
5. PRICE-CONSCIOUS CONSUMERS
Uncertainty means shoppers are more cautious in their purchase decisions. The rise in unemployment and reliance on government programmes, such as the U.K’s furlough scheme and Australia’s JobKeeper Payment scheme, has made consumers more price-conscious. But even with limited budgets, consumers are still looking to invest in the right deals.
Only 20% of Aussies plan to spend over $500 on gifts this year, which is down 30% from last year. But according to MyDeal the recent federal budget in Australia, which is designed to stimulate the Australian economy out of recession, has been well-received by the community with consumer confidence at its highest level in the past two years.
“Customers are going to be more price-conscious and deal savvy than at any other time in the last ten years,” said John Barkle, from MyDeal. “Winning on price will be crucial to success and taking small measures like placing emphasis on and highlighting genuine price discounts on listings will go a long way.”
Top Tip: Customers are likely to purchase if they feel comfortable and confident in getting the best deal. Keep an eye on competitor pricing and ensure you’ve got the flexibility to be reactive in adjusting this when required. We’re also seeing businesses offering flexible payment options to encourage shoppers to spend during Black Friday and the rest of the golden quarter.
“As a by-product of Catch offering customers with a variety of convenient payment solutions, such as ‘Buy Now, Pay Later’ solutions, we see customers spending more per transaction with the flexibility to pay it off over time,” said Tali Lederman, from Catch. “This will give customers leeway for Black Friday and allow them to still enjoy the holiday season despite the economic difficulties of the year.”
THE ONE E-COMMERCE THING TO FOCUS ON THIS BLACK FRIDAY
To maximise sales and outperform competitors throughout this “Cyber month”, focus on one thing.
“Building a flawless customer experience and using your product data to make it frictionless from the start of the shopping journey."Sami Bhasin, Intelligent Reach
“Customers easily finding the products they’re looking for actually kick-starts a pleasant experience. But you’ll need to maintain this standard and see it through the rest of the customer journey.”
From the first digital touchpoint right through to fulfilment and delivery, it’s essential to minimise any friction. Getting your products found by relevant shoppers looking to buy is achieved having accurate, up-to-date and optimised product data, to ensure your product listing ads fulfil your target shoppers search intent to increase impressions and clicks.
But be realistic in what you can deliver and avoid overpromising to shoppers, as you need to keep customer expectations at a manageable level. Inventory and order management plays a big part here, as your data needs to constantly be updated and replenished as often as possible. This helps keep product availability accurate and prevents you from selling any out-of-stock items, which can disappoint customers and quickly turn a pleasant experience into a poor experience.
It’s going to be a longer period of competitive selling, so distributing your marketing budget investment across the month (or even longer) is essential. With customers utilising multiple channels in their shopping journey, it’s the perfect opportunity to ensure you allocate budget accordingly and that your products appear on these channels. Utilise your Data Management tools to get a clear insight into your ROAS on a product level and ensure you’re quick and agile in optimising your product data to help maximise selling this golden quarter.
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