Peak Period: How to Plan For Successful Trading
By Paul Watson - CEO at Volo Commerce
The last quarter of the year is the busiest and most profitable period for online retailing. Shoppers frequently make large purchases preparing for Halloween, Black Friday and the period leading to Christmas. Of course, certain product categories such as home and garden or fashion have different spikes during the year depending on the seasons but for a significant number of online merchants, Q4 is the ‘hottest’ period of the year.
This shopping behaviour has an important impact on strategic planning and decision-making. There are certain steps to keep in mind when planning for peak periods in online retail specific to your business.
Data is the name of the game
Successful retailers usually begin preparations for their sales windows at least six months in advance.
Start with analysing historical data from the previous year to create a clear map of fast moving products, profit margins and the overall performance of product categories in your inventory.
Your business will see great benefits if you regularly analyse:
- Sales performance on each marketplace/channel
- Core financials – sales per hour/day, region, etc.
- Category specific trends
- Website traffic, search engine performance and other referral sources
- Social media interactions and growth
- PPC and other digital marketing activitiesn
- Warehouse efficiency and shipping speeds
- Customer satisfaction and returns
If there is a number or metric that can be assigned to an activity, analyse it. Thanks to smart ecommerce platforms and solutions now on the market, you can uncover any data you might need in a matter of minutes.
With this information you’ll be able to create a strong product strategy, order the necessary products in advance, research new suppliers and assess what trends are likely to take the market by storm in the next peak period.
Next on the list is attracting new customers while keeping existing buyers loyal and happy.
In 2016 we witnessed consumer expectations rising to new heights. Shoppers now favour choice, great value, convenience and almost instant gratification. Online merchants need to step up and ensure a seamless shopping experience if they want to stay ahead of the competition.
Start by objectively evaluating warehouse processes, delivery options and the customer service department. More than ever, customers value quick, free deliveries and good quality support should any issues arise.
If it’s logistically and commercially realistic, consider investing in your logistics to facilitate one-day delivery. Quick delivery is fast becoming part of the competitive proposition. That said, in some cases it’s simply not feasible. Smaller retailers may simply not have the resources or the margins.
There’s good news in that case. Reliability is still more important than speed. When it comes to delivery, the chief concern for the customer is that their order arrives when the retailer told them it would arrive. Manage expectations, and deliver accordingly. Failure to meet promises can create some serious ill will and prevent shoppers from returning.
Product listings have always been important but in 2017 retailers should invest even more energy and effort into this area as the available choice of similar products has increased and buyers don’t have the patience to sift through every available offer. Good quality pictures, relevant information and positive customer reviews will have a major impact on the purchase decision.
As the ecommerce market is becoming increasingly competitive, marketing plays a critical role in the growth strategy of any online merchant.
Retailers have already accumulated huge amounts of data regarding customer preferences and behaviour. In 2017 an increasing number of etailers will start harnessing this information using artificial intelligence and analytics to create their marketing campaigns.
Personalisation and engagement will be dominant trends when it comes to customer retention and acquisition this year. Retailers should keep a close eye on these new technologies and ensure they keep up with the market.
Another important component of a successful marketing strategy is a strong discount and promotions policy. Of course, you can adjust this according to market conditions and competition closer to a specific peak period, but knowing in advance what products you expect to sell quickly and their associated profit margins will enable you to prepare ahead of the rush period.
Once you have logistics and the marketing strategy ready, it’s time to do some dry runs to check if everything in place works as expected.
Don’t forget to test your website thoroughly before peak periods. Ensure there are no bugs, glitches or complicated purchase procedures that will deter customers from completing their shopping.
Internal communication is just as important as external communications. Make sure employees, suppliers and partners are ready for the peak period and know what is required of them every step of the way.
The final element to consider is global selling. Exploring international peak periods is a good strategy for maximising your sales throughout slower domestic periods. Using this approach you can avoid the need for heavy discounting that can potentially erode profit margins, free up capital stuck with seasonal products and reduce warehouse costs.
Studies show that over one billion internet users are now shopping online and international expansion is bound to accelerate this number in upcoming years, especially as retailers look to tap into the potential of new emerging markets.
Make sure that you keep an eye on the opportunities beyond your borders as it can be a significant growth avenue and push you ahead of competitors.
With ever increasing competition, soaring customer expectations and uncertainty affecting the global marketplace, creating a long-term roadmap is more important than ever. Growth needs to come from sustainable market opportunities so your ecommerce business can succeed and thrive for years to come.
This is only possible when your development plan is based on accurate data, takes into consideration each customer group’s needs and has the necessary agility and flexibility to adapt as market trends appear and dissipate.
As Amazon Prime Day has shown, new peak periods can emerge suddenly. With the above capabilities embedded within your business, you should be able to take new and existing peak periods in your stride.