Which Brands are Best Positioned for a Lucrative Holiday Season?
2020 has been anything but a normal year. The retail landscape is continually shifting but this year it’s been changing at an even faster rate due to COVID. Despite an uncertain economy, consumers are still making plans to shop for the holidays. According to eMarketer, Prime Day alone is projected to generate $6.17B in the United States, up nearly 43%, versus a trailing three-year average of 63%. In fact, Pipslay’s August 2020 poll found that 48% of consumers plan to spend the same or more on Prime Day this year versus 31% who plan to spend less. Additionally, Target and other retailers are planning early holiday sales like Prime Day to capture these purchases. So, how are the most prepared brands getting ready for this growth?
There are several factors contributing to which brands are best set up for Q4 success:
- Always-On Marketing Strategies Targeting Early Holiday Shoppers
- Order Fulfillment Contingency Planning and Delay Anticipation
- Inventory Supply and Diverse Sales Channels
Always-On Marketing Strategies Targeting Early Holiday Shoppers
Consumers are shopping for the holidays earlier in 2020 than they have in past years. According to a Digital Commerce 360 and Bizrate Insights survey from September, 68% of respondents plan to start their holiday shopping by early November. More than half of those respondents have already begun shopping. Therefore, brands who employ an “always-on” approach to eCommerce advertising are reaching holiday shoppers more effectively today than those with budgets staggered more toward Cyber 5 and early December. That said, it is not too late to change course, reallocate budget, and reach these early shoppers!
Order Fulfillment Contingency Planning and Delay Anticipation
One of the reasons for early shopping in 2020 is the presumption that there will be logistical delays for the major parcel carriers as we move further into Q4. According to Salesforce’s VP of industry strategy and insights for retail and consumer goods, the overall number of holiday packages that will be sent out globally is projected to surpass carrier capacity by 5%. In Q2, Amazon delivery times for non-essential products increased to up to 30 days as essential categories took priority. Non-essential brands offering direct fulfillment or dropship services themselves were able to fulfill orders more quickly than Amazon. For the first time, 1st party Amazon vendors and Fulfillment by Amazon (FBA) sellers were at a disadvantage. While we may not see this exact situation arise in Q4, brands who have a diverse portfolio of fulfillment options are less susceptible to problems caused by the logistical strain specific to certain retailers. Lastly, if you are guaranteeing delivery by a certain date, you may want to move up “order by” deadlines and speak with carrier partners about expected delays.
Inventory Supply and Diverse Sales Channels
Product availability is important from two perspectives: supply and retailer diversification. Brands with higher inventory reserves and/or shorter supplier lead times have a greater ability to fulfill unanticipated demand. Similarly, brands with a more diverse sales network will reap the benefits of those retailers while negating potential downsides. For instance, although many customers will shop on Amazon, others will be drawn to retailers with curbside pickup options. In a survey of over 1,000 online shoppers, 24% used curbside pickup multiple times since March and 52% at least once. Out of the 52% that used curbside pickup at least once, 39% stated they would continue to use these options for the rest of the year. Brands with a healthy mix of eCommerce marketplace and online retailer presence will benefit greatly from offering a wider array of fulfillment options to customers.
In times of uncertainty, adaptability reigns supreme. The brands that are most flexible in their advertising strategies, fulfillment options, and demand forecasting, and most diverse in their sales channel portfolio, are set to win this holiday season. Of course, that assumes product listings and customer experiences are already optimized.