5 Tips for Tackling the Holiday Sales Season
The significance of the holiday sales season in the midst of a pandemic is not lost on retailers. With cases rising each day, a new round of lockdowns has been imposed across pockets of Europe, Asia and Australia. Despite worries of reduced spending, the recent success of Single’s Day and Amazon’s Prime Day proved consumer demand is still out there for the taking. As we edge closer to the holidays, online traffic is expected to skyrocket as consumers are still wary of shopping in-person. Retailers will have to pay close attention to their sales strategy or risk getting drowned out in an increasingly saturated market.
Most major players of holiday sales opted to extend the campaign period, prompting others to do the same. Amazon moved the goalpost by pushing its Prime Day sale from July to October, just ahead of when retailers typically kick-off holiday sales. The American retailer Target quickly retaliated, announcing its “Deal Days” sale on the same dates as Amazon Prime Day, on top of extending Black Friday sales throughout November. A cascade of brands and retailers soon followed, ultimately leading to a longer sales period than we’ve had in recent years.
In a competitive landscape with retailers constantly trying to one-up each other, we’ve compiled tips and strategies to guide you through the holiday sales period, with a focus on tackling the surging online competition.
#1 Expand Online Presence
With travel restrictions and social distancing mandates still in place, e-commerce sales are expected to reach an all-time high this season. Consulting firm Deloitte forecasts an increase of 25% to 35% from November until January and reaching $196 billion in sales.
Major retailers are prepared for an influx of online shopping. Amazon hired 100,000 seasonal staff to improve order fulfilment efficiency in what the retailer expects to be the most demanding period for its supply chain and shipping services. Others need not go to this extent, but can still reap the opportunities of increased online traffic. To do this, we recommend brands:
- Join online marketplaces. Scaling online presence through an already established platform is a cost-effective way to increase exposure, but choose one that aligns with your own brand positioning.
- Build omnichannel capabilities. Leverage online channels to improve omnichannel prowess, creating a seamless customer experience.
- Explore new markets. Remarket low-demand or seasonal products in other countries, such as selling summer assortments in Australia.
- Optimise order fulfilment. Work out kinks in warehousing, set an effective returns policy, be transparent about delays and work closely with shipping partners to meet a high volume of orders.
- Provide various payment options. Capture customers with new payment services or instalment options, weighing the benefits and costs of offering them.
#2 Create a Safe and Streamlined Offline Experience
Without a doubt, safety is top of mind for consumers when shopping in a pandemic. Physical footfall is not expected to reach previous levels, especially with new lockdowns imposed in key markets such as the UK.
However, some consumers still prefer to perform their holiday shopping in-person if permitted. With the imminent delays of order shipment, customers will also value quick returns and exchanges that they can carry out themselves. It’s now in retailers’ best interest to project a safety-first image in stores so customers can shop comfortably.
To better support customers and increase safety, retailers should:
- Abide by standard operating procedures. Avoid breaking your local health protocols — this can include, wearing masks, providing hand sanitisers, limiting store occupants and/or contact tracing.
- Click and collect. Go omnichannel by allowing customers to shop online and pick up orders at their selected store. Exchanges and returns can be arranged this way too.
- Curbside returns and exchanges. Limit store traffic and streamline processes by setting up a returns and exchanges counter just outside the store.
- Shop By-Appointment. Offer a personalised experience while standardising day-to-day operations with a set number of customers for better efficiency.
- Contactless payment. Give customers peace of mind by adopting a no-cash policy and offering e-wallet options to reduce physical touchpoints.
#3 Prepare a Demand-Driven Assortment
The temptation to go big with assortment for the holidays can quickly take retailers down the path of having dead stock following the festive season. With travel and entertainment reduced to almost nil these coming holidays, there is a possibility of increased spending on fashion, but there is no way of knowing for sure in these uncertain times.
For this reason, retailers are erring on the side of caution. Business of Fashion reported that some department stores have lowered their order volume by up to 25% compared to previous years. A tight but on-demand assortment is the best strategy going forward, especially with the horrors of overstock woes from Spring still fresh in the minds of businesses.
To plan an assortment that maximises return, brands should:
- Reduce intake volume. Take a conservative approach with a compact assortment and highly calculated volumes to avoid inventory crisis.
- Optimise assortment. Reassort seasonal items into next season or other markets. Go through the aged inventory to spot items that can be remarketed for the holidays, such as party dresses.
- Track demand shifts. Keep track of market changes by regularly monitoring leading brands and competitors to spot opportunities and risks.
- Leverage new data sources. Fashion market insights tools like Omnilytics provide external data for demand visibility and trend validation.
- Invest in comfort dressing. Fail-safe categories such as loungewear and homewear still reign supreme and are safe bets for full price purchases.
#4 Approach Discounts Tactically
Discounts are the main driving force for holiday sales. If the fierce competition between major retailers like Amazon and Target are anything to go by, this season will see retailers try to one-up their competitors with deeper discounts. However, recent sales events showed that deep discounts did not lead to conversions as sales were dictated by consumer preferences than discount depth. Essentially, consumers would spend on products they really want even if the discounts are marginal.
Tactical discounting based on consumer demand is the best approach for the holidays. To achieve this strategic approach, businesses can:
- Avoid blanket discounts. Refrain from homogenising discount depths across categories to protect margins, assess each product based on their merit instead.
- Monitor sell-out performance. Impose deeper discounts on products only if they fail to sell with modest offers. Alternatively, refrain from discounting fast-sellers further.
- Keep track of product ageing. Adopt a staggered markdown strategy by discounting aged stock and slow-sellers first at more aggressive discount rates.
- Leverage best-sellers. Piggyback slow-sellers onto top-performing items with bundle offers. Sell an entire outfit this way by pairing products that are often purchased together.
- Limited time offer. Deploy aggressive markdowns for a limited time, either a 24-hour or 12-hour period to drive sales without eating too much into margins.
#5 Be Creative with Promotions and Marketing
A strong marketing strategy will help retailers cut through the noise, as every business will be flooding the online space with promotional content. This is the chance for you to get creative with marketing messaging and activities to drive engagement and keep consumers entertained.
Marketing and promotion strategies work best when brands:
- Curate holiday edits. Capitalise on the festivities and the holiday spirit with curated edits, incorporating pop culture elements such as The Grinch to stand out from the competition.
- Personalise promotions. Utilise internal data to develop newsletters and promotional emails that are tailored to each customer segment.
- Participate in Sales Events. Black Friday and Cyber Monday are some of the key holiday sales events retailers should not miss.
- Boost online engagement. Use social media to the full extent with regular content, interactive live streams and virtual events. Collaborate with relevant influencers to increase exposure.
- Get in the spirit of giving. Highlight charities in promotions and arrange giveaways, as the holidays are all about giving back.
While we are heading into uncharted territory for the holiday season, having a strong plan and contingencies ready will help retailers prepare for any possible disruptions. The strategies we shared were narrowed down with the goal of providing agility and efficiency to retailers in turbulent times so you can adjust your approach to any market shifts.
Omnilytics empower retailers with insights to accurately understand demand, build the right assortment, support online expansion and maximise margins with tactical discounting. Find out how you can start now by connecting with our retail experts.
You might also like
Top 5 Menswear Trends for Spring/Summer 2021
Like most things in this pandemic, the Spring/Summer 2021 menswear trends are not of the usual variety. The runway season itself was atypical, with major brands like Balenciaga and Gucci opting for virtual fashion shows to eliminate any risk of spreading Covid-19. Designers are embracing the new normal not just in the way they present […]
Product Matching: The Wings for the E-Commerce Boom
For the average customer, the entire retail world now fits into a 15” laptop or 5” smartphone. It is true you can find your preferred product for purchase across different e-commerce sites and portals. However have you ever stopped to wonder about the magic that happens behind the screen that allows you to be presented with different options for the same product, same model, and same variant?
How to Build a Demand-Led Pricing Model
In a consumer-driven landscape, a competitive pricing model is one that tallies with consumers’ value perceptions. The knee-jerk reaction during an economic downturn is to aggressively bring prices down to attract cash-strapped customers. However, the sudden drop in prices affects consumer perception, leading to reservations about product quality and long-term value. Adding to the situation, […]
The Spring/Summer Fashion Trends Taking 2021 by Storm
This year’s Spring/Summer fashion trends encapsulate current consumer sentiment in the new normal. With the lifestyle changes forced upon us by the Covid-19 pandemic, the trends that are making waves in the market now are far from those that did in past years. In uncharted territory, historical sales data is moot and the need for […]
The Top Three ROIs Areas of Data Driven Decision Making
Businesses who actively use data tools are propelled to find new and creative ways to reinvent their businesses and productise the resulting data as we will demonstrate in this article.