Retailers are enduring dynamic and challenging times as supply-chain disruption continues and consumer behaviour changes, both brought on by living in the Covid era.
So there is a lot riding on how retailers prepare for the upcoming sale season as they look to optimise sales and profit.
James Johnson, director of technology services & strategic accounts, APAC at Shopify, says it is critical for Australian retailers to optimise their product offers and sales channels to make the most of the sales season and seize the opportunity to end a difficult year on a high.
Shopping behaviour has evolved significantly over the past 14 months as Covid-related store closures and lockdowns accelerated the trend towards shopping across a broader range of channels, including apps and social media accounts, via smartphones, computers and tablets.
This digital disruption has fuelled growing customer expectations for convenience, personalisation, experience and safety, says Johnson. “Consumers increasingly want a seamless and consistent shopping experience across a growing number of offline and online touchpoints.
“The ongoing lockdowns, the fear and anxiety of being outside – or the contrasting excitement of finally being out of lockdown and economic uncertainty – will all likely influence the way consumers shop this sales season.”
He says consumers have seen the widely publicised warnings around supply-chain interruptions expected this peak sales season, and that will likely encourage them to start their shopping early. Additionally, retailers can expect promotional periods such as event days to be extended over a longer time frame as brands try to smooth out consumer demand.
“With recent lockdowns, consumers are rushing to online stores, apps, and social media to start their Christmas shopping,” says Johnson. “Consumers will expect a frictionless shopping experience and they will expect retailers to offer convenient options such as Click-and-Collect, Buy Now, Pay Later, flexible shipping, easy returns and multiple payment options to make shopping more convenient.”
Shopify urges merchants to take three key steps to ensure that not only are they adopting an omnichannel approach, but also so they become more nimble and adaptable to the current environment:
- Set up a contingency plan. Considering the well-documented shipping delays experienced during the pandemic – along with the announcements already made by Australia Post and other shipping providers – preparing for delays is vital.
- Offer gift cards. Sale events often lead to merchants selling out of stock faster than anticipated and missing out on transactions. By offering the option of digital gift cards, e-commerce brands can capture sales that would otherwise be lost to out-of-stocks, while giving them time (and money) to restock before the cards are redeemed. Digital gift cards can also drive last-minute gift purchases when shipping timelines make it hard to send a timely present.
- Determine your conversion rates. Every industry is different and if retailers know the average for their industry, it can help determine the effectiveness of their sales in peak and non-peak periods. A 1-per-cent difference can equate to millions of dollars in revenue. Readers can check out the Shopify Conversion Tool here.
As consumers heed the warning to start their Christmas shopping early to avoid disappointment caused by cross-border supply-chain disruption, the surge in online traffic will likely hit sooner than in previous years. This, in turn, could result in products being out of stock earlier than usual.
“Brands with high-demand products have the option to offer pre-orders and communicate delays with customers,” explains Johnson. “When executed well, this can even help to build up hype and anticipation as well as showing transparency with their customers around issues that may extend delivery waiting periods. Providing clear expectations around the delivery of online orders, and any changes or service disruptions is critical.”
Johnson says that while the holiday season provides opportunities to sell a large number of products over a short period of time, retailers must also optimise their checkout performance to cope with peak sales volumes.
Shopify recommends two key strategies retailers should use to optimise the peak sales season this year:
- Identify the top sales channel
To maximise the benefits of multichannel selling, identify which have been most lucrative for the business and double down on those during the holiday season.
The omnichannel shopping trend means consumers are increasingly shopping across multiple channels, so it is important for retailers to catch the consumers wherever they are, at any given point in time.
“Consumers are shopping whenever they like, wherever they like, and this omnichannel trend is here to stay,” says Johnson. “Therefore, it has become essential for local retailers to be more nimble and adaptable in order to deliver a frictionless shopping experience across all offline and online touchpoints in this ‘retail is everywhere’ future.”
Shopify has partnered with TikTok, Pinterest and Facebook to allow customers to shop directly from those social media apps, as well as with Google and Amazon. So retailers who are not already selling across multiple channels should consider a presence on them to ensure they are not missing out on sales opportunities.
“Social commerce is a rapidly growing trend in the online shopping space, and it’s going to drastically alter the shopping behaviour this year. Social media has turned into a hugely important driver of sales,” says Johnson.
According to We Are Social, Australians are now spending one out of three minutes that they are online on social media. That suggests that with only a relatively small investment, brands can reach massive new audiences on social media to build trust, engagement, and desirability of their products.
Meanwhile, he warns retailers that to ensure optimal performance, they need to be aware of longer lead times for some sales channels. For example, Google’s algorithm takes about 15 days to learn about an online store, and then optimise performance so the right products are shown to the right shoppers. For this reason, Shopify recommends installing and setting up a Google channel as early as possible.
- Be clear on inventory decisions
Retailers who rely on suppliers to source or manufacture products need to decide early on what products they will promote for the sale season. “Not only are we expecting disruptions to supply chains and logistics this year, but suppliers across the board have been stretched since the pandemic and need as much leeway as possible to get products ready on time,” says Johnson.
“We recommend that retailers leverage existing tools to accurately forecast demand and identify what products to replenish for sales season. On Shopify, a great place to start is with the Sales by Product report, filtered by last year’s data so that merchants can see which products typically sell well during the holiday season.
Download The Shopify Peak Sales Season Checklist and learn more about how to prepare for the upcoming sales season.