From supply chain struggles and delayed shipments to empty shelves and increasing inflation, retailers are yet again facing a myriad of struggles this holiday season. With the Black Friday/Cyber Monday weekend just months away, Wholesale Central spoke with experts from all over the industry so that you can be as prepared as possible for the shopping surge.
The Evolving Holiday Shopping Period
Consumer behavior continues to settle and adapt from the radically changed retail environment in 2020, and to a lesser extent in 2021, but enough time has passed now for the newer online shoppers to become more comfortable with where and how they shop, according to Matthew Furneaux, Director of Location Intelligence at Loqate. Retailers that continue to learn how these consumers are adapting their behaviors are likely to enjoy greater loyalty and wallet share.
“The big difference in 2022 is that retail inflation is cutting across everything from home and vehicle fuel, to practically every segment of the economy, with wage inflation nowhere close to keeping pace with price rises,” Furneaux said. “As such, all consumers are affected to an extent by these factors, so retailers during this Golden Quarter may see less spend across the board and will need to maintain loyalty of the customers they already have through personalization, relevant offers, and a seamless shopping experience.”
How Can Retailers Be Prepared?
Our sources broke down everything that brands need in order to be fully prepared for the Black Friday/Cyber Monday shopping weekend:
- Get Shoppers Excited with Early Access Waitlists
- Make Room for Overstock
- Plan Your Marketing Well in Advance
- Utilize Successful SMS Marketing Tactics
- What Shoppers Are Looking For in Brands
- Two Words: Simple and Seamless
- Think About Implementing Buy Now, Pay Later Options
Get Shoppers Excited with Early Access Waitlists
A great way to maximize revenue during big holiday sale events such as the Black Friday/Cyber Monday period is to build early access waitlists via email and SMS for your best customers, according to Ryan Turner, Founder of Ecommerce Intelligence. This means asking customers to actively self-select and tell you they want access before anyone else. These lists always perform incredibly well across all key metrics.
The easiest version of this to implement is inviting current customers to sign up to your waitlist to access the sale a day or two early via a simple email or SMS landing page on your website. Give them a special coupon that is valid just for the early access period, and consider a slightly better offer than what will be available for the primary sale, if possible.
Additionally, let your VIP customers know they will automatically be getting this benefit in the lead up to Black Friday/Cyber Monday. This is great for building anticipation, increasing brand loyalty, and introducing a little fear of missing out. Although the early access promotion lists will be relatively small, it is not unusual to see them as the top overall revenue generators after the entire sale period is finished.
Make Room for Overstock
Smart retailers are getting a leg up on ongoing supply chain bottlenecks by gearing up for Black Friday now, which means a lot of new products are getting shipped in, according to James Burati, Chief Sales Office at 1-800-PACK-RAT. Between the mountains of new inventory, holiday decorations, and existing inventory, there is no room left for overstock.
Retailers should not have to choose between running out of new products or space in the back room — there is an alternative option. Burati says that portable storage containers are the solution, enabling brands to stock up on inventory without overcrowding the store before the holidays. With this extra space, not only can businesses keep everyday bestsellers available for non-holiday shoppers, but also rest assured that excess inventory items are safe under lock and key on site.
“American Express March 2022 Small Business Recovery Report showed that over half (53%) of small businesses expected their business to be impacted by supply chain obstacles throughout this year and beyond,” Brett Sussman, Vice President Head of Sales & Marketing at Kabbage from American Express, said. “Twenty-four percent of the surveyed small businesses planned to use funding to cover costs incurred from supply chain shortages. Access to funding is key to ensure inventory can be accessed when needed, but planning ahead is essential, too. Ordering needed inventory should already be in motion to make sure it is available and can arrive in time for the holiday shopping season. From a cashflow standpoint, business owners should consider checking in with their suppliers to see if a better deal can be provided.”
Plan Your Marketing Well in Advance
Joshua Uebergang, CEO of Digital Darts, offers some tips for retailers on how they can prepare their marketing leading up to the Black Friday/Cyber Monday weekend:
Make your offer simple
Keep it at a flat percent or dollars-off, free delivery, free gift, or buy-one-get-one free.
Warm your lists
If you do not already email your subscribers at least once a week, you need to warm your lists up now. Tell customers what is coming and get them to click a link to be tagged for such incoming emails. The last thing you want to do is land in an inbox cold and have shoppers unaware of who you are, maybe because they purchased something from you two years ago and you have not contacted them since.
Send at least one pre-launch email
But two is ideal. You can share a story about your brand or a recent news story that segues into a product feature. This has been the most effective in telling customers directly to not buy while spelling out what is to come. Skip the vagueness and instead, tell subscribers what the sale is, when it is, and what they can do. Make them ready.
Around Saturday or Sunday, share how crazy it has been between stock levels and purchasing partners. Publicly share answers to any questions, and social media stories work great at this time.
Really consider how your subject lines fit amidst other emails in someone’s inbox. Brands that do email poorly will be emailing for the first time in weeks. Everyone’s inboxes will be peppered with “30% off Black Friday!” subject lines. Contrast that to “Sorry, Sold Out” or “I Can’t Believe I’m Doing This.”
Urgency and scarcity are your friends — use them to attract shoppers.
Do a post-Black Friday/Cyber Monday analysis
Look at your profit and loss statement to see where you sit so you have some solid figures to run off for next year. There is always room for improvement.
Utilize Successful SMS Marketing Tactics
SMS campaigns are an effective method to engage customers, boasting an average read rate of 97 percent just 15 minutes after delivery. However, for retailers to make the most of their SMS campaigns and to keep consumers engaged, they must first earn a spot in their customers’ inboxes.
According to David Chinn, CRO and Co-Founder of Lexer, before retailers and brands begin reaching customers via SMS, they need to urge opt-in to their subscriber list, which means they will need to get started well before the holiday season starts. To drive sign-ups, provide ample incentives for customers to opt-in. This does not always have to be a promotion — you can simply urge customers to subscribe through exclusive product releases, access to relevant content, loyalty rewards updates, or even entry into a giveaway.
To generate the best results, retailers need to analyze the data of their SMS customers and create segments of those who deliver the most value. Then, target this high-value segment with promotions relevant to their purchase history and interactions. Brands can take this promotional strategy one step further by analyzing the products and product categories their SMS shoppers purchased in the previous holiday season. With this insight, retailers and brands can offer their customers discounts on the products they purchased last year, and provide them with supplemental products that match their initial purchase to keep their customers engaged and subscribed.
What Shoppers Are Looking For in Brands
When developing your sales and marketing leading up to Black Friday and Cyber Monday, NielsenIQ conducted a survey in which consumers shared what their triggers are for brand preferences and their purchasing behaviors. The report explores the product attributes that appeal to different customer groups and what retailers must do in order to reach these shoppers:
- Transparency: 72% of shoppers surveyed said that transparency from brands is “extremely important” or “important.”
- Sustainability: 30% of customers use the internet to learn about how ingredients are sourced, while 20% research a company’s sustainability practices.
- Plastic-Free: Sales of products with a “plastic-free” attribute increased by 96% in 2021 compared to two years prior.
- Eco-Friendly: Sales of merchandise using “eco-friendly packaging” increased by 21% for the same period.
- Recyclable: Sales of items using the “recyclable” attribute surpassed $231 billion in 2021, up from $198 billion in 2019.
- Cruelty-Free: Products featuring cruelty-free claims generated nearly $3 billion in sales in 2021, up from $2.5 billion in 2020.
“This holiday season we can expect consumers to be more fickle with their spending due to
current, and likely extended, economic uncertainty which will dramatically impact retailers. In
fact, consumers are expected to spend somewhere in the range of 30% – 40% less this holiday
season. So, if retailers want their consumers to return when conditions improve, it will be
necessary to build memorable customer experiences across every touch point in the buying
experience,” Mike Welsh, Chief Creative Officer at Mobiquity, said.
Two Words: Simple and Seamless
When it comes to shopping, both Millennials and Gen Z will deliberately avoid brands that are not making their customer experiences as seamless as possible, according to “Behind the Scenes with Today’s Gen Z and Millennial Shopper Report” from parcelLab and YouGov.
“Gen Z and Millennials are looking for the easiest shopping experience, both in-store and online,” Tobias Buxhoidt, Founder and CEO of parcelLab, said in a release sent to Wholesale Central. “Retailers need to connect and listen to their customers’ needs, as these generations will not hesitate to shop at a competitor if the buying process, both purchasing and returns, is too difficult or costly.”
Free returns are the number one pain point for shoppers, with 35 percent reporting having to pay shipping for a return as a turn off. Other barriers included no free shipping (22%) and a lack of communication during the returns process (19%). Returns matter to this audience, and understanding what is most important to them throughout the shopping experience can help educate retailers.
While these generations are, in large part, digital natives, they are not online shopping using the newest technologies. In fact, more than two-in-five respondents (42%) would opt for PayPal if a brand/retailer were to offer financing choices for purchasing, and 29 percent prefer the use of mobile web browsers as their avenue to shop over third-party shopping apps (6%) and retailer-specific apps (17%). Although Gen Z and Millennials are often seen as ‘tech-savvy,’ they prefer to use the simplest route when it comes to online shopping.
Think About Implementing Buy Now, Pay Later Options
Buy now, pay later (BNPL) has been growing in popularity in recent years because of how consumers can purchase an item and simply pay off the full amount at a later time. With so many BNPL providers out there, it is becoming easier for retailers to include this offering into their physical and virtual storefronts.
“I see continued growth for BNPL in the coming years as more retail players enter the game, but especially as consumers look for more budget-friendly, transparent, and predictable options to make purchases other than credit cards,” Guarav Sethi, Chief Strategy and Product Officer for Citizens Pay, said. “Inflation and rising prices are forcing consumers to be more careful about their spending and how much interest they are paying with traditional credit cards. Young consumers in particular feel the most strain from increasing prices, and they are moving toward BNPL solutions in the largest numbers.”
Custom BNPL options are ideal for retailers who are looking for deeper relationships and loyalty with their customers, according to Sethi. A complete, embedded finance solution creates the opportunity for retailers to build new product categories, like subscriptions and bundles, and provides support from lenders with the data, experience, and stability to serve them and their customers through various economic cycles. Banks are already in the business of consumer financing and are equipped to help brands create bespoke solutions.
Let this guide be your checklist when preparing for Black Friday and Cyber Monday, and be sure to save this page for next year!