The holiday season is nearly upon us. The good news: Retail experts expect eCommerce sales to hit $933 billion this year, a healthy spike of 18% YOY.1 The really good news? According to the National Retail Federation (NRF), total retail sales growth will hit nearly $4.5 trillion in 2021, an increase of somewhere between 10.5% and 13.5% from 2020.2
While these optimistic stats put wind behind the retail industry’s sails as it heads into the holiday shopping season, there are a few concerns related to the still-lingering pandemic.
For eCommerce businesses that want to make the most of year-end sales, here are a few things to consider as you enter Holiday 2021:
1. Get your supply chain ducks in a row.
Depending on which media sources you pay attention to, supply chain will either be the demise of Holiday 2021, or it will have minimal impact. The more realistic answer is somewhere in between. True, there have been unprecedented and growing supply chain headaches with shipping shortages, port snarls, and insufficient trucking capacity that retailers have been coping with all fall. Add to this, online shopping is still going strong (with no end in sight), and eCommerce businesses need to ensure they have the literal goods to handle the seasonal surge in demand. Those retailers that prepared for product shortages (with methods such as more FOB Asia freight, running their own shipping earlier, and air freight), delayed shipping times, and increases in freight charges well in advance (e.g., Amazon) will be in a good position to handle this peak shopping season.
2. Offer shoppers promotions early in the season (and potentially at shallower discounts).
This year’s upward trend of online shopping is both a blessing and a curse for retailers: It enables businesses to reach more customers in more places around the world, which results in selling more products. But today’s online shoppers are savvy. They compare prices, look for deals, and purchase accordingly. That’s why offering seasonal promotions early (they should already be in the works) will be key to capturing shoppers at the beginning of the holiday shopping season. This is where the typically healthy dose of public competitive intelligence – whether through scraping or observation – can come in handy. Understanding what other retailers are offering consumers will help your retail business make strategic decisions around digital marketing, social media, SEO, and more that can collectively help maximize sales. Earlier promotions will be balanced, however, with potentially shallower promotions, given the inventory shortages mentioned above. With less excess inventory to move, some retailers may need to be stingier on their depth of promotions.
3. Get your eCommerce backend in tip-top shape.
With the oncoming rush of shopper demand, it’s critical to make sure your retail website and payment processing technologies are prepared for this season’s heavier than usual traffic. Friction-free shopping and payments are always central to conversion rates, particularly since high rates of shopping cart abandonment and checkout abandonment are already a struggle. The usual spike in competition this time of year makes prioritizing the optimization of your digital operations common sense. It will keep your business from losing customers that are ready to pull the proverbial trigger, but may ditch if there are technical issues related to your user and/or payment experience. Additionally, with inventory shortages, ensure your engines are able to cross-recommend like products for those that are out of stocks, further preventing abandonment.
We, alongside consumers, are impressed with how Retail has continuously adapted to dramatically shifting demands during COVID-19. It makes optimistic projections around this year’s overall sales outcome, in particular eCommerce holiday sales, a likelihood.
Is your businesses pursuing significant and sustainable profitability?
HighPoint Associates has assisted companies in developing lean, hybrid internal/external functions for deriving competitive inputs to strategy decision-making. These inputs are one part of our quickly identifying top strategic priorities that will support your growth and financial goals, while guiding your corporate, business unit, or go-to-market strategy with an objective, rigorously intentional, and accelerated approach. Contact us to start the conversation.