eCommerce Peak Season Is Here!
This 2021 holiday season is a much anticipated time for consumers and eCommerce brands alike and sellers are in full planning mode for the annual Amazon spike.
Make 2021 Holiday Season your Brand’s most profitable, ever
With over 15 years working with numerous big Brands, Luzern eCommerce shares its top tips and proven strategies that drive more online conversions during what will be the biggest shopping season of the year.
1. Amazon – Get ready for the rush
Amazon will continue to be the battleground for eCommerce brands. In previous years, many brands were hesitant to have their products on Amazon, preferring to drive consumers to their own branded online store. However, this is rapidly changing as brands witnessed shoppers flocking to Amazon when in lock down and understand that they need to be on Amazon to meet their buyers on their marketplace of choice. The shift in buyer behaviour and the transferal to online shopping is driving brands to update their Amazon sales strategies, and upscale their digital commerce operations in time for the seasonal sales rush.
Amazon will continue to benefit from the surge in online shopping into 2022 and beyond. For brands to benefit from the same growth, they need to optimise their offerings on what will become an increasingly important sales channel. In addition, as Amazon tightens certain aspects of their service, such as customer-seller messages and product reviews, brands will need a solid strategy to overcome any obstacles.
2. Focus on Profit, not Price tags
As brands seek to increase sales via online marketplaces, in particular Amazon, they could find themselves facing extraordinary margin pressure when selling directly. Amazon will, of course, seek to maximise their margins and push what is selling best. This will have a trickle-down effect, as they will inform brands that better prices are needed, otherwise they will stop ordering some or all of their products. For the brand, this could equate to millions in lost revenue.
When a brand sells direct to Amazon (known as 1P), Amazon acts as a retailer and can implement price adjustments independently. Alternatively, brands could opt for a hybrid approach, where the business combines the 1P sales model with selling their products on Amazon via third-party sellers (3P). This model provides brands with more price autonomy over their products.
This holiday season and into 2022, dynamic pricing will become more prevalent. By collating and analysing competitor pricing stats, brands will be able to implement dynamic pricing strategies to maximise sales and profitability.
3. Flawless Fulfilment and Delivery are key
As the number of people that go online to shop continues to rise, ‘last mile’ delivery services will equally thrive. Unfortunately, there will be casualties, with some Brands likely to be unprepared. Many brands will however, convert to fulfilment hubs and distribution centres for ‘last mile’ deliveries. This provides customers and brands with more flexibility when it comes to options for deliveries, pick-ups and returns.
To meet customer demands, it makes sense to deploy third-party logistics and drop-shipping. By using drop-shipping, companies won’t have to manage inventory, instead, the brand sells the product and passes the sales order to a third-party for fulfilment and shipment.
With the online marketplace providing consumers with virtually everything they need, the shopping habits formed during the pandemic will continue through the holiday season and the foreseeable future. It’s vital to ensure a frictionless delivery and return experience for your customers.
4. Be Smart with Your Ad Spend
During Peak season investment in advertising by most Brands will jump. Many are happy to increase this investment as they see return on spend increase. However, if you increase budgets to drive traffic it makes sense to also be smart about bottom of the funnel tactics. For example, if your products are selling on Amazon, be sure to spend money carefully at the SKU level to drive conversions.
5. Focus on Average Order Value
Having a high average order value can offset your advertising costs and create a larger profit margins, this is a good strategy and gives Brands an alternative to offering blanket discounts.
6. Add New Product Offerings and/or Unique Bundles based on Buyer Behaviour
It’s important Brands understand who their customers are, and how they like to shop. You can use this shopper and customer behaviour data to understand their digital footprint and what that means for your Brand and selling strategy, especially around the holiday season.
Based on these insights Brands can offer new products and unique bundles.
Giving the customer what they want and at an attractive price point will always pique their curiosity.
You can add new exclusive bundles such as Black Friday or any other dedicated day offer to boost that special day’s sales. Advertising the fact that it’s a “Black Friday Exclusive” helps!
7. Create Quality Content & Improve Listings
Quality of content and optimisation of listings are both critical in building brand equity and loyalty. The quality of imagery and copy, from the title to the bullet-points, not only persuade Amazon’s ranking algorithms to maximise the product’s visibility, but having attracted shoppers, help convert them into buyers. Video can be particularly effective for creating memorable brand and product awareness, and as a conversion tool.
Comprehensive product and keyword research and full competitor landscape analysis help in developing persuasive sales, style and backend keywords and Amazon platinum keywords. These all assist in optimising listings in Amazon’s search results.
8. No Stock = No Sales: Improve your assortment strategy on Amazon to avoid list suppression and stock outs
Clearly, pricing and branding considerations only become relevant when stock is available and visible. With more than 60% of product searches beginning on Amazon itself, brands and retailers are unlikely to reach sales targets if customers can’t find their products on Amazon this holiday season.
Removal of a product from the platform can have many causes including inappropriate listing information or inadequate photography. Any product is at risk if Amazon has too much inventory or if it proves financially unviable. Inexpensive consumer packaged goods (CPG) are just as susceptible as heavy or bulky slow turnover items, and Amazon will not reorder CRaP items.
Stock-outs are the other major threat to SKU representation. They occur when Amazon simply does not order sufficient inventory, leaving brands in danger of struggling to meet customer demand. No stock equals no sales.
Look Ahead to 2022 with Channel Optimizer
Amazon will continue to dominate the industry into 2022 and brands are under huge pressure to meet customer expectations and drive conversions this quarter whilst planning for the year ahead.
Luzern eCommerce Channel Optimizer is a managed eCommerce platform that optimizes sales, margins and inventory across channels and geographies.
Using our deep expertise, coupled with our technology, we can extend your eCommerce capabilities, to attract and convert buyers, boost margins and improve customers’ experience of your brand.
If you’d like to speak with one of our marketplace experts to see first-hand how we’ve helped leading brands drive Amazon sales, profitably please feel free to get in touch.