As we enter the second half of 2023, focus on the fourth quarter is beginning to intensify.
The holiday season is coming quickly, and inadequate planning — or misplaced priorities — will cost sales.
However, don’t launch into seasonal planning mode without addressing the three most common challenges brands and retailers face in the run up to busy holiday season:
- Pricing and profitability
- Marketing and advertising
- Inventory management
Taking concentrated actions in these three areas now will yield results in the final weeks of the year. And we’re providing our recommendations, based on our decades of innovation in e-commerce, to help you get started.
Pricing and Profitability
Preparing to meet the expectations of increasingly savvy and selective consumers is no small feat, especially this year when price sensitivity is likely to be high. Shoppers now regularly expect free shipping… and free returns. They want to feel as though they are getting a bargain, but also that they are purchasing a high quality product. Unsatisfied or frustrated consumers who return products and/or leave poor reviews can generate a ripple effect on profitability.
Rising return rates coupled with cautious consumer spending habits have begun chipping away at gains in all corners of e-commerce. Marketplace sellers especially are feeling the pinch.
How can you reduce returns and protect profit margins? Simply slashing prices may not drive up sales to desired levels and will affect profitability. Developing keen pricing strategies based on intelligent data points can provide necessary balance in meeting pricing and profitability goals.
First, we recommend ensuring all your product detail pages have as much information as possible, including:
- Color description
- Source materials
- Typical and suggested uses for the product
- Clear images that present the product from all angles
Optimized content that consistently appears across all your selling channels builds confidence in your product before purchase and reduces the chances it’ll be sent back. In addition, setting up dynamic pricing strategies can maximize your profit margins while keeping you in compliance with any pricing agreements you have in place.
If you’re looking to drive growth through new channels, product or markets this holiday season striking the right balance in pricing and profitability is critical to success. How can you set a healthy pricing momentum when planning expansions? To preserve your efforts to maintain stable profit margins, we recommend that you:
- Identify and focus on marketplaces with lower return rates
- Consider a hybrid selling approach that includes both first party and third party
- Look at costs associated with each selling model, such as listing, returns, logisitics and storage fees — these can add up quickly and affect profitability
Marketing and Advertising
Consumers are inundated with ads and promotions in the lead up to the holidays. Although advertising is essential at this time of year, it’s incredibly difficult to stand out from the crowd based on traditional tactics alone.
The key lies in finding ready-to-buy shoppers who are already searching for and interested in your products. A centralized approach to digital marketing can yield cross-channel insights into finding those consumers through paid search and shopping. And retail media, when strategically implemented, can yield tremendous benefits in meeting ROAS goals and boosting visibility and sales.
How can you efficiently use retail media to your greatest advantage? We recommend focusing on five elements in your campaigns:
- Optimizing content
- Smart audience targeting
- Segmenting your catalogue
- Automating your campaign
- Testing (and more testing!)
We’ve found the most successful retail media endeavors harvest keywords to strengthen search results, employ brand protection tactics, acquire new customers and, ultimately, conquer the competition. And managing retail media campaigns from one centralized platform that is monitoring marketplace listings, inventory levels and other digital marketing campaigns can amplify efficiency (for example, you avoid wasting ad spend on products that have gone out of stock).
New challenges are appearing for brands and retailers in inventory management. Storage costs keep rising, ongoing economic uncertainties and inflation-related pressures on consumers’ wallets have led to inventory challenges for many sellers.
Tackling the first two challenges (pricing/profitability and marketing/advertising) head-on can provide some relief in the struggle to move products. In addition, we recommend developing:
- Techniques to avoid excess inventory (we have suggestions for brands and retailers)
- Strong product selection strategies that, among other goals, ensure poorly performing products are removed
- Automation and procedures that focus on synchronizing and maintaining inventory levels across channels
- Action plans to execute when excess inventory thresholds are crossed
If you’re looking for professional support to sharpen your strategies before the busy festive season arrives, the experts at ChannelAdvisor would love to help! Our Managed Services team works with brands and retailers to plan for seasonal variations and challenges, expand into new channels, streamline operations and provide advice and guidance on ensuring profitability. Contact us to learn more.
2023 Festive Prep E-Commerce Guide
In this eBook, we look at the three most common challenges during the busy festive season and provide you with useful tips to ensure your Q4 is a success.Download your free copy now