‘Tis the season to prepare for the onslaught of holiday shopping activity. This year, the annual holiday prep routine feels a little bit familiar … but much remains uncertain. At minimum, the recent rapid acceleration of e-commerce has drastically altered the landscape in Q4. Brands and retailers face extraordinary competition. Fulfillment and delivery challenges persist. And just a few clicks into their shopping journey, consumers enter a chaotic and noisy environment. In the midst of so much upheaval, how can you break through the turmoil to entice buyers and encourage sales?
In this two-part series, we’ll discuss practical, smart steps you should take now to lay the foundation for success in the coming months and future holiday seasons. In this first installment, we’ll discuss pricing, budgets and promotions.
Determine Your Pricing Strategy
To stay competitive in pricing and increase your chance to win the buy box during the holiday season, an automated repricing solution provides significant advantages — and saves you enormous amounts of time.
To begin, understand your goals and set margins to continually maximize your profit while remaining a visible and viable option for buyers considering your products. Is winning the buy box (on Amazon, eBay or Walmart) your top priority? Then use an algorithmic repricer to continually make adjustments to push you toward that achievement. Do you need to reduce prices to move inventory, or extract higher margins on your top sellers? Then consider a velocity-based approach that changes prices based specifically on your goals and your products.
Take a calendar-based approach and schedule your strike-through pricing ahead of time. Automate those changes as much as possible.
Most importantly, you’ll want to enable price parity in your automated repricer to avoid conflicts in pricing among your various sales channels. Neglecting this critical area can result in marketplaces pulling your listings and can damage your seller rating and reputation.
ChannelAdvisor’s Pricing Console is a great place to begin to analyze all of your opportunities and the best options for your circumstances as you build your strategy to tackle the complex world of pricing in the coming weeks.
Set Your Budget and (Mostly) Stick to It
Many of your buyers have planned how much they planned to spend on holiday gifts this year. You’ve likely set spending limits as a part of your own gift-giving activity. Budgeting is simply a phenomenon of the season — and in that way, setting aside a clear holiday advertising budget is no different.
However, in other aspects, setting limits and managing an advertising budget during Q4 can differ radically from other versions of budgeting. In addition to determining what types of campaigns would most appeal to your target buyers, which ad types you might qualify for on any particular marketplace you’re selling on and how much advertising to do at various points in the holiday season — you have to determine how much money to allocate to each element within the big picture. It’s incredibly complex, especially for sellers managing multiple channels. While there’s no one answer or plan that will fit most businesses, you can carve a path that maximizes your ROAS on any budget level. Your advertising plan and spending should change each and every year to be tailored to your current business needs, goals and customer demographic.
However, here are a few tips to help your investments go further:
- Scale your budget alongside total channel sales during the holiday season.
- Plan your budget at both the weekly and monthly level.
- For Amazon Advertising, confirm budget and performance changes during peak holiday shopping days.
- Do not underestimate the power of October. Many shoppers are making purchases early in the season. Don’t underallocate your budget before Thanksgiving.
- Remember the majority of sales happen outside Cyber Five, so budget accordingly.
- Do not go dark from Christmas to New Year’s. Think gift cards. Returns. The ingrained habit of looking for a good deal. People are still shopping after they’ve bought and exchanged presents.
- If you want to pay for site placement, make sure the placement is relevant to the category you sell in.
Tailor Your Advertising & Promotions Plans
First and foremost, before you establish and schedule your advertising and promotions for the season, ensure that you not only have a budget to spend for advertising, but the inventory available to be able to spend. (Spoiler alert: We’ll discuss inventory planning, along with other types of monitoring and reporting, in our second installment of this series.)
Your advertising strategy will be unique to your business and its goals. As you develop your strategy and map out your campaigns, here are a few questions to help you set a clear direction and goals:
- What are the top goals you’d like to accomplish during the quarter?
- What is the status of your content? Before you finalize your advertising strategy and launch any campaigns, review the content in your listings, from titles to text to images. Is all of it optimized for holiday shoppers?
- Are you leveraging all ad types and targeting options? Have you fallen into a rut without fully examining ROAS, the latest perspectives of your most likely buyers and any new opportunities?
- What was the success rate of the promotions you ran last year? Have circumstances changed compared to last year — and if so, how might that affect your approach this year?
For your planned promotions, set clear dates for both launch and closure. Create a promotional calendar and share it with your marketplace category manager. Act now to review deadlines set by the marketplaces you sell on for deal submissions — they may be earlier than you think.
In the next article in this series, we’ll talk about reporting and how it can ease your workload in Q4, especially in the areas of inventory management, marketplace requirements, responses to customer feedback and more. If you haven’t already subscribed to our blog, be sure to subscribe now to receive notification when it’s published.
Looking for more ideas to succeed this holiday season? View our recent on-demand webinar, Strengthening Your Holiday Strategy with a Buyer-Centric Approach.