Time flies fast in the world of ecommerce, and just as Summer ends it’s time to think about Black Friday/Cyber Monday. Last year we published an article about the issues facing merchants in the run up to BFCM, as with such a turbulent year globally it was increasingly difficult to predict. This year, we’re still seeing the impact of the pandemic but we also have a better understanding of the issues that lie ahead for merchants with shipping and supply chain.
Let’s take a look at the major issues facing merchants heading into this year’s holiday shopping season, and how to approach your BFCM strategy.
What are the issues affecting BFCM this year?
While 2020 was certainly unpredictable with constantly changing circumstances, many issues have carried on through to 2021. Around the world, restrictions around Covid19 are still changing every day with many countries remaining closed off to tourism. Each country around the world is also still dealing with local restrictions, changing as needed as cases and variants grow. It will therefore still be difficult for businesses and customers to plan what they’ll do with holiday shopping, with uncertainty as to what restrictions will still be or put into place. If local restrictions increase, there will be less in-store shopping, and if there are fewer it may mean an increase in foot traffic. Attitudes around safety and shopping in-store are also constantly changing, as new variants appear and outbreaks occur.
Supply chain issues
Whether it’s waiting on stock or replenishing cardboard boxes for shipping, there are ongoing supply chain issues affecting a large number of businesses globally. Factories being forced to shut down due to covid outbreaks, port congestion, and a lack of staff in the logistics sector are just some of the causes.
These delays result in shortages and are already causing major issues for businesses, with big box retailers such buying in additional holiday stock as early as possible and some even chartering extra air-freight to ensure supply levels.
The impact of this will be felt by businesses first, followed closely by their customers who may not be able to get the products they want in time for the holidays. With such a tight window between Black Friday/Cyber Monday and the holidays themselves, this could pose a serious issue.
Pressure on global logistics
Pressure on global logistics is definitely not ideal when it comes to holiday shopping. As we mentioned previously that small window between BFCM and the holidays doesn’t leave a huge margin for error in the best of times. While the supply chain is struggling to keep up with demand, the logistics of actually getting an order to a customer has also significantly slowed while the price goes up. With a slow down in the supply chain, it makes the cost of getting goods into warehouses on time that much higher and many retailers have no choice but to pass that additional cost on to their customers.
Throughout the last few years, UK and EU politicians have been debating and negotiating what trading with the UK outside the EU would look like. As of January this year, the has UK officially left the EU, and with it have come some major changes to trade. By leaving the customs union, it is now more complicated to both import and export goods in the UK, with added paperwork, customs restrictions, and taxes causing major delays. The UK is already seeing stock shortages in retail and grocery due to increased complication with customs and logistics, along with huge spikes in shipping costs to the EU.
Many consumers in the UK are already feeling the effects of Brexit on the supply chain, with recent reports suggesting that as many as 28% of UK consumers have started shopping for the holidays and 48% saying they plan to start before the end of October.
Growing digital expectations
As restrictions tightened and eased throughout last year, everyone became more engaged with ecommerce and digital experiences. Whether that was to keep in contact with their friends and family, take part in online experiences, or just have daily essentials shipped to their home. The more contact people have with these experiences, the higher their expectations have become. Brands are now investing more in omnichannel and online-to-offline, in an attempt to make the purchasing process more flexible, fluid, and engaging. This means every merchant needs to catch up, and further develop their customer experience in order to meet and exceed those expectations.
Huge increase in market competition
Not only is there an increase in customer expectations, but also in competition within the ecommerce space. Many brands with a traditional retail route-to-market or approach were forced to develop an ecommerce offering in order to maintain their audience and market share. For those who had both brick-and-mortar and ecommerce storefronts, this put additional emphasis on developing customer experience as well as more budget behind advertising and promotion. As restrictions eased, these brands then continued to develop their online offering making the space more crowded, especially with big names, as we now approach BFCM 2021.
How to approach your BFCM strategy
Be prepared - work with partners and plan inventory
The outlook for global supply chain and logistics may be difficult, but it isn’t impossible with enough forward planning and collaboration. Work with your suppliers and courier partners to get a full picture of what the next few months will look like along with any expected delays and additional costs. Doing so as soon as possible will allow you to properly plan out your inventory, shipping costs and times, and communication with customers in the run up to BFCM and the holidays.
Once you know what to roughly expect in the coming months, look at your projected inventory levels for the holidays along with your plans for BFCM promotions and any additional campaigns you have planned. Use your store data from previous years to forecast demand over BFCM weekend, and then consider what stock you’ll allocate to these promotional periods to ensure you won’t run out of stock for the remainder of the holiday season. For example if you project to have 100 items in inventory of your best-selling product, you could allocate 50 items to BFCM weekend and the other 50 to the rest of the holidays. In the short-term you’ll “sell out” but then have enough inventory to replenish stock levels for customers who miss out on deals, or who simply didn’t plan to finish shopping till later in the season. Stock availability is huge for customers, with 43% of customers citing it as one their most important factors for deciding who to purchase from.
Communicate more with customers
The best way to meet customer expectations is to properly manage them. Developing a really strong customer experience and managing those expectations relies on communication. Increased costs and longer shipping times won’t go under your customers’ radar, especially around the holidays when they’re even more concerned with their orders arriving in time. With proper communication you can mitigate the amount of stress and frustration they may feel when placing an order.
As soon as you know what shipping times and costs will look like, it’s important to send out emails to customers as well as having an up-to-date FAQ. Send emails specifically about holiday shipping - what to expect cost wise, and how long different shipping methods will take. If you expect your courier will be impacted by logistics delays, let your customers know this in advance of BFCM. That way they won’t be taken by surprise if their order takes longer than average to arrive.
Ensure you keep in frequent contact with customers who order on BFCM and during the holiday season:
Let them know upon ordering how long you expect it to take for the order to leave your warehouse, and then what estimated shipping times are from your courier.
Include details of how to get in touch with your team if there are any issues, as well as details of your returns process and policy. This will demonstrate to your customers that you don’t just care about getting a sale, you care about their satisfaction and if their order doesn’t arrive in time that you want it to be clear and easy how to return it.
- As soon as your team is made aware of any delays in shipping, send an update to customers affected.
Frequent and thorough communication can mitigate and alleviate customers of any frustration and worry they have around their order. You’ll be ensuring your customers enter their purchases will full knowledge of the situation around shipping and fulfillment, so that they aren’t later surprised, annoyed, or worried.
Compete on experience, not the deepest discounts
With higher competition in the ecommerce market and big players investing more, it may feel like it’s impossible to compete for BFCM sales. While you may not be able to compete on discounting, you can still compete on experience. Shoppers want to buy from independent brands - more than 44 million consumers globally purchased from independent and direct-to-consumer brands powered by Shopify in 2020, a 50% increase from 2019. This already gives independent brands a competitive advantage, so it’s all about focusing on how to make the customer experience as memorable as possible.
While you can’t completely overhaul your experience so close to BFCM, there are still areas you can improve on and tweak in the weeks to come:
Customer service - 56% of customers won’t shop with a brand again after a poor customer service experience, so it’s important that you make a good impression especially during the holidays. Find gaps in your customer service strategy that you can improve ahead of BFCM, such as improving response times by implementing automated messaging, AI chatbots, and self-service options.
Website messaging - Include BFCM details on key landing pages throughout your site as well as easy links for people to navigate to your deals and any information they may want to know ahead of purchasing e.g. shipping costs and times.
Quick checkout options - During BFCM, people want to snap up deals as fast as possible. Therefore they want brands to make it easy for them to get to checkout so they don’t miss out.
Product pages - What else could you add to improve your product pages for customers? Think videos, additional context photos, reviews, etc.
Communication - Leading on from a previous point, communication is the key to a great customer experience. Use automated email and SMS flows to send reminders for BFCM sales going live, as well as additional information and updates once a customer has placed an order.
- Returns - No merchant likes to think about returns, but they’re extremely important to customers. Make it clear where they can find returns information, as well as what your policy is around the holidays if this is different to the rest of the year e.g. extended returns windows.
Consider what you’ll do post-purchase to continue making a great impression - create a memorable unboxing experience, offer additional assistance, and ask for feedback.
Listen to your customers
We always put emphasis on the importance of taking the time to really listen to your customers; we also included it in last year’s BFCM blog. It really is crucial to your strategy, as at the end of the day it’s your customers that you want to appeal to.
Pay close attention to your social media and what customers are saying there, as well as what kind of enquiries are coming through your customer service platform. What are the common queries people are already asking? How could you best address them now and as time goes on? If you’re planning how to handle shipping costs and times, ask your customers what they think - surveys with different sets of previous customers asking what they expect to pay for shipping, what cost vs delivery time they’re happy with etc. to get a better understanding of what they actually want.
You can also use other resources to bolster your approach such as polling and research conducted by external sources like Shopify to get a wider picture of what the ecommerce landscape looks like coming up to Black Friday. It can also be helpful to look at what your competitors are doing; how are they responding to the same issues?
Black Friday/Cyber Monday weekend presents one of the year’s biggest opportunities to boost holiday sales for merchants around the world. Getting ahead of the issues now will prepare your brand to not only satisfy customers, but start your store’s holiday shopping season in a much stronger position.