How to Optimize Your eCommerce Plan for the Golden Quarter

From strained supply chains to scarcity marketing - check out what our panel of experts had to highlight as things you could optimize in your eCommerce operations before the Golden Quarter.

From strained supply chains to scarcity marketing - check out what our panel of experts had to highlight as things you could optimize in your eCommerce operations before the Golden Quarter.

2020’s Golden Quarter saw 45.2% growth in eCommerce revenue in the US compared to 2019. What’s more, eCommerce penetration in the last 2 months of 2020 jumped to 25.7% from 19.2% in 2019 - more than four times the growth from the previous 5 years.

This growth represents a fantastic opportunity for businesses - but not without its challenges.

Brands need to think carefully about what success means for them this holiday season (by the way, check out our top tips on how to get the most out of your campaigns before, during, and after the holiday season). At our recent event about optimizing for the golden quarter, Jon Love, Research Analyst at Digital Commerce 360 asked our panel of experts what’s different this year. Read on for insights from Ryan Fritzky, Co-founder and Chief Marketer at Bean Box, Jeremy Wagner, Director of eCommerce, GiftsForYouNow, and Adverity’s own General Manager US, Heath Podvesker.

 

Watch out for shrinking margins and strained supply chains

Supply chains are stretched thin, the US postal service announced slowing of first-class delivery, and prices continue to rise, tightening margins for businesses across the globe. One thing’s for sure - this Golden Quarter is going to be different.

“Last year, COVID caused major carrier delays, leading retailers to push customers to buy early and relieve stress from shipping,” says Jeremy Wagner, Director of eCommerce at GiftsForYouNow, a leading personalized gifts retailer. “This year, on top of that, the supply chain is becoming an initiative. Getting products is more difficult, the products we do have are more expensive and freight prices have gone up sixfold.”

In short, resource scarcity means competition is much less predictable. Businesses don’t know what products competitors have access to. Following logistical difficulties, companies like Home Depot have chartered their own vessels to make sure products are shipped in time.

Wagner adds, “Labor shortages and higher wages mean margins are getting smaller, and there is less room for ad spend.” This combination of scarcity and tighter margins has led to many organizations ditching black Friday’s aggressive discount tactics.

Campaign trend: discounts are out and scarcity marketing is in

With costs rising and inventory more scarce, marketers have to be creative to attract high-value customers. Discount tactics might work well for engaging new buyers, but they won’t necessarily lead to bigger purchases or lifetime value. Coupled with tighter margins and resource scarcity, it’s likely that discounts won’t be playing as much of a role as they did back in their heyday of the 2010s. Businesses simply can’t afford it.

“Historically, companies have spent two to three times more on promotions than on paid media. It still makes up a big portion of investment, but with limitations on inventory and logistics there’s less need to leverage promotions,” says Heath Podvesker, General Manager, Adverity.

“Your ability to look at data must be in the right spot to do this. Understand the whole picture, because that’s what’s going to put you above 90% of other businesses.”

Jeremy Wagner, Director of eCommerce, GiftsForYouNow

 

Ryan Fritzky, Co-founder and Chief Marketer at specialty coffee brand Bean Box, explains that one counter-trend to discounting he expects to see more of is using resource scarcity as a marketing tactic. “Unique, limited drops have a premium associated with them, meaning more margin opportunity. You can generate more demand if you’re smart about using the right channels and influencers.”

The movement towards more partnerships and influencer marketing has been catalyzed by Facebook’s traceability issues. Confusion around performance has seen more and more businesses breaking out of marketplace dynamics.

“Large publishers will likely be focusing more on affiliate content and commissions. We’ll see more guides, more lists of products, and more opportunities to work with partners and influencers,” says Fritzky. It’s no secret that influencer marketing is a great way to reach younger audiences, with nearly half of Gen Z admitting to making a purchase because of an influencer, compared to one in five of the general population.

“If you can get a product in someone’s hands and they believe in it, especially the younger TikTok audience, there are far more opportunities to reach people than just using a credit card to bid on ads,” Fritzky adds.

How should marketers be measuring campaign health this year?

Cookie deprecation has changed how we think about digital attribution and marketing metrics. Podvesker explains “Marketers need a better overview, and a more dynamic approach. Not just static strategy based on gut feeling or panic. It’s easy to be blinkered by performance marketing metrics like CPC and CPM. These are certainly important and worthwhile, but marketers also need to seriously think about the bigger picture, the cost of acquisition, and lifetime value ratios.”

This can be difficult for smaller startups with less data to point them in the right direction. “Start-ups need to use initial ad spend as a learning tool,” says Jeremy Wagner. “Use the time to put your marketing strategy through paces, understand strengths and weaknesses against different audiences you’re targeting. Your ability to look at data must be in the right spot to do this. Understand the whole picture, because that’s what’s going to put you above 90% of other businesses.”