by Amba Wilkes
It’s time to get our peak shopping brains in motion. For our preparing for peak 2021 webinar, we were joined by eCommerce experts from Shopify Plus, Klarna, LoyaltyLion and Brightpearl. Take a look at what we discussed and the insight they shared on how you can make the most of peak 2021 and beyond.
Last year was memorable to say the least.
Some brands were having the best retail performance they’d ever experienced. While the huge uptake in eCommerce was met with great opportunities, it was also met with great challenges.
The busiest time of year for many, 2020’s peak shopping period was a guessing game for all. Brands were unsure of what to expect compared to previous years and 2021 is very much the same.
To discuss the fast-approaching peak season, we hosted a webinar with eCommerce experts from Shopify, Klarna, Brightpearl and LoyaltyLion. Discussing trends for this year and how merchants can make the most of increased demand, our panellists share their insight into peak 2021.
2020 was a catalyst for eCommerce growth. With approximately 10 years of innovation occurring in three to six months, there’s no wonder shopping habits were transformed.
Here’s a summary of what our experts saw:
Out of necessity, many shoppers were buying products online that they wouldn’t have previously. For a number of merchants, this led to big acquisition opportunities to get new customers through the door.
Matthias, Sales Executive at Shopify, supported this: “For the US market, McKinsey saw that at the end of 2019, eCommerce penetration was 15 percent and that jumped to about 35 percent in just a matter of three months. We saw everyone come online.”
There was also a significant shift seen in the demographics of people coming online which spread across many industries. Chris, Commercial Manager at Klarna, noted the same commenting, “For the Buy Now Pay Later Klarna option, Generation X were our largest growing customer base. It really flipped the antiquated view of who would be using the products we offer on its head”.
Merchants experienced immense pressure to cope with the increased demand. According to Klarna, they were regularly seeing 100 transactions per second across peak last year which gives an idea of the traffic going through websites during this time.
customer loyalty focus.
Those brands that got peak 2020 right were those that managed to create a good customer experience and build customer loyalty.
Jordan, Partner Manager at LoyaltyLion, commented: “One thing we thought was really interesting over that weekend was that members of a loyal customer base actually referred more of their friends. So, 10 percent of loyal members referred more customers which meant more acquisition on top of paid for acquisition channels as well, which is really shocking.”
peak 2020 in stats.
- 55% of shoppers bought products online that they had previously only purchases in store – Brightpearl
- In 2020, 78% of consumers said they will be buying online more frequently within the next 12 months - Brightpearl
- 40% of consumers said that they will only shop online within 5 years - Brightpearl
- Member orders jumped 13% meaning existing loyalty program members returned and repeat purchased - LoyaltyLion
- Customers redeemed 48% more rewards and engaged with the loyalty programs they were a part of - LoyaltyLion
- Loyalty members referred 10% more shoppers - LoyaltyLion
- Existing customers welcomed communications from brands they know and love – loyalty program email open rates saw an increase of 18% - LoyaltyLion
- New shoppers were open to building relationships with brands, with merchants experiencing a 29% uplift in program sign-ups - LoyaltyLion
2021: predictions from the experts.
Since the pandemic began, many brands have accelerated their eCommerce journeys, and many have started their eCommerce journeys too. As a result, this year may only be the second peak season for some.
Not only are we seeing new customers come online but we could also have a new generation of less experienced merchants entering the eCommerce world.
So, how can they prepare? Here’s what we think the 2021’s peak trends could entail:
promotions begin even earlier.
Last year, we saw the peak season start earlier than usual and we expect this to be the case again. Once just a weekend event at the end of November, Black Friday and Cyber Monday could now begin as early as October as consumers buy sooner to guarantee the products they want.
Since lockdowns have subsided and people have come off furlough, there could likely be more disposable income and a willingness to spend more. There’s also been pent-up anticipation of people not seeing loved ones or being able to gift as they usually do which could well be made up for this year. This is going to open many opportunities and elements such as alternative payment methods like Klarna are only expected to grow.
Research from Adweek found that approximately 90 percent of people used at least one social app to find a new product. This openness to find new products online is only growing. Figuring out ways to create social shopping experiences is potentially going to permeate certain industries.
Now that people are able to shop in physical retail spaces, we expect peak 2021 to centre around omnichannel experiences. Merchants should focus on having a single line of communication with their technology to offer seamless experiences to their customers, however and wherever they choose to shop.
using loyalty as a customer acquisition tool.
Acquiring customers during peak season is hugely important. The surge in online shopping presents an opportunity to acquire customers that you wouldn’t have before. But with 89 percent of consumers saying they’ll stop buying with a brand after a negative experience, it’s important to get it right the first time.
During peak season, many shoppers will be using a brand for the first time. Jordan (LoyaltyLion) believes that this factor could cause a shift in brand messaging:
“What we're predicting is that brands are going to move away from this transactional, ridiculously high discounted approach and move towards getting a customer to actually understand their brand, the value of their product, their brand alignment and all of those elements.”
Chris (Klarna) also agreed, commenting:
“I think people will remember those merchants that were there for them 12 months ago or were there in their time of need. I'm not talking about the Amazon world. I’m talking about the independent merchants and smaller companies out there. I think loyalty might actually supersede price and convenience for certain customers.”
If you can acquire and retain these customers, that’s when you enter real growth mode enabling you to scale fast.
changes to communication.
It’s not only harder than ever to reach new customers due to the competitive nature of eCommerce, but it’s also becoming harder for brands to acquire new customers by relying on ad networks due to privacy changes.
We recommend investing time in building relationships with your customers by opening up direct channels of communication. Whether that’s using your best and most valuable customers or lookalike audiences, or whether you're encouraging customers to sign up to your newsletter or follow you on social channels.
Sustainability is growing to become a top customer expectation. Dan, MD at Statement, shares his thoughts:
“Sustainability is not going away. But it poses a real challenge for brands, because there are some that have got sustainability at the heart of what they do. Then there are others where sustainability has perhaps not been as prominent, and those brands have got to go through an evolution.
I'm really looking forward to seeing how brands evolve on that sustainability message and what impact it actually has versus what brands might say they're going to do.”
maximising your sales during peak.
There you have it, the top predictions from our panel of eCommerce experts. But now you’re aware of the trends that could be coming our way this year, what can you do to make the most and maximise your sales?
reflect before planning.
We all know just how important preparing for peak is. Without a solid strategy in place, you’re likely to fail before you even begin. Our experts advise being self-critical - take a step back and complete a full analysis and end-to-end customer journey to nail this year’s offering on the head.
Even though 2020 peak season was a unique one, it’s still worthwhile taking a look back. Matthias (Shopify Plus) shares more:
“Take a look back, look at the number of customers you acquired. Out of those, how many purchased a second, third, fourth time? Was there a specific campaign you ran, a specific creative, some sort of email marketing template that got engagement or a high conversion rate? I think you could definitely take some learnings from this and avoid some major pitfalls based off other tactics that didn't work.”
Even better, there are a number of methods that can generate quick wins in this area. Chris (Klarna) gives us a rundown of ideas you can take into peak season and beyond:
“Everything from FAQs, easy to answer customer queries, even just being able to get in touch with merchants to ask those pertinent questions is so important. You want your customers to be able to move on with each transaction in the simplest possible way. These are real quick wins that every business can take into peak and continually review throughout the year.”
speak to your audience.
Don’t assume what worked last year will work this year. Many merchants will offer a range of discounts and set them sitewide. But these discounts may not actually be what your customers want from Black Friday.
Speak to your audience. It’s something very few merchants actually do. Ask them what they would love to see from your brand this year – it could have a huge impact on your conversions and customer retention.
maximise acquisition but don’t forget about retention.
Understand who you’re actually acquiring. Something as simple as setting up Shopify Flow and tagging new customers will help you feed them into your loyalty scheme. That way, even if they don’t purchase straight away, you’re still getting that brand exposure.
Jordan (LoyaltyLion) expanded on this approach further:
“We always give the tip of making sure that new customers are signing up to your newsletter. Make sure they're signing up to loyalty schemes, make sure they're incentivised to follow you on Instagram and Facebook. Whilst you may have a huge spike in transactional orders on peak weekend, the dividend is getting paid in the next 12 months following.”
While it’s important to put time and effort into your acquisition strategy, don’t forget about your already loyal customers. Reach out to those who have already shopped with you with incentives to get them to come back and convert again.
embrace social media to boost engagement.
As people branch out to shopping in-store again, how can you connect the digital and offline worlds? Social interaction can be used to create a rich and immersive experience between customers and merchants.
Engaging with customers in an online retail environment such as live Q&A sessions, social posts and stories help to establish a relationship with them. There has even been talk of bringing live video shopping into the eCommerce experience. With Klarna acquiring social shopping platform, HERO, these advancements could be just around the corner. Taking this approach also ensures your customers are getting the answers they need in the most convenient way possible.
Dan (Statement) shared his thoughts on the topic:
“These things are still quite new and there’s a balance of offering these services with logistics and providing it in a regular manner. But I think the brands who are open-minded are the ones who will win.
I would love to see more merchants engage with that technology as we move into peak this year and beyond. I think those brands who create that connectivity, joy and fun are the ones that are going to gain a competitive edge.”
the importance of accurate inventory.
Not only have we been through a pandemic, but Brexit too. These events have impacted many industries and a lot have been stripped of supply.
Alex, Channel Manager at Brightpearl, gave words of advice on inventory:
“A key thing is making sure you've got accurate inventory across all of your different sales channels. This means you never sell stuff that’s at a rudimentary level or that you're out of stock of as that’s probably one of the biggest disappointing customer experiences.”
get your delivery processes and offers right for your audience.
Delivery can be a significant deciding factor when it comes to purchase. Alex (Brightpearl) shares some stats on why delivery is so important to get right:
“We did some research that showed that nearly half of consumers have had at least one bad experience related to delivery and tracking within the last year and almost half of retailers agreed they lost customers due to missed or failed deliveries.”
Get the foundations in place and ensure you’re set up for success so that you can offer choice as this choice can be a differentiator for your brand. It can be an influence over whether a consumer chooses to purchase, but also whether they choose not to purchase.
This is just the tip of the iceberg when it comes to preparing for peak. Take a listen of the full webinar to hear even more insight directly from our panel of eCommerce experts. Or get in touch with the team if you need further guidance on making the most of this year’s peak period.