The 2016 holiday season brought in more than $1 trillion in sales for retailers. For many, it’s the biggest time of the year and accounts for up to 30% of annual sales. And, the 2017 holidays are right around the corner.
For eCommerce retailers, holiday success comes down to two departments: Marketing and Logistics. Your marketing drives demand and your logistics makes sure it’s met.
Every good eCommerce company is knee-deep in their Q4 plan, but what if you had an “ace in your pocket” that could set your Q4 promotions apart? What if you could connect two unlikely allies—your marketing and logistics teams—to create a holiday campaign promoting fast, free shipping for your best sellers?
The landscape: What’s gotten us here? (AKA, why you must combine marketing & logistics)
The Internet has fundamentally transformed retail. It’s made it so that nearly every commodity is available 24/7. That accessibility is transforming buying behavior, customer expectations, and forcing businesses to find new ways to meet customer demand.
For online orders, it wasn’t that long ago that 5-7 business days was the accepted norm and that faster delivery came at a premium. But that’s changed.
The driving force behind it all? Amazon. Amazon has spearheaded what it means to be an eCommerce retailer. It has changed expectations. Shoppers want access to more stuff that they can buy as quickly as possible at low prices. And, they don’t want to wait a long time for the products they buy. From digital merchandising to shopper profiling to shipping logistics and returns, Amazon has defined and streamlined every stage of the purchasing lifecycle.
Today, more than 85 million households in the U.S. are Amazon Prime subscribers—reaping the benefits of free, two-day shipping. And with a 38% YoY growth, that number could hit 100 million by the end of 2017.
Competing with the convenience of Amazon and its delivery promise is daunting. From day one, Amazon’s fulfillment network was built to process orders efficiently and quickly, which has enabled it to scale and become the retail giant it is today.
But for those of you that want to differentiate yourself and compete with Amazon, you need a fulfillment solution that improves your delivery promise and a marketing team that knows how to promote it.
Heading into the holidays
As you plan your Q4 strategy, it might be worth considering how a cross-departmental campaign between marketing and logistics could give you the competitive edge you need.
It can be hard to cut through the noise in the market, and if you’re not out there selling something entirely unique, then you need a different strategy for winning sales. Additionally, if one of your strategic goals is to move more sales conversions through your own channels, your logistics will be the undercurrent to your success.
Consider this: Put top SKUs in pop-up fulfillment locations
You know your customers better than anyone. What if you could add fulfillment “nodes” where your customers are, stock them with your top-performing products, and run “free, next-day delivery” promotions?
Not only would you hit your target markets, you would significantly enhance your eCommerce value proposition. The result? Satisfied shoppers, reduced shopping cart abandonment, and increased sales during the time of the year you need it most.
A look at the 2016 holiday season:
- Amazon dominated—37% of all online sales moved through Amazon between Thanksgiving and Cyber Monday
- Globally, holiday spend exceeded $1 trillion—a 4% increase from 2015
- eCommerce is continually on the rise—2016 marked an all-time high with $3.45 billion in eCommerce spend
Did you know?
- 73% of shoppers today want affordable, fast shipping
- 49% want free shipping and 35% want easy returns
- One of the top features when making a purchasing decision is delivery speed (54%)
- Shoppers can shop anywhere—even when they’re shopping: 76% of shoppers use their smartphones while shopping
- 86% of shoppers say a bad post-purchase experience (delivery) will damage the brand relationship more than a bad pre-purchase experience
How to create holiday campaigns that win
Creating holiday campaigns that will crush your competition revolve around three factors:
- Know your audience
- Be on their channels
- Leverage logistics to meet demand
Know your audience
Being able to clearly identify your target audience is marketing 101. Once you define your market, you can look at specific buying behavior to discover the kinds of advertising that draws the largest conversion rate, on-page factors that support sales, and how shopping cart changes—like different shipping times and costs—impact completed sales.
Tune into their channels
Figure out what channels will best serve your campaign during the holidays. The rise of social media has made it easier for customers to share information in real-time. For many, social media is a way to crowdsource where to find something, post about a purchase, or look for peer reviews when considering a certain product. Never before has it been easier to poll a community to during the research phase.
When you leverage tools like Facebook Ads, you can get very granular in how you target customers. Create campaigns that attract your ideal shopper and simplify conversion—so they can go from pre-purchase to post-purchase seamlessly.
Leverage logistics in a new way
With a flexible solution for fulfillment, you can improve your delivery promise and integrate that into your Q4 marketing campaigns. We know what you’re thinking: How can a marketing initiative translate into a new fulfillment solution? As you consider your top-performing products for the holiday season or which products you’re going to put marketing efforts behind, you can leverage an on-demand fulfillment solution to move your best sellers faster and more affordably—for both you and your customers.
Driving your top-performing SKUs
Building out a fulfillment network is traditionally clunky and expensive. Procuring and leasing warehouse space is riddled with paperwork, risk, capital expenditures, and long-term commitments.
On-demand warehousing enables retailers to add fulfillment space and resources to their network using a pay-as-you-go model. If you want to “win Q4”, this is huge. Instead of investing in space and resources that would become “dead capital” after the holiday rush, you can pop-up what you need for the amount of time you need.
With an on-demand fulfillment solution, you can create marketing campaigns that promote your best sellers with a better delivery promise; for example, offering free, next-day delivery. Logistically, what that would mean with an on-demand solution is adding fulfillment “nodes” to your network that are dedicated to fulfilling orders for those particular products in specific, high-value regions.
Here's how it works
The last mile of delivery is the most expensive step for eCommerce retailers. As your customer base grows, getting products shipped to them cost-effectively is becoming a priority for many retailers.
By adding more fulfillment locations to your network, you can move your most popular SKUs closer to your customers. Closer inventory means a shorter last leg of delivery, which cuts the cost of outbound shipments by letting you take advantage of ground transportation.
This holiday season, you can outperform your competition with a marketing campaign and fulfillment strategy that rivals Amazon’s and meets customer expectations for fast, affordable delivery. This Q4, win them over.