Five Takeaways on how Brands are Preparing for the New Normal of Holiday Shopping
Five Takeaways on how Brands are Preparing for the New Normal of Holiday Shopping
Peak season is a critical time for retailers, the National Retail Federation reports that sales between November and December of 2022 totaled $936.3 Billion. To understand how small and mid-size merchants are preparing for the last quarter of 2023, Ware2Go deployed its second annual peak season survey. The 2023 Peak Season Prep report uncovers merchant sentiment for the 2023 season, business priorities and common tactics to drive sales.
Although industry leaders may be taking a conservative approach to 2023 peak season sales predictions, Ware2Go found that 73% of merchants expect higher holiday sales compared to previous years. This sentiment seems positive in nature, however, merchants are not leaving anything to chance in 2023, with 93% noting they have made significant adjustments to their peak season planning. The report found that merchants are relying on two major strategy shifts: more frequent demand forecasting and a greater investment in promotions. These shifts will manifest in the following ways:
84% of merchants will focus their efforts on more robust promotional calendars. This involves longer sales cycles (52%), steeper discounts (39%), and earlier promotions (28%). Consumers can look forward to a wide range of promotions, the top five most popular options they’re looking for include new customer discounts (57%), Black Friday/Cyber Monday deals (47%), loyalty program perks (41%), free gifts with purchase (32%), and free shipping (32%). As merchants compare their inventory to forecasts, they can adjust their promotional calendar to optimize holiday sales – without compromising on margins.
In addition to the increased focus on promotional calendars, half of merchants plan to unveil new deal days, coupons, or promotions to entice purchases. The success of events like Amazon’s Early Access Sale last October underscores the consumer appetite for earlier sales and additional deal events and represents an opportunity for merchants to gain sales traction early in the season.
Approximately 2-in-5 merchants plan to provide an economy shipping option this year. Recognizing the importance of delivery experiences, 95% of merchants have added at least one delivery option in response to growing consumer expectations for choices. These options include free shipping (47%), 1-2 day delivery (37%), free returns (39%), real-time tracking (37%), in-store pickup (36%) and the ability to choose delivery date (32%), among other features. This underscores Ware2Go’s previous research findings that consumers prioritize greater control, personalization, and lower costs when choosing their shipping options. Offering multiple delivery options hinges on the ability for merchants to integrate fulfillment and sales technology across a national warehouse network – support that Ware2Go can offer to its clients, small and large.
Merchants are not only focusing on attracting new customers, but nurturing existing ones as well. Popular (re)engagement strategies include: loyalty rewards (59%), attracting new customers with first-time purchase discounts, fast and free shipping, or free gifts (57%), re-engaging dormant customers with new product features and personalized promotions (45%), and incentivizing earlier purchases with early limited-time offers (41%). With consumers shopping on more marketplaces than ever before, having a multi-marketplace strategy is essential to engaging with new and existing customers. By meeting customers where they are, merchants can streamline the discovery and purchasing journey.
Ware2Go’s findings reveal that merchants are not yet out of the woods from the inventory surplus that plagued merchants last year. Most merchants (73%) noted they have higher inventory levels compared to last year, with some merchants intending to offload current inventory (33%) and old inventory (34%). With comparison shopping on the rise, merchants are investing in robust promotion calendars. By regularly analyzing demand forecasts, merchants can be more strategic with their promotions, prioritizing SKUs that are in excess or cannot be sold at full margin.
In reflecting on the 2023 Peak Season Prep report finding, Ware2Go CEO Steve Denton states:
“For many merchants, peak season accounts for 30% or more of their annual revenue, however, with industry uncertainty amid the 2023 peak season, merchants must implement a reactive sales strategy. To counter the unknown, data and agility will be merchants’ greatest resources. While regular analysis of demand forecasting informs shifts in promotion strategies, merchants must ensure that their fulfillment partner is able to quickly pivot and successfully adapt to changes in sales volume. The 2023 peak season will be unlike any other, challenging the retail industry to remain dynamic in their approach across the season.
By partnering with an outsourced fulfillment partner, like Ware2Go, businesses of all sizes can leverage best-in-class technology to forecast demand, grow sales, and improve their bottom line. You can learn more and read the full 2023 Peak Season Prep report here.
Ware2Go Media Contact: