As summer continues to fly past, canny ecommerce businesses have their eyes on winter already. To get the best out of the end-of-year upswing in demand, you’ve got to be prepared. Here’s how that breaks down for online retailers.
To start with, let’s break apart the business into 3 areas – your purchasing strategy and supplier relationships; your sales channel presence; and your fulfilment capability and warehousing efficiency.So how can you adapt your usual supplier strategy to get the most out of peak periods online?
They say knowing is half the battle, and they have a point – do you know which products are the most profitable, which ones benefit you most during peak trading season and which ones are perhaps more costly than you realise?
If you have that information to hand, the decisions will flow easily. Order in what makes the most money over time. Margin multiplied by velocity is the basic measure of a product’s value to you.
Any products you do decide to liquidate can make excellent loss-leaders in a highly competitive peak environment, drawing customers to a listing you own whether that is in search engine results or marketplace search, where you can position other items and offers for maximum exposure.
Speaking of your listings, it’s vital to take time to improve their quality and therefore the conversion rates. Just a 1% improvement in conversion on a listing makes a big difference when it is viewed thousands of times, over a Black Friday weekend for example.
Think of your products in terms of experience, rather than data points. Take an example where you’re selling toasters. Is it better to use your product description to detail the various settings it has available? Or could you potentially be telling a story about buyers not having to worry about burning their toast and setting off a fire alarm, or the pleasure they experience from a perfectly toasted crumpet in the morning?
As well as investing in copy improvements, work on the images and the data associated with the product. In particular, taking the time to answer customer questions about the product can reassure would-be buyers and is a way to stand out from the competition.
There’s another way to stand out from the competition – negatively. Charging for shipping and not offering a fast delivery method is a quick way to get ignored by customers, who increasingly expect faster, cheaper delivery options (and perversely, are willing to pay for it on the cost of the product).
Peak season is all about velocity. If you can leverage the exposure of multichannel selling combined with seasonal traffic increase to sell a high volume of goods quickly, you don’t need to be making a huge margin on any of them.
This is a hugely effective model and popular especially with marketplace sellers. The vital ingredient is efficiency and cost minimisation. For it to work, you need to be slick right the way through the operation, from the second goods come into the warehouse to the moment they get to the customer.
Don’t make the mistake of organising your warehouse by product lines as this will actually increase the cost of filling orders thanks to higher picking time.
The best way to utilise locations is to position your fastest selling items closest to the shipping, staging and receiving area of the warehouse to keep most of the picking activity in one small space.
Automation helps to reduce human error and improve productivity. Look for a solution which allows you to control your inventory, both physical and virtual, across sales channels. It should enable you to automate your SKU management – the best solutions do not have an upper limit to the number of variations and master SKUs they support.
Inventory management automation can significantly reduce the risk of overselling by setting minimum stock thresholds, which trigger stock replenishment.