Amazon Affiliate Marketing Program

A holiday season of questions and opportunities

A holiday season of questions and opportunities
Written by publishing team

E-commerce, retail stores, consumers shop more, consumers shop less? Retailers have a lot at stake this holiday season. I’d like to start with some questions that are on my mind.

  • Will there be enough stock?
  • Will the season be less promotional?
  • Will consumers shop early and be less interested as the end of the season approaches?
  • What kind of growth can retailers expect?
  • How will consumer behavior be different in 2021?
  • What are the biggest obstacles to success?
  • How will retailers deal with the giant Amazon?
  • Will they be generous with the shipping and return policies?
  • How aggressive are retailers in their marketing strategies?

Digital Commerce 360’s annual pre-holiday survey was completed by 100 retailers during the summer through fall (July – September). Our research looks forward to answering these questions and more.

On a positive note, nearly all retailers expect the 2021 online holiday season to see revenue growth. With the breakout as follows, the up pronunciation is:

  • Top 25%: 34%
  • reach 1-24%: 48%
  • Flat: 6%
  • down: 12%

A retailer’s perspective on the sophisticated shopper

Given the turbulent nature of the era, retailers believe it is important to understand consumer behavior and how it can affect holiday shopping online. The following represents what retailers expect from online shoppers all season long. 53% of retailers believe shoppers will travel and gatherings will take place this holiday season. They expect a group of shoppers to keep it local as expressed by 33% of survey respondents.

Other expected behavioral changes noted by retailers might include a focus of buying with Amazon (23%), shoppers looking for experiences rather than products (20%) and 19% suggesting shoppers will buy more in markets. Omnichannel is a force to be reckoned with as 52% believe there will be BOPIS and curbside increase, likely driven by previous positive experiences. 35% indicate that shoppers will order faster shipping and 26% may benefit from same-day delivery more. One of the things everyone talks about and what might have the biggest impact on the season is that 42% will find products out of stock than in past seasons and 29% will buy early to avoid running out of stock. In my opinion, this could be taken to a higher level.

The 2021 holiday season should see growth across all channels and the implications for retailers will be insightful. Domestic sales will grow 72%, however international sales outside North America will still do well at 34%. The private retailer’s site is expected to be the winner with the largest growth of 70%. Market growth is also expected to be strong and participants indicate that the Amazon market will rise by 48% and other markets will soon follow at 46%.

  1. Now looking at different parts of your business during the holidays compared to the same period in 2020, how do you expect the 2021 online holiday season to compare from a revenue perspective?
growth
Domestic sales 72%
private site 70%
Amazon market 48%
Other Markets Outside Amazon 46%
International sales (outside North America) 34%

However, hurdles abound – retailers face rising costs as well as logistical and inventory challenges. Profitability looms large for survey respondents with the following challenges: increasing costs (47%), achieving profitability goals (35%) and managing marketing budgets (21%). All of these concerns about looming inflation, which weighs on 25% of retailers. Retailers expect logistics to be a challenge amid high customer expectations starting with just-in-time delivery (44%) and boosting fulfillment efforts (31%). The inventory dilemma also remains one of the biggest challenges as 41% were concerned about securing enough inventory.

Another reason for this is the ability to improve product assortment, as mentioned by 22% of those surveyed. It’s hard to get the numbers right, and that’s true of the 38% of those calling for the volatility of consumer confidence. And 37% of retailers said forecasting growth is always a challenge. The Amazon worker is working forever hoping to capitalize on the growing market business of the 28% and 25% who point to Amazon competition overall. Of course, 29% of respondents want to make sure technology systems are up to date.

Retailers invested first and foremost in marketing (47%) and customer experience (44%) to grow their holiday business. Marketing investments include everything from embracing the increasing role of social media at 36% to the continued value of SEO at 20%. Customer experience should always include customer service and investments were coming in at 39%. Site checkout at 38% is always an area where retailers are looking to improve, and so is personalization for 25% due to their conversion impact. Mobile should also be touched upon with 21% cited for its continued association with online shopping. Ecommerce platforms (37%) and analytics/testing (35%) top the list of back-end technologies; Several other people were noticed though, with a penetration rate of less than 20% of those surveyed. In support of current industry trends, both logistics/operations (26%) and fulfillment/delivery/supply chain (24%) are seeing significant investments. Retailers are also looking to get creative with products, services, new models, and address employee issues, a challenge looming for many retailers.

With customer experience receiving strong attention, we wanted to dig a little deeper and discuss tactics that retailers believe will help them improve their holiday business. For at least half of the retailers surveyed, site research, homepage upgrades, better product information and checkout are all very important to improving business on the holidays. Providing shoppers with the information they need efficiently from product search through checkout has always been and remains one of the switches.

Retailers act proactively to improve inventory, increase orders along with reviewing their network of vendors while simultaneously increasing contact and trying to monitor the situation. From a demand perspective, this means buying more from existing suppliers (40%), more demand from new suppliers (34%), more orders from more countries (27%), and more orders overall (24%). Much of the retailer’s work takes place behind the scenes, and that includes continual communication with suppliers (37%), aggressive monitoring of deliveries (30%), and work to reduce disruption (28%) including using technology to aid in those efforts (14%) ). Planning is also at the heart of keeping the supply chain intact, and these factors are in both contingency plans (26%) and alternative manufacturing plans (23%). The only thing retailers can trust is that there will be uncertainty and being on standby with substitutes and a wide range of supplier relationships, based on communication, will serve them well.

Addressing some of the best ways to compete with Amazon has to start with the customer experience and here 37% suggest they will pay more attention to customer service. In my view, this is the thing that usually pays off. More personalized experiences (36%), loyalty programs (34%) and site-enhanced content (26%) were all on the retailer’s to-do lists. Commerce is always important and 36% of retailers surveyed believe they can offer unique or curated choices. 31% indicated that innovative promotion should also be a differentiating factor, along with creative gift offerings that meet the needs of the season by 24%. Of course, money conversations always start with free shipping (27%) along with lower rates (23%). Trying to match Amazon’s delivery prowess wouldn’t be easy but 26% were aiming for faster delivery. Pursuing Amazon at its own game also means an increase in the number of marketplaces by 24%. Of course, omnichannel remains a factor as 17% will attempt to provide better integration across channels while 14% will seek better expansion/implementation of omnichannel features.

We all know the shopper is looking for free stuff across the board, so you need to be as competitive as possible on delivery with BOPIS (online buy in store pickup) and the pier should start the season with just the right note. Retailers will offer a range of shipping options during the holiday season with options as follows.

free

  • 2 days: 24%
  • Next day: 14%
  • Same day: 12%

to push

  • Next day: 22%
  • 2 days: 18%
  • Same day: 12%

Retailers maintain profitability in the game with 17% intending to offer free unconditional shipping while 47% will require a minimum purchase to get free shipping. With this in mind, 36% will use a combination of tactics to monitor performance and the competitive landscape. Other free shipping requirements to consider include being tied to a specific category (22%), loyalty program benefits (18%) or the option to wait longer for shipping (11%).

Although many critics predict that it will not be a very promotional season, retailers still use methods that go beyond both digital gift cards (41%) and physical gift cards (22%). Retailers will offer online-only promotions to incentivize online shopping while deploying more traditional tactics, including discount rate options (38%), buy more save (34%) and product grouping (28%). It is also important to be aware of finance, which continues to see growing interest and will be among the 33% of those surveyed. Given that we expect shoppers to buy early, watch for early-season promotions among 32% of retailers surveyed while last-minute shoppers won’t be disappointed at 30% of sellers.

They will start marketing their holiday early in anticipation of consumer interest as follows:

  • July-October: 59%
  • Early November: 23%

When asked, “Given the changing dynamics of today’s marketing programs, please assess how you plan to adjust each of these available methods as a percentage of the total holiday budget this year,” more than half of retailers are increasing email, social and SEO with sees Most others grow too.

more
email 67%
Social media (Instagram, Facebook, Pinterest, TikTok, YouTube) 63%
SEO 56%
Content Marketing 48%
Impact on Marketing 47%
Paid search 45%
Affiliate Marketing 41%
Mobile ads (web and app) 41%
Advertisements in markets outside of Amazon (Walmart, Target, Etsy, etc.) 37%
SMS/Text Messaging 37%
Amazon Ads (Brands and Sponsored Products) 30%
Direct mail / print catalogs 24%

Retailers are adopting more customer-focused return policies, from extended return deadlines and free return shipping, two of the customer favorites we’ve monitored over the years.

While we started with many questions, we hope this sheds some light on some answers for what will certainly be an uncharacteristically off season. We’ll shop and hope our picks are in stock and our deliveries are on time.

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