RevLifters' provide Peak Season predictions for eCommerce brands

Peak season is just around the corner. Retail is revving its engine for a three-month frenzy. And whether you’re gearing up for something special on Black Friday or preparing for a longer play over the holidays, Q4 has something for every brand.

In 2020, we saw the culmination of ‘the quickening’ as millions of festive shoppers went online to complete purchases they’d have made in-store before the pandemic.

Last year saw a much brighter outlook, with reports indicating a 10% rise in eCommerce sales against 2020. Now we’re into 2022, retail’s peak period will once again prove very different for consumers and brands.

The top influencing factors are:

• Lower consumer confidence: The downward trend in consumer sentiment in key markets like the US and the UK is set to head right into Q4 as shoppers remain cautious about their budgets.
• Higher inflation: Three-quarters of the public are worried about the rising cost of goods, which is driving prices in the wrong direction and reducing consumer spend.
• Less discounting: Inflation means lower margins for retailers. Despite all the attention drummed up by Black Friday, we expect less discounting in 2022 as brands look to cut costs.
• Online improvements: Time for a positive one? In 2020, COVID forced many retailers online. Expect these businesses to apply two years of key learnings over peak season.
• In-store strength: Despite the appetite for online, signs suggest that many customers are making a return to in-store. Click-and-collect may prove popular for brands as a way of reducing operational costs.

All of these factors will have some influence on Q4 sales. But there are so many reasons to be optimistic about what’s ahead.

To aid your own strategy in the ‘golden quarter’, we enlisted the help of Team RevLifter’s customer success experts to give their two cents on what they think might unfold. They are:

• ‍Alasdair Glen, Customer Success Director‍
• Pete James, Growth Director‍
• Madison Trampleasure, Customer Success Team Lead

Spend will stay healthy

The worries about consumer confidence have left some retailers fearing for the worst. But Pete believes the industry could actually be gearing up for a big few months.

“Demand will not go away – that’s for sure. People will still shop aspirationally on Black Friday and Cyber Monday, and I’ve already heard some ingenious plans for how retailers plan on building that momentum up to Christmas.

“As with any peak season, the main challenge is trying to capture spend from customers who will shop around for a good deal. It’s why so many brands turn to Offers Pages to bring customers back on-site after they’ve abandoned. Regardless of what you’re using, that ‘recapturing’ play has to be watertight.”

Discounting dilemmas

With the cost of goods continuing to rise, will retailers be able to justify the same level of discounting seen in previous years? Alasdair has an idea of how the situation might play out.

“We’ve already seen pressure on brands to curb their discounting due to higher prices along the supply chain and a greater focus on margin. On the other hand, customers will definitely look for a deal due to the impacts of inflation. It creates this strange environment where brands can’t always give customers what they’re actively looking for.

“I think discounts will change to be more focused around specific categories. Maybe I’m a sportswear brand and my footwear has a bigger margin than shoelaces or tops. The offer might differ category to category in order to protect margin. It should provide a smarter approach instead of providing a blanket discount across an entire store.”

Erosion of brand loyalty

On the topic of shopping around for a deal, Pete expects brands to be surprised about the amount of new customers heading onto their sites.

“All brands want loyal customers, but customers themselves have become so used to looking for the best deal.

“My advice is to use the power of free shipping as a cost-effective incentive. Solutions like enable customers to track how close they get to the free-delivery threshold as they add more to their cart. It’s such an effective way to keep them onside without chipping into your margin.

“Another idea could be to run a Spend and Save in an overlay. That way you’re offering a deal – like ‘5% off when you spend $50’ to a customer with a $40 cart – that drives incremental spend.”

Buy in Q4, pay in Q1

Staggering payments could be essential to customers that are feeling the pinch of economic unrest. Madison sees a big uptake for ‘buy now, pay later’ services in Q4 as a result.

“Customers are seeing their pockets squeezed across the globe, but retailers have been quick to remedy the issue through partnerships with the likes of Klarna. Analysis from McKinsey indicates this to be especially popular among young audiences, making it a key option for the beauty and fashion verticals.”

The season of returns will… return

One of the after-effects of Black Friday is the rise in returns from customers that buy more than they need after taking advantage of deals. Madison sees no reason for this to change in 2022.

“We’ve heard brands expressing worry about returns increasing this year as savvy shoppers find better deals before their goods even arrive. I also expect a lot of products to be returned due to post-purchase regret as household budgets are getting much tighter.

“One plan could be to avoid issuing discounts to customers with lots of the same item in their cart. That way you’re not rewarding a big purchase that will eventually become quite small.”

Strange purchases that actually make total sense

As for the winners by vertical, we’re going to see a very interesting set of reports this time around. Alasdair expects lots of demand for TVs and a major boom for online takeaway services. All thanks to a first-ever in the sporting world.

“A certain international football tournament is going to put a very different spin on peak season. I expect some consumer electronics brands to focus their pre-Black Friday deals on TVs and home theatre equipment as the first ever winter World Cup kicks off in Qatar.”