JD.com and Alibaba create indexes to identify Chinese shoppers’ spending trends, which help retailers gain insight.
A close look at last year’s data can give an online retailer an edge in marketing during the upcoming season. And make sure buyers and marketers are talking to each other, advises a Mercent executive.
For many of us, fourth quarter planning feels much like a tumultuous surf—just when you catch your breath, it’s time to suit up and head back into the fray. Such is the yoke of the retail marketer. As the sting of last Q4’s late nights and agonizing decisions finally begins to fade, it’s time to start planning for the next one. The heightened focus is well justified given the size of the opportunity—over the past three years, nearly 40% of yearly revenue for Mercent’s retail clients has come in Q4.
As you set budgets, map out strategy, and wax down your board, here are some principles and best practices to keep in mind.
Align Merchandising and Marketing Strategies
Despite the rise of omnichannel commerce strategy and the growing velocity of online commerce, less than 50% of retailers involve marketing in their merchandising strategy, and vice versa. Integrating merchandising and marketing strategy will be more important than ever in Q4 of 2014. The rise of Google Local Inventory Ads, combined with the growing prominence of mobile e-commerce, means that inventory data must be accurate, timely, and store-specific like never before.
First, you must ensure that inventory levels in your product data feeds are accurate and responsive to actual warehouse values. As products sell rapidly during Q4, it’s crucial that products falling below a certain threshold—or out of stock altogether—are removed from your feeds to marketing channels. This ensures that shoppers aren’t disappointed by clicking through to an out-of-stock product page on your retail site, and will keep Google from dinging your Quality Score for inaccurate product data.
It’s also increasingly important for marketing and merchandising stakeholders to communicate with one another. If Marketing is focused on particular products that are expected to sell in high volume at a favorable return, this should be communicated to merchandising teams well in advance of Q4, so they can acquire inventory to support the marketing push. Conversely, if merchandising teams expect a dearth of certain products or brands, they should communicate limitations to Marketing so that strategy can be adjusted accordingly.
As much as possible, begin facilitating communication between teams prior to Q4.
Make Changes Ahead of the Curve
First, pinpoint the weeks and days that historically bring high revenue. To do so, look at performance across the past several years and identify the periods of relatively high conversion rate, revenue volume, and average order value. Use expected or desired year-over-year growth rates to forecast target revenue volumes, keeping in mind the ways the calendar differs from past years—Cyber Monday will be a different date, whereas the shipping cutoff will be the same date but a different day of the week.
Second, identify specific products, categories and brands that are likely to deliver strong volume at a favorable return. To determine likely top-sellers, analyze product-level data from last year’s high-performing period. Once identified, build history by bidding up on these items well in advance of your high-volume timeframes. Channels will prominently surface products with high bids, likely contributing a high volume of clicks. Channels are therefore incentivized to continue showing these products once your high-volume days are at hand, beating out other merchants who are bidding similarly but without such foresight. In the case of Google Shopping, make sure that top-selling brands and categories are all represented granularly within Shopping Campaigns, along with other key product attributes. For example, if women’s Arcteryx rain jackets perform well historically, make sure your product groupings are set up at this level of specificity. This will allow you to assign the right bids and maximize impressions for priority products.
Make Informed Decisions, but Remain Flexible and Vigilant
There’s plenty you can do ahead of time to anticipate the products that will yield high return and help you achieve your marketing goals. Look at data from the target period the prior year. Examine trends on your retail site and throughout social media. Fill out your predictive strategy with simple common sense: Tank tops are unlikely to sell as well as fleeces during late November and early December.
Like the surf, though, you cannot fully predict trends in consumer behavior. As trends emerge, react as quickly as possible. Do your best to set a coherent strategy ahead of time, but do not cling to preconceived notions any longer than you must. Wherever possible, check return, spend and revenue volume on an intraday basis, and shift budget to capitalize on unexpectedly favorable days.
Cut your losses on products, categories and brands that you expected to deliver high return but ultimately prove less popular than in prior seasons. Conversely, be prepared to aggressively promote products that emerge out of the ether to contribute healthy ROI to your marketing programs. Keep an eye on categories, brands, and individual products that are outperforming the average on your retail site, and shift bid priority and budget toward those products. Again, make sure that such products are represented granularly in your Google Shopping Campaigns.
Thoroughly Audit Your Channel Accounts
Pre-Q4 is a great time to do a deep-dive across your retail marketing programs. A large product catalog across many channels amounts to thousands of bids, keywords, pieces of ad copy, and business rules operating on your product content. It is very easy for outdated or unintended campaign elements to get lost in the shuffle, especially as new products enter your product catalog. Conversely, make sure that products entering your feed receive the proper treatment with respect to bids and promotional copy. Strive to audit all these facets of your marketing efforts, as missed details can limit exposure of high-demand products and contribute high spend on subpar products.
- Paid Search: Make sure all your match types make sense. Carefully consider how your keywords play off one another and direct traffic among ad groups. Take a look at all negative keywords and make sure you aren’t hanging on to legacy negatives that no longer serve your strategy. Lastly, be sure to set up ad groups and keywords that reflect all new entries to your catalog during Q4: brands, categories and individual products. Take a look at an ordered list of bids, and make sure that outliers at either extreme still make sense.
- Product Ads: Most of the paid search best practices also apply to product ads. Additionally, make sure that new brands and categories entering your catalog are represented as granular product groupings. Make sure that your campaign structure methodology extends to all new products entering the feed.