As we head into the second half of the year, brands and retailers are starting to shift their focus to online festivals. Since digital commerce being the number one driver of global growth, it will be vital for brands to take advantage of these significant shopping events to make up for lost sales due to COVID-19. With many specifically eyeing Amazon’s annual Prime Day event as a critical opportunity for win-back in H2, the question of how to maximize ROI during these sorts of promotional events is rightly at the top of mind.
As the trend towards digital retail continues to grow, retail sales events will also become increasingly more important. For example, during Alibaba’s Single’s Day, a brand’s sales during a single day could exceed $1B, making their event trading performance critical for annual targets. This event is only getting bigger, as it is expected to grow to $50B in 2020 and $80B by 2024. Furthermore, the US and China will secure their positions as the two largest ecommerce markets by 2024, with China forecasted to have $2,400bn and the US $976bn.
We’ve also seen changes occur for the two major operating models, pureplay and omnichannel, as they will dominate the future global ecommerce landscape. Both platforms, pure-play and omnichannel, have seen changes during this pandemic and Amazon has really separated itself from the competition during this time. Playing an essential role in providing access to the supplies and necessities vital to daily lives.
Amazon has moved Prime Day to the fall to give time to get stock in place but has also announced a softlines focused summer sale to help apparel brands.
Shopping periods of these magnitudes require an enormous amount of planning and knowledge of the competitive landscape. Being aware of the competition and knowing your position in the market is going to ultimately help you increase your top-line performance. It’s not enough anymore to merely put a deep discount on an item, but at Edge by Ascential, we are here to help you navigate these big shopping days so you can get the most out of your efforts. Below are a few areas we recommend you look at to prepare:
Promotional Type: What type of promotion works well for your category? Does it make more sense to bundle or use a lightning deal? Understand what your competitors are doing and see how their promotional strategy is moving the needle with our Promotions Scorecard in Market Share 2.0.
Deal Priming: Once you know what type of promotion you want to run for the big sale you need to make sure it can break through the noise by ‘Deal Priming’. Deal Priming is when you slightly discount or promote the item before the big sale is coming up. This will allow the item to get traction and be worthy of promoting during such a high traffic time.
Depth of Discount: It can be tricky trying to price an item before a massive sale if you don’t know what your competitors are planning since you want to ensure you are pricing competitively. Taking a look at pricing historically can give you an idea of what type and depth of discount they will run this year. For example, you see that your competitor typically runs a 30% discount on their item then you can expect something similar this year. We recommend matching or going deeper if possible to be competitive on the item.
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