Mark Runacus, Co-Founder and Planning Partner at Wax/On introduces the considerations brands should be aware of as we move into Peak festive season.
There is evidence that Christmas 2020 should be a bumper one for e-commerce retailers. It is already a highly competitive landscape, and those e-tailers who have taken the necessary steps are most likely to profit. ‘Peak’ as it is known, will also happen earlier this year because consumers have learned from their first lockdown experience that they cannot trust stock levels and delivery, which immediately speaks volumes about the importance of just getting the basics right. And don’t forget those basics include simple Click and Collect and effortless Returns.
I’m privileged to work with a number of ecommerce retailers and DTC brands, and in this article, I share some of the insights and learnings we’ve uncovered together in the run-up to Peak 2020.
The first major indicator for me was when all Ocado’s Christmas delivery slots sold out ten weeks in advance. This behavioural nugget says that traditionally high-spending middle-class UK consumers, already disappointed and despondent that they won’t be able to enjoy their traditional Christmas largesse with a wide group of friends and family, are reluctant to do a lot of cooking for a smaller group, and are instead getting Ocado and M&S to do it for them. These quality and convenience-first consumers certainly don’t want to get caught up in any last-minute December (hopefully!) high street social distancing and queueing.
So, Peak will be earlier. Be prepared. Beyond Ocado’s audience, in the current climate, other consumer segments will be seeking demonstrable value. Not only are more consumers shopping online, they are also doing more shopping around online. So, don’t expect the same levels of loyalty as in previous years. If you get the formula right, you’ll have more new customers this season, but your average order value may go down as a result. Be prepared to work harder for longer to drive up AOV, LTV, and ROI.
Here are some other important considerations my clients and I have discussed:
Because consumers are shopping around more this year, your Purpose could tip the scales in your favour when they make that final purchase decision.
Mark Runacus
In a recent survey of e-commerce businesses in the US and UK, 33% said they were opting out of Black Friday and Cyber Monday promotional activity this year, versus 6% in 2019. Here in the UK, 84% of Which? members said they were not planning on buying anything in the Black Friday sales. Which? had tracked the prices of 220 home and tech products advertised as “Black Friday Deals” in 2019 across Amazon, AO.com, Argos, Currys, PC World, and John Lewis for six months before and after the event. They warned their readers that 85% of the products were the same price or cheaper at other times of the year. And Techradar reported that they were seeing fewer Black Friday deals hitting the metaphorical shelves this year, compared to the US.
We’ve been distanced from some of our loved ones and friends for eight months. To compensate for this we will probably want to put more thought and emotion into our gifting this year. That means consumers will care less about the perceived value of a gift and instead care more about what the gift says about our relationship and connection. This is an opportunity to give a little more prominence to your brand story and your Purpose. It won’t be a primary driver of sales, but because consumers are shopping around more this year, your Purpose could tip the scales in your favour when they make that final purchase decision. Tell your authentic story, and partner with like-minded brands and organisations that share your values. Beyond COVID, Deloitte remind us that Purpose-driven companies win more market share and on average grow three times faster than their competitors, all while achieving higher customer and employee satisfaction.
You should really dial up the celebratory tone of your marketing this Christmas to resonate with your target audience.
Mark Runacus
On a similar note there’s evidence to suggest that you should really dial up the celebratory tone of your marketing this Christmas to resonate with your target audience; 43% of UK consumers think this Christmas will be more important than ever. And as we face the prospect of remaining apart to some extent, what can you do to give the sense of bringing your customers closer to their loved ones? In recent focus groups I moderated, consumers had high expectations of personalisation this Peak.
Consumer behaviour known as ‘the lipstick effect’ was identified first in the beauty industry when shoppers felt the need to treat themselves a little in tough times. Leonard Lauder of Estée Lauder first coined the term back in 1981, when he noted that his company’s lipstick sales were inversely correlated to the economic cycle. This Christmas we should expect to see more of this as lockdown-weary consumers feel the need to treat themselves at the same time as buying gifts for loved ones. How can you bundle up your products and services into value packages to take advantage of this opportunity? How can you subtly show that part of the bundle could be for the person giving the gift?
The physical shopping that does take place this peak is much more likely to be done locally.
Mark Runacus
Assuming that some non-essential shops will reopen in December, the physical shopping that does take place this peak is much more likely to be done locally rather than in larger town and city centres. In fact 46% of consumers have said they will shop locally this Christmas. And 57% of people said that once restrictions were lifted, they were more likely to spend money at a business that offers locally produced products than they would have done before. So, if you only have an online presence you can share this mentality by stressing your own community engagement. And if you’re a larger organisation trading online and offline then you should be heavily promoting your local Click and Collect options.
If your brand is favoured by older consumers, then you should already have seen more of them move online simply because lockdown has dramatically accelerated their digital adoption. In July, researchers Mintel found that 43% of over 65s had shopped more online since the start of the crisis. Think about this age group as a specific audience in terms of their unique needs and ensure their customer journey and user experience is an effortless one.
I do hope Peak 2020 is a successful one for you. Above all I hope the holidays bring us together, in whatever ways we can find. So, here’s wishing you a healthy, happy and prosperous festive season and beyond.
Visit Wax/On's profile to download the full report, The guide to a bumper e-commerce Christmas
Mark is Co-Founder and Planning Partner at creative agency Wax/On. Previously Mark was an owner of Karmarama, then one of the UK’s largest independent creative agencies, and now part of Accenture Interactive. In his 30+ year advertising career he has worked both agency and client side across all categories. He was awarded an MBE in the Queen’s 2019 birthday honours list for his services to advertising. His career started in direct marketing and Mark became a CRM and loyalty specialist before moving into general advertising. Mark is a former Non-Executive Chair of the Data & Marketing Association. Mark champions inclusion and diversity in the advertising sector in his role as Chair of Outvertising, advertising’s LGBTQ+ advocacy group. Volunteer run and not for profit, Outvertising works with brands and their creative and media partners for more positive LGBTQ+ inclusion in all paid media, and fights for a prejudice free creative working environment as part of a joined-up inclusion and diversity strategy.
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