In its second annual peak season survey, Ware2Go, a UPS company, found that 73% of small and mid-sized merchants expect higher holiday sales compared to previous years.
One result will be promotional. According to Ware2Go, 84% of merchants will establish more robust promotional calendars, with longer sales cycles identified as a tactic by 52% of survey respondents, steeper discounts by 39% and earlier promotions by 28%. The five most popular options retailers are considering include new customer discounts, by 57%, Black Friday/Cyber Monday deals, by 47%, loyalty program perks, by 41%, free gifts with purchase, by 32%, and free shipping, by 32%. As merchants compare their inventory to forecasts, they will adjust their promotional calendar to optimize holiday sales, without compromising on margins, the report stated.
Beyond promotions, half of merchants responding to the survey plan to unveil new deal days, coupons or promotions to entice purchasers, Ware2Go noted. The success of events such as Amazon’s Early Access Sale last October throws a spotlight on the consumer appetite for early-season deals while evincing opportunity for merchants to gain sales traction as the holiday season approaches.
About 20% of merchants surveyed said they plan to provide an economy shipping option this year, Ware2Go maintained. Already, 95% of merchants have added at least one delivery option in response to growing consumer expectations for choice. Options include free shipping, preferred by 47% of retailers, 1-2 day delivery, by 37%, free returns, by 39%, real-time tracking, by 37%, in-store pickup, by 36%, and the ability to choose delivery date, by 32%. The results reflect previous Ware2Go’s research findings that consumers prioritize greater control, personalization and lower costs when choosing their shipping options.
Although they want to attract new shoppers, merchants want to nurture relationships with existing customers as well via loyalty rewards, employed by 59%, re-engaging dormant customers with new product features and personalized promotions, by 45%, and incentivizing earlier purchases with early limited-time offers, by 41%.
Still, retailers do want to attract new customers in the holidays with first-time purchase discounts, fast and free shipping, or free gifts, at 57% of survey respondents.
Even if it is less of an issue than it was a year ago, 73% of merchants Ware2Go surveyed acknowledge having too much inventory. So some merchants surveyed intend to offload current inventory, at 33%, and old inventory, at 34%, during the holiday peak season.
Among its other suggestions to retailers, Ware2Go emphasized that, with consumers shopping on more retail marketplaces than ever before, having a multi-marketplace strategy is vital to engaging with both new and existing customers. It asserted that, by regularly analyzing demand forecasts, merchants can be more strategic with promotions, prioritizing excess products and those that cannot be sold at full margin.
In announcing the 2023 Peak Season Prep report findings, Ware2Go CEO Steve Denton said, “For many merchants, peak season accounts for 30% or more of their annual revenue, however, with industry uncertainty amid the 2023 peak season, merchants must implement a reactive sales strategy. To counter the unknown, data and agility will be merchants’ greatest resources. While regular analysis of demand forecasting informs shifts in promotion strategies, merchants must ensure that their fulfillment partner is able to quickly pivot and successfully adapt to changes in sales volume. The 2023 peak season will be unlike any other, challenging the retail industry to remain dynamic in their approach across the season.”
