As consumers, as retailers, as affiliates – it seems we can’t escape from the conversations of stock warnings impacting retailer fortunes during the industry’s ‘golden quarter’.
Out-of-stock items are currently up 172% from Jan 2020, according to a recent study from Adobe. To put the current situation into perspective, insight from the Guardian shows major UK retailers reporting stock levels at their lowest since 1983.
Analysts have pinned the issue to labour shortages across everything from shipping to manufacturing. Originally cited by Forbes, the availability of truckers against the estimated demand for their expertise is currently at around 1:8 thanks to the lingering impacts of COVID and Brexit.
With Black Friday on the horizon, retailers have spent weeks pondering the suitability of flash sales designed to deplete their warehouses. Is it right to discount during Q4? Considering this is often the best time to convert new customers, it would be foolish not to, but with several guardrails to consider. Allow us to explain.
The new customer landgrab
If Q4 is good for one thing, it’s getting new customers to buy with your brand. Events like Black Friday see millions of shoppers looking for deals and discounts before finally making a purchase. As such, many shoppers will gladly accept competitive offers from retailers they’re visiting for the very first time.
Targeting new customers won’t solve your stock issues but it will restrict your promotions to a much smaller audience. Having that extra level of control allows you to capitalise on events like Cyber Week by instilling urgency among a group of shoppers that could eventually become frequent buyers.
Indeed, focusing your incentivisation strategy on new customers is a big step in the right direction, but only if you have the technology to show and hide different offers depending on purchase history. A failure to do so risks alienating your brand loyalists who will soon grow tired of seeing promotions they can’t redeem.
For more information on how to show and hide different offers based on real-time data when customers land on your site, click here.
Transparency over stock levels
Our industry loves transparency and we at RevLifter love it too, especially when it comes to giving customers more information on what they’re browsing.
Plugging in real-time data from your warehouse is a great way to advertise which products are running low and out of stock. Many fashion retailers have found their own way around advertising product scarcity through solutions that highlight ‘hot’ or ‘trending’ items before certain sizes run out.
Of course, it might not be the best time to discount on the items that are running low, as the warning can create an opportunity to drive a full-price sale. Instead, the discount should focus on products that are in healthy supply, delivered via tailored product recommendations that align with the customer’s cart contents or preferences.
For example, we regularly hear from fashion retailers that want to sell more accessories. Q4 should be an opportune moment for these brands to raise average order values (AOV) by cross-selling customers when they’re ready to check out with best-selling items.
Alternatively, you could always point customers to the products that are in stock, even if it means earning slightly less on the sale. Perhaps products from your own brand could be suggested as replacements for out-of-stock items belonging to other retailers?
One final tip on using real-time data for transparency – if you’re worried about customers assuming the worst when it comes to delivery times, why not call out an accurate date? This could be the exact reassurance that your international shoppers might need to make a purchase.
If you still see customers abandoning their cart when calling out the estimated delivery date, you could always use a personalised incentive to meet them halfway and prevent a lost sale.
Delayed eGift cards
We get it – even tactical discounting isn’t for everyone. If you’re really looking for a voucher-free Q4, here’s a trick that should drive more sales without putting pressure on your warehouse.
Recently, we’ve been enjoying great success with campaigns that use time-delayed eGift cards instead of discounts to push demand forward to a period where stock lines are likely to be deeper.
In a typical scenario, the customer sees a promotion offering a £10 eGift card with certain orders. Once they’ve made their purchase, they receive their digital reward via email once the return window has passed. The use of automation makes it possible to trigger the eGift card on a date that represents a quieter time for sales and therefore a much better period to increase demand.
For more information on delayed incentivisation strategies, click here.
With mass discounting looking highly unviable for Q4 2021, retailers will have to find ways of cueing up demand in the right areas.
Controlled incentivisation looks to represent the best move forward, albeit one requiring much more consideration than the “20% off sitewide” promotions that made events like Black Friday so compelling for retailers and shoppers alike. Nevertheless, there’s still time to explore quick-to-implement strategies that drive sales where they can actually be fulfilled.