How to Prepare Stock Levels for Cyber Monday Demand
How to Prepare Stock Levels for Cyber Monday Demand
Cyber Monday has become a massive sales juggernaut, pushing multichannel ecommerce companies into the black the same way that Black Friday works for brick and mortar store. Of course, there are many blurred lines here. Black Friday has become as popular online as off, and Cyber Monday has evolved into a major mobile sales day, too.
TechCrunch reported that 2018’s Cyber Monday saw $2.2 billion in mobile sales over 24 hours, with a total of $7.9 billion in sales, equating to almost a 14% increase over 2017 numbers. 2019 is expected to be an even bigger event. For multichannel ecommerce companies, that means one thing – you need to get your stock levels in hand so you’re prepared for that massive rush. How do you do that? Let’s cover some important tips.
Know What Is Going to Sell
Let’s be clear here. No retailer, whether online or off, can forecast what will sell and what will not with 100% accuracy. That doesn’t mean that you’re limited to random guesses, though. One way that you can get a more accurate idea of what will sell this year is to study what sold last year. With a central inventory management system, you will have access to sales numbers at a glance, allowing you to hone in on what was hot then, and allowing you to iterate based on that information.
Other ways that you can determine where customer demand will be include following consumer demand trends within your specific industry. For instance, if you’re in the automotive industry, your customers might demand a new brand’s performance muffler. If you are in the home and garden space, your customers might demand infrared grills designed for outdoor use.
You’ll need to keep your finger on the pulse of your industry, and rely on your own observations and interactions with customers rather than marketing hype from manufacturers. You might even consider polling your customers to determine what new items they might be most interested in and then tailor your inventory to match.
Know What Items You Are Going to Promote
You need to determine what items will be discounted well before Cyber Monday rolls around. In fact, we would recommend establishing your promotional items several months ahead of time. Not only will you need to determine what you’ll be putting on sale, but you’ll need to decide just how much of a discount you’re going to offer and if there are any hoops your customers will have to jump through to take advantage of those savings. The best recommendation here is to keep things as simple as possible.
Limit the number of sales that you run, and keep any promotions simple. Offer an in-demand item for a specific percentage off, and then tie that into other site-wide promotions. For instance, if you are selling an aftermarket exhaust system at 50% off, you want your customers to find that your entire stock of aftermarket exhaust components is actually 30% off, encouraging them to browse and buy more than just the one item.
Bundle for Better Results
Bundling is not a new concept for multichannel ecommerce companies. However, the practice can offer some big benefits during Cyber Monday, so long as your inventory levels are good. Bundle items together that customers would usually need to buy at the same time – an HDTV, a couple of HDMI cords, and a power strip, for instance. Or, you could bundle an aftermarket muffler, exhaust hangers, and exhaust tips for a single price.
Bundling allows you to sell multiple items at once, delivering more value to your customers, but also increasing the average sale amount. The trick here is to accurately forecast demand so that you can ensure you have enough stock to handle things. Otherwise, you’ll end up with out of stocks and delayed orders, which will only irritate your customers.
To prepare your inventory for Cyber Monday, know what will sell by following consumer demand. Consider bundling and sales tactics, and then plan your promotions accurately. If nothing else, the FTC offers a handy guide about compliance with the Mail, Internet and Telephone Rule that offers additional tips to help.
Automation — Work Smart, Not Hard
When time is money you don’t want to waste a single second. Especially when you only have one weekend to give your customers everything you can.
There are pretty major inventory fluctuations during the holiday season. If you are drop shipping as opposed to stocking products, items with hundreds in stock yesterday may be back ordered today. When you have multiple distributors and are simultaneously trying to enhance product information, list new products, process orders, and update inventory across every platform – well, something has to give.
Today’s multichannel e-commerce solutions, such as SureDone (OK – we have to plug ourselves at least once), will connect to distributors on a frequent basis, pull down the latest inventory information and then update all of your products across all of your channels automatically. We can’t stress how important this is to ensure your stock levels are as accurate as possible.
The last thing you want is to oversell a product. Well, maybe not the last thing, but when you can’t deliver a product bought by a consumer through a marketplace it can affect your seller metrics, which in turn can affect your placement in search results across all of your products. If you are relying on distributors for fulfilling orders you are at their mercy to ensure their stock levels are appropriate to the volatility that can be so common during the Black Friday and Cyber Monday holiday season. For popular products, or products with manufacturer incentives during this season, you should consider setting an inventory buffer to minimize the opportunity to oversell.
What do we mean by this? As an example, widget abc is a popular product. Your distributor has 18 of them in stock. You may want to set a buffer of 10 and only list availability of 8 (the 18 in stock minus the buffer). This will reduce the chance that if the product sells quickly, you won’t sell more than the distributor has on hand. The less frequent inventory updates are (some distributors will only update automated stock files once per day), the higher the buffer should be on popular products.
You should leverage your multichannel ecommerce software to automatically set these stock buffers for you.
… While Creating Urgency
At the same time, if your distributor has 5,000 units of a product in stock, buyers may feel they can wait before they order the product. There is no sense of urgency on their part. However, if you show that there are only 4 of these products in stock they will be more likely to buy the product immediately. As a matter of fact, marketplaces like Amazon will actually highlight when there are only a few units of stock left for certain products – further increasing the level of urgency.
Multichannel E-Commerce software should be able to manage these “max stock” levels for you and automatically replenish stock, based on stock on hand or available through distribution, as products are sold.
Bringing it all Together
Setting yourself apart from your competitors through discounts and bundles will help increase sales and differentiation, but you need to make sure you understand the availability of all pieces and parts to an offering. At the same time, using controls to both minimize oversells and increase buyer urgency are important on Cyber Monday. Regardless of whether the holiday season is a few months away or right around the corner, planning your approach to increase your revenues is critical.