November 23rd, 2021 | 6 MIN READ

Digital Readiness: How Your Ecommerce Brand Can Succeed This Holiday Season and Beyond

Written by author_profile_images Ted Rogers

Ted Rogers is the Chief Marketing Officer at Digital River. He served first as vice president and general manager of MyCommerce, then vice president of global expansion and fulfillment operations, and vice president of strategic marketing before being named chief marketing officer. Ted has an extensive background in ecommerce and marketing management, serving as a marketing executive in the industry for over 20 years.

The 2021 holiday shopping season is expected to be a record breaker. Retail ecommerce sales are projected to increase nearly 17% this year and reach roughly $4.9 trillion. But capturing market share and exceeding the expectations of shoppers beyond this season will require brands to overcome a number of persistent challenges. Ongoing supply chain issues, continued disruption from the pandemic, worker shortages and consumer habits that have changed forever have forced ecommerce brands to operate in new ways in 2021. And these challenges aren’t going away anytime soon.

Brands that have planned well and strategically stocked inventory, tested technology systems and worked closely with their partners will be positioned to succeed for the long haul. Here’s what you need to keep in mind to set your ecommerce brand up for success beyond the holiday season.

Plan for new consumer behaviors:

The events of 2020 changed the world, but by some measures, that may actually be a good thing for ecommerce brands. Not only did online shopping get a boost when physical stores were closed, but consumer behaviors appear to have changed for the foreseeable future. According to McKinsey, 75% of consumers have tried a new shopping behavior since the pandemic began.

Social commerce – the use of social networks to promote and sell products and services – is gaining significant ground in particular. Social buyer penetration in the U.S. is expected to hit 36% in 2021, which would rank second only to China, where 46% of internet users are expected to purchase through social networks. Ecommerce brands should consider how social commerce fits into your overall marketing strategy and how you can more authentically engage with consumers on their preferred platforms.


Baby boomers are also more active online in 2021 after contributing significantly to higher ecommerce holiday spending in 2020. Overall, studies show 47% of boomers have increased their digital spending since the beginning of the pandemic.

Across all demographics and geographies, sales are expected to rise during this holiday season and into next year. Understanding who your customers are and how they behaved throughout this year will be critical for achieving long-term success.

Manage expectations for fulfillment:

Supply chains continue to be in turmoil around the world, with many brands facing delays in getting physical goods to market. Walmart and Home Depot have reportedly chartered their own ships to try to cut shipping times for goods coming from Asia. As prices rise, U.S. retailers are expected to spend $223 billion more this holiday season than last year on freight, manufacturing, and labor.

It’s more important than ever for brands to proactively engage with fulfillment partners and build out a cross border fulfillment infrastructure that is as reliable as possible. With supply chain issues expected to extend well beyond this holiday season, here are some other things brands can do to position themselves to ride out future volatility:

  • Use data to intelligently predict consumer behavior and prepare for surges in demand for different products and locations
  • Minimize returns by giving shoppers an overload of information such as product images, comparison charts and reviews
  • Brands that don’t have physical stores can simplify reverse logistics and improve the customer experience by partnering with third-party drop-off sites for returns

Throughout the holidays and beyond, the most important thing brands can do is communicate clearly, effectively, and transparently with customers. It may be too late to establish all new shipping partners. But you can help customers manage expectations and work diligently to foster a positive experience and build relationships despite any challenges that may arise.

Looking ahead, consider building out a deep network of carrier partners to create strategic redundancies, increase efficiencies and reduce delays.

Localize marketing to make real connections:

To capture sales, marketing materials and consumer-facing communications need to be truly localized for every new market you enter. Simply translating old assets into the local language won’t be enough. You need to capture the nuance of the local culture as much as possible to foster genuine connections with new customers. You will also need to localize your promotions calendar to reflect the preferred holiday shopping seasons in that market as various cultural traditions can impact sales.



 

Another thing to keep in mind is that different regions of the world and within the U.S. continue to offer varying responses to the ongoing pandemic. This means customers in one part of the country may be experiencing a very different situation than others. As much as possible, take this variation into account when devising your marketing strategy. Make sure communications are appropriate for the current situation in the target market.

Build strategy into payment processing:

Payments are central to ecommerce success. Brands should strive to optimize not only the payment method options they offer during checkout, but also the back-end systems used to process payments and their overall payments strategies. Consider which payment methods resonate with your core audience and whether investing in some of the following concepts could boost sales:

  • Digital Wallets – Digital wallets accounted for 44.5% of ecommerce transactions globally in 2020 and are expected to continue increasing in popularity in many markets.
     
  • Buy Now, Pay Later – Throughout the world, this payment method is quickly becoming a preferred way to pay. For example, 10.4 million people in the U.K. used a buy now, pay later option while shopping online in 2020.
     
  • Direct Debit – Most popular in Europe, where this payment method accounted for 4% of ecommerce sales, direct debit is expected to grow in popularity around the world.
     
  • Shopping from Smartphones – Customers in developed and emerging markets now expect optimized mobile shopping experiences that allow them to use their preferred payment method via smartphone.

Take time for taxes:

Many brands are looking to expand their operations into new geographies and take advantage of the increase in online shopping to reach new customers in new markets. But this also brings a host of tax questions as each new jurisdiction you sell into has its own set of tax laws and requirements.

For example, tax remittance processes vary by country in the E.U. because each member state sets up its own systems based on the bloc’s wider tax directives. In the U.S., more than 43 states have enacted economic nexus laws that say ecommerce vendors need to charge sales tax once they reach certain sales volumes or revenues.

All of this variability, and the inherent complexity of tax laws in general, means brands need to have a robust strategy in place for managing tax obligations. Consider how partners and external vendors can help simplify processes around tax calculation and remittance.

Finding a partner who acts as your merchant of record allows your brand to launch into new markets faster and easier. You won’t have to spend time investigating local tax laws and building out internal systems to manage taxes and other legal responsibilities. Your partner can take on the tax burdens so you can focus on delivering a seamless shopping experience for your customers.

The spirit of the season:

Many retail brands depend on the holiday season for a significant portion – or even a majority – of their annual sales. In 2021 and into 2022, brands may see an even bigger and more prolonged spike in sales as experts say many people are ready to “revenge spend” due to pent-up demand and excess savings. Brands that are ready to capture that spend with thoughtful planning and robust strategies that simplify ecommerce will do well this season and beyond.

 

Share on