Capitalize on these 2020 learnings to succeed in the new year
After major shifts in 2020, what can the retail industry expect in the new year?
Insights from our Client Success Team offer some clues. This group worked closely with Affirm’s retail partners to maximize revenues during a rollercoaster year. Here are 4 strategies they identified that can help you make a profitable impact in 2021.
Get your digital infrastructure in order
Shoppers drove explosive e-commerce growth in 2020 due to the pandemic, and experts predict that growth will continue. But the surge in online traffic overwhelmed some retailers because their digital infrastructure wasn’t up to the task.
To avoid sales losses from an outage, make it a priority in 2021 to ensure your digital basics are solid, said Will Heidrich, Director, Client Success at Affirm. He suggested stress-testing your website and e-commerce platform to make sure they can handle traffic spikes. Making sure your site is optimized for mobile display and sales is also essential—54% of e-commerce sales in 2021 are expected to be made on mobile.
“Getting your digital house in order is table stakes for all merchants now,” he said. “This will set you up to cash in on the growing e-commerce and click-and-collect trends. After all, you won’t be able to collect if your customers can’t click!”
Expand with a subscription model
The decrease in store traffic from the coronavirus crisis has forced merchants to find new ways to keep in touch with customers. Adding a subscription option to your product offerings can keep your business relevant and nurture relationships with customers.
Leslie Quijano, Senior Client Success Associate, recalled how many parents bought swimming pools to keep their kids active when after-school programs and summer camps closed. “Why not offer those parents a subscription for cleaning products, covers, and other accessories throughout the year?” she asked. The same strategy could work for sellers of vacuums, air purifiers, and kitchen appliances to build a cycle of repeat purchasing.
“Instituting a subscription model can also help you plan and manage inventory in a predictable way throughout the year,” she said. “Take a page from the playbooks of many fitness companies: Subscriptions are a great way to keep customers coming back to you, building loyalty for your brand.”
Explore collaborative marketing and bundling
Product bundling is succeeding with online shoppers as they seek more convenience. Curated bundles can quickly show shoppers what an ideal combination of products looks like and—in the case of multi-brand collaborations—reduce marketing costs for merchants. A great example is Zwift, a virtual cycling platform that often markets its software with compatible training equipment from Wahoo Fitness or Stages Cycling, among others.
“This is a cool way to market the whole experience of your product—not just focusing on the item or service itself,” said Cat McGuire, Client Success Lead. “This could work for all sorts of different home segments, like pairing high-end furniture with sound systems. It could be a great customer acquisition strategy that benefits each brand.”
This strategy also leads to increased cart sizes, especially within a brand’s own product suite through strategic merchandising. McGuire cited this example from Floyd showing how its furniture pieces work together to transform living or family rooms, where most of us spent more time this year. This display can inspire shoppers to buy more than just the couch that sparked their interest.
Get creative with your promotions calendar
In retail, any day can be a holiday. Amazon Prime Day and Alibaba’s Singles Day paved the way a few years ago. This year more retailers staked out customized “holidays” that built anticipation with shoppers and unleashed buying bursts.
“Merchants used to follow a distinct schedule for sales and promotions, but after this year all bets are off,” said Mary Galanis, Client Success Lead. “You can now create special occasions for promotions. While this may have begun out of necessity—like selling surplus inventory because stores were closed—these ad hoc holidays have worked for so many retailers and are here to stay.”
She expects more merchants will leverage strategic occasions in 2021 to create buzz and offer deals. These events are also opportunities to offer interest-free promotions with Affirm, which make great alternatives to discounting. And with a majority of shoppers interested in using a pay-over-time option like Affirm in 2021, offering such a promotion could bring you new customers. (Learn how Affirm can increase sales for your business.)
Whatever strategies you use to increase revenues in the new year, we wish you a safe and successful 2021!