Peak on Peak

It’s not just about Q4 anymore.

Peak is a word invested with particular significance in the retail realm. It evokes anticipation, success—and conversely, apprehension, perhaps even some fear. That’s because it can make or break a store or brand in a matter of three months.

Sophie Wilson
Digital Consultant for Astound Commerce

In simple terms, Peak is Q4—the months from October to December, the busiest time of the year for retailers and the period that generates a major portion of annual revenues. It is exemplified by Black Friday, that post-Thanksgiving day when retailers discount their goods to the bone, luring throngs of customers to their outlets and kicking off a sustained round of buying that lasts until Christmas and puts everyone into—well, the black.

That’s the hope, anyway. And usually, it’s an aspiration that’s fulfilled. But it can be tough—even fatal—when Peak doesn’t deliver. That’s why many retailers spend most of their year obsessing about Peak. As analysts from the Push Group have noted, the savviest retailers devote an average of 109 days preparing for the holiday season, while 52 percent of multichannel retailers finalise their Black Friday plans in July.

But things are somewhat different this year. The COVID-19 pandemic has accelerated the decline of brick-and-mortar, but pumped up ecommerce to a stunning degree. Multiple verticals posted demand in spring and summer that matched Peak order volumes. In other words, Peak has been extended. For many retailers, Peak 2020 includes Q3—even part of Q2. 

So Q4 is no longer truly Peak; it could be more accurately described as Peak on Peak, a situation that is likely to prevail well beyond the pandemic’s end. High-volume ecommerce orders are almost certain to continue in the post-pandemic world, and retailers need to up their game if they want to remain competitive, meet customer demand—and reap their proper share of the revenues.

Upgrading Your Ecommerce Assets

The first imperative, then, is robust investment in digital technology and teams. This isn’t a time to scrimp. The quality of your ecommerce platforms—their attractiveness, responsiveness, resilience, ease of use—will very likely determine both your immediate and long-term success. Digital platforms can no longer be viewed as an adjunct or substitute for stores—in this new retail world, they are stores. People want to linger, they want to browse and interact when they shop—so to keep your Peak peaking, maximise your virtual and video-etailing options. Retailers and brands must make the virtual truly real for their customers. That takes cutting-edge technology and talented people. Suboptimal sites will result in high bounce rates, high customer care volumes, and missed retention opportunities.

Next, as Steve Jobs once put it, “think different.” Reject traditional volume forecasting methodologies. They were of little use during the lockdown due to the unexpected crush of high-volume orders, and they are unlikely to regain value in the coming months and years. 

Timeframes for useful information have contracted drastically. Logistics stakeholders must communicate daily with broader ecommerce teams. As Brian Bourke, the vice president of marketing for Seko, has said, “If you’re not getting daily updates, you really need to demand it.”  

That applies particularly to customer data, which must be scrutinised on an ongoing basis. A key differentiator between traditional Peak and pandemic Peak has been the influx of new customers and the development of new consumer segments—for example, customers deeply unfamiliar with online shopping forced to take the plunge due to the coronavirus. Websites must anticipate such “newbies,” and ensure they feel welcomed and unintimidated. To ensure good UX, retailers must devote time and resources to optimising UI, duplicating the in-store experience as much as possible. Companies that have been able to accomplish this feat during the pandemic Peak have done well, and will be in pole position relative to their competitors when COVID-19 finally dissipates. 

Digital teams must also reassess pre-pandemic stock and Christmas discounting strategies, given that commerce has moved heavily online. What’s left, and what needs to be pushed? Indeed, adroit action on stock inventory is more important than ever. Sitting on excess inventory during traditional Peak often required deep discounting, and retailers employed diverse strategies to minimise impacts on both immediate revenues and customer willingness to purchase full price in subsequent months. The desperation to move units, after all, can lead to a permanent discount mentality among consumers.

Such inventory concerns now apply outside traditional Peak timelines, and solutions are not always easy to identify. One of the biggest challenges during lockdown has been product availability. As retailers have found to their dismay, nothing irritates an online customer more than an “out of stock” notice. Excess inventories can cause retailers pain, but dissatisfied customers can result in lasting trauma; customer loyalty is hard to win, easy to lose. 

Retailers who prepare early will reap significant benefits. An example: Space NK put together unique birthday sets to move excess inventory. That strategy could be profitably applied to Black Friday, with exclusive pre-packaged bundles ready to ship. Such an approach streamlines warehouse procedures by reducing the “pick” step, and also provides a USP, increases AOV, and bolsters overall product margins. Other good inventory strategies for Peak on Peak: pushing online-only gift cards ahead of traditional Peak to boost demand without the immediacy of dispatch, and using pre-orders to better predict demand and avoid excess inventory.

Incentifying the Post-Pandemic Consumer

The COVID-19 era has changed the way consumers think in fundamental ways, and digital teams must adjust their customer care tools accordingly. Loyalty programs, live chat, personal shopping, and same-day tracked delivery are no longer just applicable for luxury goods—increasingly, customers are demanding it for all verticals. Warehouses and staffing must be configured to support the expanding ecommerce paradigm, and relevant payment partners must be sought to encourage quick and easy conversion.

So where are we right now? Despite the recent re-opening of many stores and a subsequent partial cooling for ecommerce, Black Friday is liable to be muted this year; the coronavirus still looms large. COVID-19 economic uncertainty—compounded by Brexit—could lead to holiday belt tightening. Ongoing mask and social distancing requirements should reduce footfall—but result in another digital sales spike. More good news: digital models have been stress-tested over the lockdown, and retailers are better equipped to anticipate and handle various “what if” scenarios.

Certainly, the big players have gotten the ecommerce message. Speaking to Reuters, Google Cloud executive Carrie Tharp noted that the company has scrapped its usual growth models, and “is preparing for record traffic and therefore revenues.” Given that many retailers (including Kohl’s and Wayfair) use Google Cloud to power their online operations—and typically query months in advance of the holidays to ensure servers can handle anticipated traffic spikes—Tharp’s statement is reassuring. 

In 2019, more than 40% of shoppers did most of their Christmas shopping in November. But a YouGov survey found that 41% of 2020’s consumers have made plans for major purchasing before the second week of November. This earlier shopping strategy could result in staggered spending. 

The 2020 Holidays: Apprehension—and Opportunities

As we move toward the holidays, some significant unknowns remain. Will customers buy now to gift later? Will they order earlier to account for shipping delays? Will they spend less? Which markets will benefit—the same verticals that prospered during lockdown, or different ones? And finally: will consumers wait until the last minute to buy, anticipating continued deep discounting? 

The best way to engage these uncertainties is to analyse customer desires. The top contender in the “want” hierarchy has been shaped in large part by the COVID-19 crisis: speedy delivery times. To achieve this, Salesforce recommends moving inventories close to the sources of demand; orders should be filled in hours, not days. A subsidiary benefit to customer satisfaction: merchandise turns faster, enabling better demand forecasting. Consumers are also allured by free delivery, though each retailer will have to analyse this option depending on costs/ROI. 

Returns are another top customer concern, particularly given the inexorable shift to digital. Irrespective of timelines and staggered returned products, higher levels of online demand mean a corresponding surge in returns—including but not limited to traditional Peak. Retailers must plan accordingly. 

In sum, strong and trusted delivery and returns capabilities are paramount for customer retention and brand integrity. One caveat issued by Vogue: “…increas[ed] online sales, out-of-character markdowns, free shipping, and exorbitant returns windows invite an unprecedented volume of returns four to six weeks later…” Buy-Now-and-Pay-Later options—while useful for driving spend—can also contribute to a returns backlog.

Retailers must also grapple with messaging: How do you merge empathy and concern with the imperatives of Black Friday, the most aggressive period in retail’s calendar year? Here are some thoughts:

  • From Emarsys: Don’t spam customers with discount offers. Just because it’s cheap doesn’t mean people will buy it, and you will damage your brand. Instead, send customers emails they’ll find interesting enough to open.
  • Mango employs pricing alerts and SMS VIP notifications; consider doing the same.
  • Put more emphasis on data. Lead with shopping history data to ensure the right customers are targeted with the appropriate discounts. Use data to identify the channels that are the best market drivers
  • For larger retailers with larger budgets, personalisation across content and marketing can convince customers to buy into Peak at minimum discount.
  • From Salesforce: The beauty of digital spend is its flexibility. It can be altered throughout the season to react in real time to changing customer demands and market conditions. Plan early but stay nimble. As the holiday landscape evolves, be ready to shift to higher-performing channels. Plan, test, learn, scale, and repeat. 
  • More emphasis on social media, email, retention, and LTV. 

In sum, we’ve seen strong Peak performance emerge in the period of economic uncertainty spurred by the pandemic. This is all the more impressive when Brexit uncertainty, worries about Black Market fatigue, and the dwindling number of brands in the marketplace are folded in.

But to ensure stability, digital must continue to deliver. Ecommerce is now the focal point of retail. Optimal website performance on a scalable platform is the sine qua non for both current Peak on Peak and long-term longevity. Retailers now have the opportunity to create seamless online customer experiences that will capture and retain new audiences and assure a prosperous future through the next decade and beyond. But the investment—in digital assets, talent, and data aggregation—must be made, and made now.


We’d love to connect and discuss how we can power your digital transformation.
Get in touch
© 2022 Astound Commerce Corporation. All Rights Reserved. Privacy Policy Terms of Use