Q4 Preparation: 3 key things to consider during the holiday sales season

Posted on October 5, 2018

Ready or not, Q4 is right around the corner. It’s important to remember the significant opportunity this time of year presents within the e-commerce game.

We are in a world where 51 percent of Americans now prefer to do their shopping online. Projections show e-commerce sales in the United States will reach more than $630 million in 2022, nearly double the sales from 2016.

With Q4 specifically, spending will increase as the holiday season sneaks up on all of us. In 2017, sales in Q4 exceeded each of the three other quarters by nearly $20 billion.

There are a few especially significant days to look forward to as well. Cyber Monday in 2017, for example, was the largest online sales day in history. It was also the first $2 billion mobile shopping day. Black Friday and Thanksgiving may not be Cyber Monday, but they also are plenty valuable.

Here’s the deal: The growth of e-commerce is exciting and Q4 presents the most important period each year for taking advantage of the opportunity. Essentially, this is the playoffs for e-commerce and you’ve got to be on top of your game to have success.

What to Consider

1. Inventory

The first challenge to consider during Q4 is your inventory. As we’ve outlined, this is the time for increased sales. You must have the supply to meet the demand accordingly. If you run out of inventory in December, it’s very likely to be a significant missed opportunity.

It’s essential to be hyper-aware of your primary customers and their shopping habits. That’s who is going to help drive your sales through the roof during Q4. Keep the Pareto Principle in mind, which suggests 20 percent of your customers create 80 percent of the revenue.

It would be wise to rely on a cohort analysis to help. In doing this, you can analyze how your customers behaved in Q4 of the previous year compared to the other three quarters. This information will provide at least an idea of how prepared you need to be for Q4 this time around.

2. Marketing Strategy

Your marketing strategy is another important challenge heading into Q4. It’s important to develop a sales and discount plan that makes sense and drives results.

One place to start is considering the impact of offering free shipping. Research shows that 61 percent of customers are “at least somewhat likely” to void a purchase due to shipping costs at checkout. Unexpected shipping cost is also the most common reason consumers are abandoning their cart before conversion. If the cost of offering free shipping is a concern, at least consider offering it on a limited scale. One study showed that half of all consumers are willing to wait up to a week on delivery time if it means the shipping is free.

Other discounts, such as codes and coupons, can also have a significant impact on conversion. Projections suggest 31 billion eCoupons will be redeemed worldwide in 2019. That’s up from 16 billion in 2014. Additionally, 77 percent of consumers in 2016 spent at least $10 more per purchase when using coupons.

It’s not only important to consider your consumers when planning a discount strategy, but it’s also wise to consider your competition. Are you battling with competitors primarily on price or quality? If you say price, frequent discounts are going to make more sense for you. In a competition for quality, frequent discounts obviously won’t be nearly as useful. If your deciding which side of that fence to sit on before developing a discount strategy, you should know the pros and cons of each first. It’s likely your competition battlefield is based on a combination of price and quality. If that’s the case, it’s important to be competitive while not necessarily targeting just the discount shopper. Specifically looking at Q4, it’s vital to analyze your past experiences, your budget, and the key dates of potential high sales to develop on discount strategy.

3. Building Audiences

One of the most important things to keep in mind is to be aware of the audience blowout you will experience if you are not building warmer audiences for Q4. Below is how you can target engagement with specific videos preparing your audience for upcoming sales or new product launches.

  • This starts by having a plan around what offers you will be making to both new and previous customers and designing the creative in a way that allows for retargeting. The main driver this year for Q4 will be video, as it has the most options for retargeting and is still an extremely cheap cost per video view.
  • From there you will run the video ads to build your audiences, targeting interests and lookalikes that you have built previously. (If you’re looking for some inspiration here, you can check out this article around cutting your advertising costs in half through smarter audience selection.)
  • Once you’ve built up a good amount of video views, you will create custom audiences of the specific videos through your business manager. You can also do this with full-screen experiences (canvas), or lead ad forms.

  • This will allow you to have warmer segments and special audiences you can craft personalized experiences for. Think about launching a new product or special offer to previous customers, and combining email and a little-paid spend to reap massive sales. Creating these planned personalized experiences will go a long way in scaling your Q4 sales.

So while the opportunity Q4 presents is great, it can be wasted without careful considerations. You can be a successful player in e-commerce during the holiday season if you’re taking steps to ensure your inventory, marketing strategy, and audience building are ready for the rush. If you don’t have these things in order, you’ll leave yourself far too susceptible to having unhappy holidays.