If you are having trouble shifting stock, the data is compellingly clear – new channel adoption only works to your advantage.
There has been polarisation of sales between verticals – pet supply, FMCG, home and garden, toys, health, indoor fitness and food have been rocketing upwards at breathtaking speed.
However verticals like men’s and women’s occasion wear, which require weddings and events, or swim products which heavily rely on public swimming pools being open, have unsurprisingly seen an adverse impact.
No matter your sector and present experience in this polarisation, clearing stock via new channels is becoming increasingly critical.
THERE WILL NEVER BE A FULL ‘RETURN TO NORMAL’
THE IMPACT TO THE WHOLESALE CHANNEL
Brands with a reliance on the wholesale channel in particular can be in a challenging place – order books are being cancelled and many of the accounts they sell through are retail store driven, which can cause real issues at the moment with closed doors across the UK and much of Europe.
That said, many online retailers are massively over performing, like Wayfair (20% surge Q1), Amazon (up 24% Q1) and Zalando (predicting 10-20% growth).
While not surprising given so many are shopping at home short term, historical study and demographic shifts would easily argue there will never be a full ‘return to normal’ and indeed, the normalisation of ‘shopping online’ and on marketplaces is only accelerating in trends. Looking historically, these major landmark events are catalysts for change and the feeling is that increased eCommerce adoption globally will be one of the many legacies of C-19.
WHAT DOES THIS MEAN FOR YOUR STOCK?
With this in mind, some of our clients can’t get stock quickly enough and with the C-19 knock on disruption to their supply chains, they are missing out on valuable sales.
Others have planned for orders that are either being cancelled by wholesale customers or for retail stores that are closed.
Stock is mounting up in many warehouses across the UK and the sales channels available have hugely retracted to the sellers’ own ecommerce sites or third party eCommerce (through wholesale, online concession, dropship or marketplace models).
FOR THOSE WITH SUPPLY CHAIN ISSUES
For those dealing with the positive impact of sales and a negative impact to supply; reviewing your pricing, promotions and any affiliate schemes is key. Many have switched off their affiliate schemes and reigned in PPC spend whilst focusing on higher margin, more organic leads, which clearly makes sense on items soon to be out of stock.
On the third party eCommerce side we would generally encourage a similar process, whilst still defending the brand against would-be competitors trying to muscle in on your key brand terms. Reviewing this in a more granular way can pay real dividends as sales right now can be very product specific as the ‘lockdown’ situation is so nuanced.
For example “skipping rope” is up 155% on Amazon UK searches over the last 90 days but “dumbbell weights” is up 20,000% over the last 90 days and “swimming trunks” is down 34% over the same time. It would not be fair to say sports products should be treated equally.
Past forecasting is also a nightmare as the surges in demand are so nuanced and we don’t know how long this will last and be sustained.
We suggest brands focus on ‘evergreen’ best seller products, so you don’t end up overcommitting to a product trend that may dissipate prior to even landing on UK soil.
FOR THOSE WITH OVERSTOCK ISSUES
This is an opportunity to review your sales mix. There is only so much you can do through your own site and getting extra traffic often comes at a cost that might be not converting in ways it once did.
Leaning on other high traffic eCommerce sites is a very sensible approach, given the fact they offer a whole new pool of customers, there are often quite time and cost effective ways of getting live and they can diversify sales and enable long term incremental growth opportunities.
We know, for example that Amazon and eBay are trading very well at the moment and other more vertical specific sites like Wayfair for Home and Garden, Zalando for fashion and FeelUnique for health and beauty are enjoying much success too. So where do you start assessing new site opportunities?
START WITH WHY
In the infamous words/book from Simon Sinek, it is always best to start with your objectives:
- Want to turn stock into cash fast? Look for off price orientated channels like eBay and CDiscount. There are often quick ways of getting started through your own channels or 3PLs setup to facilitate the stock and order flow and still offer you competitive delivery rates.
- Want to try new channels out with longer term brand building in mind? Look for more category specific sites to work alongside big regional players strong in these categories. Amazon has loads of brand enrichment opportunities like A+ content and brand stores, alongside PPC tools to lure people away from competitors and defend your own brand. FBA (Fulfillment By Amazon) can also help get up and running very quickly across multiple territories.
- Want maximum flexibility, scalability and regional reach? Look for listing management platforms that you can integrate with once so they can do much of the heavy lifting. There are many tech solutions that require a one time integration and then your systems and processes can be leveraged to service a multitude of channels globally. For this, you need to think about global courier rates and pricing carefully and this will always take longer, as IT projects so often do.
WANT TO GET CRACKING AND OPEN UP SOME NEW CHANNELS FAST?
If you have excess stock and want to lean on an experienced partner to help you get setup quickly and efficiently, please get in touch (sales@richinsight.co.uk). We offer free 1.5 hour discovery and consultation calls to pull together thoughts on how best to approach this, based on your objectives and looking at your category and channel opportunities.
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