How can you prepare for a successful eCommerce year in 2022? It’s a tough question with no clear answers. Considering the recent eCommerce highs and lows, demand planning and forecasting are more challenging than ever.
In Bolt’s recent ThinkShop webinar, Retail Budget Planning for 2022, Alex Greifeld from Tapestry met with three panelists to discuss how digital retailers can plan for the upcoming year.
The webinar panelists were:
- Ingrid Milman Cordy, Head of Digital Marketing and eCommerce for Nuun Hydration
- Phillip Jackson, CCO at Rightpoint Commerce
- Ian Leslie, Senior Director of Retail Advocacy at Bolt
Here are some of their top insights.
1. What is one of your best or worst experiences with end-of-year planning?
Over the past two years, we learned that the eCommerce landscape can change in an instant. As a result, it can be challenging to plan long-term, especially when you experience setbacks.
Some interruptions are entirely out of your control. For example, Ingrid said she worked with a company on building brand awareness for a new customer profile. The project included robust content planning, media planning, and budgeting with the end goal of expanding this company’s customer base.
After months of planning, the founder got cold feet and decided to try and sell higher volumes to existing customers instead. The team put months of work into planning, and the unexpected turn was disappointing for everyone.
You may need to make last-minute adjustments after intense planning for reasons out of your control. However, Ian shares a worst-case scenario that sometimes happens due to a lack of planning in Q1, Q2, and Q3.
Ian relayed an example of a friend that came to him in Q4 asking for a recommendation for a good SEM person to try and acquire last-minute conversions.
Here’s the thing. It takes months of planning to acquire year-end conversions, and you’ll rarely boost your eCommerce sales with a last-minute effort.
So, what are some ways you can avoid some of these stressful situations? Phil offered sound advice.
He said to transition your relationships with clients, partners, and consumers so they aren’t transactional. It takes a long time to generate results, and the best outcomes happen when you have meaningful relationships with customers, clients, and different departments. Developing meaningful relationships opens the doors to communication and problem-solving.
Phil also echoed Ian’s sentiment when he said you’ll achieve gains, but it requires careful planning. If you plan well and make small gains in Q1, these gains will compound, and you’ll see growth in Q4. However, if you don’t see growth early in the year, you won’t see results in Q4.
2. Who are some of the key partners you work with as you plan? What did you do to strengthen those relationships?
eCommerce success doesn’t happen in a silo. It requires strategic and healthy partnerships with systems integrators, digital media teams, brand partners, and agencies. Let’s take a closer look.
Systems integrators & digital media teams
Ian said his development partners and digital media teams help him understand the company’s priority stack and goals. This knowledge makes it easier to set budgets that align with those priorities.
Ian stressed that transparency strengthens relationships with partners. Merchants often worry they’re giving partners too much information. However, the opposite is true.
The more insights merchants can provide in terms of sales numbers, what channels those sales are coming from, etc., the easier it will be for partners to plan and optimize.
Brand partners and agencies
Like Ian, Ingrid said that effective planning and budgeting depends on everyone providing detailed and layered information.
To nurture partner relationships, Ingrid brings her brand partners and agencies directly into her circle as if they’re full-time employees. Then, she gives them explicit details about how much they have to spend, goals, and any other relevant information her partners need to get the job done.
Phil said that brands want to know what other brands are doing and want to implement the latest tech craze. However, a better approach is to look at your unique brand, establish KPIs that work for your brand, and track progress every quarter.
It’s critical for you and your partners to have strategic conversations relevant to your brand—and your brand alone. Once you’ve outlined your goals, you can determine what you need to do to boost conversions. Interestingly enough, this usually doesn’t mean adopting the latest fad. To get started, ask tough questions like:
- Where are you spending money that’s budgeted right now that you shouldn’t be spending at all?
- What areas of your site are customers not interacting with anymore?
- Have you experienced a channel shift?
- What platform features are you not using?
- What do you need to build?
- What do you need to tear down?
Looking at your original brand holistically, asking tough questions, and having strategic conversions are all part of making a solid forecasting and budgeting plan.
“eCommerce and D2C are an ecosystem. Historically, it’s something we’ve approached from a very siloed point of view, where digital marketing understands campaign metrics and planning understands sell-through, and finance understands free cash flow. But you all have to come together and understand how your decisions impact each other’s ability to succeed. And the planning process is a microcosm of that. The more effective you can make the planning process, the more you can make it all come together.” – Alex Greifeld, Panel Moderator
3. How do you handle executing Q4 plans while budgeting for next year?
It’s easy for everything to seem like a priority during Q4, and it can be challenging to know how to execute Q4 plans and move into the next year with momentum.
Ingrid’s advice was to plan early and approach everything with a less is more mentality. In other words, teams are more efficient when they know their priorities early on in the year. This way, they can focus on doing fewer things better during Q4 instead of trying to do as much as possible and hoping something sticks.
She also recommends the 75:25 approach for balancing priorities. This means planning for 75% of things you can count on happening and leaving 25% of your time and budget open for emergencies and other opportunities.
Ian and Phillip also mentioned how critical it is to plan in late Q2 and early Q3 for Q4. During Q2 and Q3, focus on balancing priorities and creating a backup plan if initiatives fail. When Q4 rolls around, follow through with your Q4 plan. Only make adjustments if it’s truly an emergency.
In Phillips’s experience, the companies that see the most significant growth are the ones that focus during Q4 and don’t try to plan for next year amid Q4.
4. How do you address the specific nuances of planning for eCommerce?
Ingrid explained that DTC businesses, as opposed to brick-and-mortar stores, are marketing channels, which means you have a lot of control over driving traffic to your website.
However, having some control often gives off the illusion that you have complete control over traffic and all other growth KPIs.
Ingrid says that even if you can control some aspects of boosting traffic, it doesn’t mean you can plan your conversion rate, AOV, or mathematic your way into 100% growth year-over-year.
It’s easy to become so focused on the math side of eCommerce that you forget to invest in other things you know will boost AOV, improve conversion rates, and increase traffic.
To plan for eCommerce success, you also must allocate enough budget to hit growth goals. This may mean you make a more considerable investment in customer acquisition at the beginning of the year. The good news is your investment will pay off and set you up for success the rest of the year.
5. What are some takeaways for successful eCommerce planning?
Toward the end of the webinar, the panelists offered key takeaways that will help guide you through eCommerce planning for 2022.
Top 10 eCommerce planning takeaways
- Communicate as many details as possible about your end goals to your teams and partners
- Demonstrate how your investments and priorities stack up against your growth goals
- Don’t wait until Q3 or Q4 to talk about how your investments and priorities stack up against your growth goals
- Look to your vendors to identify spending patterns and trends from the previous year, and let these insights guide your planning
- Work with leadership to obtain a priority stack of eCommerce features, software, upgrades, etc. for the coming year, develop goals based on that information, and set a budget against it
- Educate leaders that there is not an infinite amount resources, so if a new priority arises in the coming year, something will need to come off the priority stack if you want to stick to your budget
- Assess what over the previous year was incremental spend and what wasn’t to help set your budgets
- Remember that spending more doesn’t always equate to getting more, so rightsize your spending and combine services when possible
- Focus on less is more so that your teams are aligned to a common goal
- Keep conversations open with your partners as you plan throughout the year