Returns, BNPL, and a World Cup in Peak Season - the hot topics at RevLifter’s October Virtual Panel - RevLifter

Returns, BNPL, and a World Cup in Peak Season – the hot topics at RevLifter’s October Virtual Panel

by | Oct 6 2022

On October 4, 2022, RevLifter hosted a virtual panel – ‘Driving Ecommerce Success when Trading is Tough’. The panel discussed the macroeconomic circumstances creating volatility for many brands as they head into peak season and, crucially, what to do about them.

The session was hosted by Madison Trampleasure, Customer Success Team Lead at RevLifter. The panelists were:

Below is a summary of some of the topics discussed. If video is your thing, you can watch a full session recording at the bottom.

A World Cup in peak season!

High summer temperatures at host nation Qatar mean the 2022 World Cup will be held in the unconventional season of winter. Paul in particular was keen to discuss the impact of the world’s biggest sporting event:

The big difference is you’ve got a World Cup in the middle of it, so that’s going to be an interesting dynamic to see how it plays out. My guess is that maybe too much has been made of it. While people probably won’t be purchasing in the middle of the England vs. USA game occurring on Black Friday, I’m pretty sure the numbers will be somewhat similar at the end of the day. It’ll just skew the hour-by-hour numbers.

But I think it’s gonna be interesting because it presents some new marketing opportunities. You have in-game ads. You’re going to have to maybe think about what happens if England are winning versus what happens if England are losing.

All these things present exciting cases where you can get creative about what you’re doing with marketing. You could capture some additional value over the period versus those trying to do the same thing last year.

Pete added:

Ultimately, the longer England stay in, the more restricted you probably are in your marketing. As soon as England get dumped out, you can revert pretty quickly to your Christmas creative and your Christmas offerings that until then might not be particularly front of mind.

Is buy now, pay later going to help inflation-hit shoppers?

While inflation is likely to force many shoppers into spending less during peak season, Ali brought up the impact of buy now, pay later (BNPL) providers like Klarna and Clearpay:

Rising inflation is making brands wonder – how busy is Black Friday going to be? Many contributing factors mean the impact will be different – like the types of retailers, behavior, and opportunities.

Buy now, pay later is getting a lot more popular – it can be an attractive proposition for younger shoppers. An effect we’ve seen with BNPL is that AOV is going down, but the purchase frequency is increasing.

Pete mentioned a specific client who had turned off BNPL:

They’d turned off buy now, pay later as a trial, and seen the return rate improve. Even though overall volume went down, the quality of customers and the fact they didn’t have to pay to process returns meant that although volume went down, they made more profit at the end of the day.

Paul added:

Buy now, pay later makes it really easy to try three different sizes of the same dress. So, I would be surprised if there’s not some more innovation in that space.

Can brands slow down returns?

The prevalence of discounts can carry some nasty after-effects in peak season as consumers, buying more than they might need, take advantage of free returns policies.

Though most retailers are yet to crack the return puzzle, Steve had some ideas to lessen the impact:

There are a few things we think we can try to do with that. The main part is identifying potential returners. Has this product been added to a basket multiple times?

If it has, they’re going to try those different sizes and return the ones they don’t need. So what can we do to negate that? Potentially using recommendations, but as Ali mentioned as well the margin of the products that’s really important. You can try to recommend higher-margin products.

Travel – could there be a similar rebound for retail in peak season?

Although this year’s peak season comes amid a tough economic picture, Pete drew a comparison with the post-pandemic travel rebound:

I remember speaking to a few travel brands as the pandemic lockdowns ended. Many of them were finding that although overall volume was still down, the customers that were traveling were spending more and traveling further.

So the customers that previously would’ve spent £500 and stayed within Europe that hadn’t traveled for three years are now spending £1,500 and going to the Caribbean. They haven’t spent that money and they’re now seeing it as a bit of a fun budget, and they were happy to spend it.

Their concerns over the pandemic and being made redundant had gone away. They were happy to then go and spend that money and if we were to see the same here, then that could give a good boost to Q4.

Advice for the peak period: focus on understanding your customers

All the panelists were keen to point people towards data, flexibility and testing. Paul started with being ready to adapt:

Book as much activity with as much flexibility as you can. Because with the various new factors, like different game results and more work from home than ever before – all these different factors are really hard to predict, as there’s no historical precedent to go off.

Steve pushed the importance of looking at your data and testing:

Use the data you have available. Try to spot trends and behavioral patterns using whatever analytics tools you have available. Try and surface that and segment your customers into groups of different customer journeys or shopping profiles, however you want to wrap that up. And then test.

Ali also emphasized testing and internal collaboration in peak period:

Test and also understand the objectives of the different teams – if the finance department has a finite budget for promos, ensure that’s clearly communicated and set your rules to match. Make sure you focus on how success will be measured.

Pete added:

I’d say follow the data. Look at what the data’s telling you and be ready to pivot quickly – have two or three versions of a campaign and be ready to deploy it at the right time. Look at what your data’s telling you about your customers and don’t assume that you know what they’re thinking or, or what they’re doing because, we’re pretty much up to three years of saying this is “unprecedented”, but it is.

Watch a recording of the full session now

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