Thriving on peak sales: how to handle stress like a boss
Around the world, major sale events like Singles’ Day, Black Friday, Cyber Monday and many others have delighted consumers and drove massive spending behaviour. Lured by the prospect of major savings on marquee brands, we have all at one point frantically clicked to add items to our online carts. In Asia Pacific, Singles’ Day in particular has reshaped the region’s eCommerce landscape and increased the prominence of online retailers. A major worldwide shopping festival turned cultural phenomenon, Singles’ Day and similar spinoffs (9.9 sale, 10.10 sale and 12.12 sale) have helped to catalyse the region’s shift towards eCommerce, luring consumers online with attractive promotions, steep discounts, and offers that are just too good to pass up.
This year’s peak season sales could look very different compared to previous years as the eCommerce landscape has changed due to the global pandemic, which has brought about an acceleration towards digital-first experiences. Consumer attitudes and behaviours have shifted quickly within a span of time as movement restriction orders and social distancing measures have resulted in consumers adopting new ways to pay.
According to our study in March, the region saw a 36% increase in consumers shopping at eCommerce websites. Close to one fifth of people bought food and beverages online for the first time, and about half expected their online spend to increase in the following month. The stickiness of digital payments cannot be underestimated, as three quarters of respondents indicated a preference to continue paying digitally instead of going back to cash, even when the pandemic is over.
As more consumers turn to, and stick with, eCommerce for purchases of essential and non-essential items, many online retailers have had to cope with increased volumes. In the first quarter of 2020, Shopee received a total of 429.8 million orders, a YoY growth of 111.2%.
The challenges of peak sales
Evidently, peak sales periods present attractive opportunities for eCommerce retailers; in 2019, 26 brands on Lazada received almost $1m in sales within the first 24 hours on Singles’ Day, whilst Shopee’s “12.12 Birthday Sale” saw more than 12 million orders across Southeast Asia. However, peak sales periods can also present huge challenges.
We have seen first-hand our large sellers trying to handle overwhelming order volumes within ever-shortening sale windows (think about the 1-hour pre-sale event that is extended to only loyal customers before the main event). This puts a great amount of pressure on their digital infrastructures, which extends from authenticating a consumer to assessing risk scores when making payment. Poor performing platforms leaves frustrated customers stranded at loading screens or with errors during checkout. When consumers are unable to add items to their baskets or checkout quickly and error-free the first instance, they may abandon their purchase altogether. And often, this poor experience sticks, causing them to think twice about using the platform again. This can ultimately lead to loyal and new consumers turning to the welcoming arms of competitors, causing millions in lost sales and wasted marketing campaign expenses.
On the other hand, the rush to fulfil as many orders as possible makes online retailers more vulnerable to external risks such as fraud and unauthorised payments, account takeovers, affiliate fraud and refund risks. 2018 saw a 13% increase in global cross-channel payment fraud during peak sales periods such as Black Friday and Cyber Monday. Moreover, fraud prevention is not as easy as it seems; errors in fraud and risk management systems can result in false positives, where legitimate credit card transactions are wrongfully declined.
So, how can online merchants handle the stresses of stifling order volumes and come out of peak sales periods on top?
How to handle stress like a boss
To maximise peak season gains, preparation is key. Best in class sellers have full visibility of their upcoming peak sales periods and plan accordingly. Increased volume increases the risk of order-fulfilment issues, so new policies and training for customer service agents may be necessary to ensure customers stay satisfied and happy. Sellers should also ensure their physical and digital infrastructures are well-equipped to handle the surge—from fulfilment logistics management systems to digital user-interface gaps and server traffic management.
With all of that in check, getting the support of a payment partner is also crucial to surviving the stresses of peak sales periods. Partnering with a proven, scalable payments platform, not only reduces the risk of technical issues arising during moments of increased transaction volumes, but also improves your overall payment success rates (PSR).
Of course, it’s never really over when it’s over. We and our sellers commit to post-mortems reviews after each peak season, where we can improve future successes by dissecting and resolving any issues identified. Did your revenues meet your forecasts? Did you succeed in fulfilling most of your orders? Were there any hiccups in accepting payments? How did your fraud management system and processes hold up, and were you able to keep operational costs down? Understanding where things went right or wrong will enable businesses to optimise key functions and processes that are vital to ongoing peak sales success.
Given the rising popularity (and growing scale) of major eCommerce sales events around the world, as well as the behavioural shifts we expect to persist post-pandemic - the stresses of increased commerce volumes will become a long-running issue to solve for. Only if you are prepared to handle online commerce stress like a boss, will you be more likely to achieve your organisations objectives at each event.