Holiday Preparation for Merchants: Q4 is Won in Q3

Holiday preparation in Q3 is the key to winning Q4. The Apogee team has been working with our merchants for the last two months to stay ahead of trends and strategize to make this holiday season a success. As always, Apogee is here to help you brainstorm and strategize ideas to make your holiday season the best.

Here are some takeaways from Prime Day 2022 and predictions for 2022 holiday sales put together by SalesForce.com.

• While overall sales have been pretty steady, online sales are declining for the first time this year. There is a balance happening between online sales and physical stores. In many cases, consumers are ordering online but picking up purchases locally, in-store.
• Buyers are doing their research and have high intent when they decide to buy. This means fewer carts are being created and fewer carts are being abandoned.
• For the 2022 holiday season, the Shopping Index predicts a 3% YOY increase.
• The holiday buying season is expected to be more of a drawn-out bell curve rather than a traditional spike. With inflation and less disposable income, consumers will begin shopping even earlier than usual. The prediction is that 37% of US consumers will start buying earlier hoping to snag gifts before prices rise.
• Consumers are prioritizing value in their purchases. The value will override loyalty in most buying decisions meaning consumers are willing to switch brands to save money. With money conscience buyers, discounts and value will be top of mind.
• 15% (31 million) of shoppers are unsure they will buy any gifts at all this year.
• Consumers have been conditioned to expect free and fast shipping. Shipping continues to be a struggle for both brands and consumers.

Here at Apogee, we are seeing a lot of the same trends in customer behavior and how content creators and big media publishers are adjusting to accommodate these changes.

Affiliates/Influencers and mass media are already writing and publishing holiday listicles and gift-giving recommendations. Content creators are looking to show their audiences the best deals on products that will arrive in plenty of time to avoid the holiday shipping rush that we have experienced in the past. Pinterest, Instagram, and TikTok are all showing increases in holiday and gifting-themed content.

Content creators will be creating and scheduling their content now to go live throughout the holiday selling season. This is why it is important to not only give your affiliates information early but do everything you can to prevent any last-minute changes.

Here are a few suggestions we have seen be successful in the affiliate marketing channel:

• Perceived value discounts — Showing a discount on price on-site i.e. “$100 Now $80” is a way to show value while preserving margins.
• Value-added service — gifts with purchase. Tip: To increase sales, make a minimum order value 15%-20% higher than your last 12-month AOV.
• Exclusive or Limited Time offers — Since consumers want the best deal, creating scarcity or exclusivity with discounts can urge consumers to buy early.
• Sponsored Content + Product Review Opportunities — Content creators will be inundated with opportunities and will be looking for great products to share with their audiences.

The Foundation

It is important to have a solid foundation for your affiliate program as you go into Q4 to really reap the rewards of this shopping season. If a program is not properly set up, you may see some results, but that would only be a fraction of the success possible if the program was fully optimized.

While it is true that an affiliate program will always grow in relation to your overall DTC sales, you can speed up that process and achieve a higher percentage by making sure that there is a solid growth strategy in place. This includes ongoing recruitment, training, and activation of new affiliates along with communication and incentivization of existing affiliates.

In addition, your program must be attractive to affiliates who are also looking to maximize their efforts this holiday season. Your program description, terms of service, commissions, cookie duration, triggers, EPC, autoresponder emails, bonuses, and newsletters are all public to affiliates looking for what programs to join.

At Apogee, we ensure all of these factors are in place and optimized before we even begin to introduce them to our wide network of active affiliates. With the foundation in place, holiday preparation can begin.

Holiday Preparation Checklist

In addition to normal program management and foundation concerns, we suggest giving extra attention to the following specifics in Q3 to set up for Q4 success:

Profitable Commissions – As part of the Apogee strategy, we pay different commission levels based on the model of promotion. For example, we pay content affiliates the default commission or a VIP commission as they are the ones who are putting more effort into creating thorough reviews, blog posts, videos, and social media sharing.

We pay other affiliates less than the default because often times all they do is post lists of coupon codes. They do add value in closing the sale, but their method of promotion doesn't include much more than sharing a discount code.

By using a model-targeted commission strategy, we have more flexibility in the budget to offer stronger customer discounts and/or affiliate incentives.

Bonuses – Bonuses are a great way to activate new affiliates and keep them creating content for your brand. We give bonuses to content affiliates based on both effort and volume to incentivize those that show a willingness to go above and beyond standard promotions to keep them away from the competition. Some affiliates are even on a private bonus level. Well-structured and communicated bonuses help us find or create super affiliates.

Deals – Customers want deals and will scour the internet to find the best deal. Affiliates know this, and they are committed to offering their audiences the best deals, often doing the footwork to find the best coupons available.

In ShareASale, we can see the affiliates in the clickstream and we can easily identify the deal finders because we see them go from site to site triggering cookies until they find what they feel is the best deal on the product or service they want. Merchants who put out aggressive, affiliates-only coupon codes see strong results from this channel.

Paid Search Monitoring – BrandVerity monitors paid search for all of our clients to ensure no affiliates are violating our clients’ strict Terms of Service. When affiliates are allowed to bid on paid search terms, they become a direct competition with the brand's own paid search practices, driving costs up unnecessarily. Without monitoring, unmanaged merchants may have no idea that violations are occuring daily.

Active management means monitoring and policing paid search daily, voiding sales from violators, and removing them from the programs immediately. In the event that a client needs a paid search solution, we have two preferred affiliates who offer the service on a performance-only basis.

Communication – Affiliates and Content Creators receive dozens — if not hundreds — of email offers each week. For this reason, it is important that you keep good communication with your affiliates to keep your program top of mind. Consistent newsletters, personal messages, and social media conversations are critical components of running a successful affiliate sales team.

In Conclusion

It is never too late — or too early — to prepare for the Q4 Holiday Selling Season. Planning ahead and equipping your affiliates with the tools they need to promote your brand along with incentives to reward them for their hard work is the best way to maximize the potential of this busy season.