Seasonality: Friend or Foe?

Luiza Filipoi

by Luiza Filipoi

Spring, Summer, Fall, and Winter are the seasons that excited us while growing up; nowadays, our calendar is filling up with different kinds of seasons... the shopping seasons! We're breathlessly waiting for Valentine's Day, Easter, Black Friday, Christmas, or any other shopping opportunity, thus online retailers should make the most out of it!

To increase sales and return of investment, eCommerce players should understand the impact that seasonality has on their business. This way, they can better predict the demand and decide on stocks, human resources, marketing strategies, or other activities that could enhance the revenues and even reduce the costs. 

What is seasonality? 

As our knowledgeable friend, Wikipedia, says, "seasonality is the presence of variations that occur at specific regular intervals less than a year, such as weekly, monthly, or quarterly. Seasonality may be caused by various factors, such as weather, vacation, and holidays and consists of periodic, repetitive, and generally regular and predictable patterns in the levels of a time series." 

What are the seasonal factors that impact eCommerce?

Through the year, there are specific periods of time when consumers are likely to spend more money than usual. But not all seasons are the same, acknowledging the differences might help you boost the ROI. 

Easter, Valentine's Day, Christmas, Black Friday are holiday-driven seasons. Usually, there are some categories of products that sell better during a holiday, like chocolate on Valentine's day, flowers on Mother's day, cinnamon-flavoured candles (and any giftable product) on Christmas. Not to say that many themed products could help eCommerce players stimulate extra sales: pumpkin-themed products on Halloween, Santas on Christmas, or bunnies on Easter. 

If during the holiday seasons retailers are counting on a higher number of sales, for the rest of the year, they might depend on climate; and these days, mother nature often surprises us. Climate-driven seasons may be tricky; therefore, if you're selling seasonal products like ice cream or renting bikes, you might want to calculate some risks. 

Moreover, there are some seasons dictated not only by climate but by geolocation as well. For some people, I included, winter holidays involve cold weather, snow, and sweaters. Still, if you're from Australia, instead of drinking hot cocoa, you could spend your holidays serving a cocktail on the beach, and it's more likely to find a cool swimsuit there than in Europe. 

How is seasonality challenging eCommerce?

While customers are set to drain their bank accounts, retailers should keep up with their behavior and other seasonality challenges. You can't spend the entire year planning for Black Friday when your customers are willing to spend their money with every chance they get. 

But let's see what seasonality challenges should eCommerce players pass to achieve a higher return of investment during a season.

  1. Predict the website or eShop traffic 
  2. Predict the conversion rate
  3. Update the inventory
  4. Predict advertising costs
  5. Deliver a seamless shopping experience

The final outcomes depend on the accuracy of these predictions; if your anticipation is close to reality, then you're probably gonna get the best results. 

A few decades ago, consumer behavior was more calculated and easier to anticipate, even on holiday seasons. At the same time, now we have a multitude of means and tools that permit companies to know their market. Bringing together and comparing older data about your consumer's journey, sales volume, web traffic, and advertising costs on specific seasons will allow you to make probable forecasts about web traffic, advertising costs, and customers' requests. 

Basically, you need to do three things:

  1. Predict customer's intentions and behavior
    It may sound impossible, but as I said, in 2019, there are means to do anything. For a start, you could identify the reason why your customers buy the products you are selling and why they're buying them from you. Also, creating personas will allow you to communicate in the same language as your customers.
  2. Predict and adjust according to your web traffic
    Analyze, compare, and evaluate old data! Use your analytics tools to review what keywords bring more clicks or conversions. Track customers' behavior on your website and view what landing pages are performing better and why. 
  1. Predict and adjust advertising costs
    First, you should evaluate your historical data regarding advertising costs. After you have a clear image of what happened before and what would you like to happen next season, you should consider optimizing your campaigns. We all know that Google assigns a quality score to any campaign, and considerably affects the cost per click. 

Seasonality may seem obvious for some people, but when you have a closer look, it becomes more and more elaborate. A business could experience high gains during some seasons but also high losses; therefore, it is essential to approach and include seasonality in your strategies (especially marketing). 

Twispay doesn't offer seasonal solutions but could surely help you accept online payment in any season, no matter how high your sales volume is. Give us a call

Luiza Filipoi Luiza Filipoi