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For all retailers, the year-end holidays mark an essential consumer milestone. It’s a joyful period, conducive to purchases, during which consumers are often in high spirits.
For certain brands like My Jolie Candle, offering candles with hidden jewelry inside, only the months of November and December account for 50% of their annual revenue. By Charlot, a house selling exceptional plants in customizable and stylish pots, generates a third of its annual turnover in December. The glasses brand Nooz, on the other hand, leverages this time of year to emphasize its communication efforts. With such significant figures, anticipating this extremely dynamic period is crucial to approach it as robustly as possible.
Here are 5 best practices from the growth strategy consultancy Digital Native Group, experts in Digitally Native Vertical Brands (DNVBs), for successfully navigating the holidays. These practices are currently implemented by My Jolie Candle, By Charlot, and Nooz, all users of the Shopify platform.
1. Stock Forecasting
Neither shortages nor overstocking
Every merchant knows all too well that inventory is the greatest challenge! Anticipating the necessary stock to meet demand without ending up with an excessive surplus of goods is the primary challenge for brands.
For Samuel Guez, CEO of My Jolie Candle, ‘Inventory is a genuine source of anxiety, and hitting the mark accurately is a struggle. In the five Christmases since our brand’s inception, we’ve experienced stockouts three times and overstocking twice. Given the seasonality of our product, overstocking is extremely risky, and we fear ending up with an excessive quantity of products to amortize and sell until the following September. It’s crucial for us to be as accurate as possible, which is why we work on our sales forecast with the utmost precision.’
It’s also essential to ensure that stocks across various distribution channels are prepared to meet customer demand wherever they engage with the brand, whether in-store, on marketplaces, through retailers, or the online store.
Cash flow
the crux of the matter. If the issue of inventory is also strategic, it’s primarily because it requires significant investments to finance it, thus significantly increasing the need for working capital (WC).
According to Charles Fossey, Co-Founder of By Charlot, ‘Having excessive stock puts your company at risk because it ties up cash and space, especially in our case with plants that are quite challenging to stock. When you’re a young brand experiencing rapid growth, it’s a bit of a double-edged sword: not only do you have to finance your stock, but this amount can exceed the cumulative turnover of the entire previous year. This requires meticulous management and a bit of cash flow. To be as accurate as possible, we analyze the product mix and average basket, which are fairly stable. We forecast to achieve X amount of revenue, divide it by the average basket, and then allocate it by product mix.’ While many brands play on scarcity and garner significant success, for gift products like candles or plants, it’s a risky game. If the product isn’t available, consumers may switch to something else that will arrive on time for the event, be it Christmas or a birthday.
If many brands capitalize on scarcity tactics and find success, for gift-oriented products like candles or plants, stock shortages risk consumers opting for alternative options that arrive on time for the occasion, be it Christmas or a birthday.
2. Anticipating Logistics
Mastering logistics
Selecting a logistics partner is a crucial strategic consideration for online merchants. The chosen partner must be capable of handling a substantial increase in activity while maintaining an impeccable level of service to support the brand’s growth. They are an essential collaborator working closely with the teams.
At My Jolie Candle, daily meetings are organized in November and December to discuss projected daily shipping volumes.
“We don’t hesitate to deactivate contracts with certain carriers during this period to ensure timely deliveries,” adds Samuel, CEO of My Jolie Candle.
At By Charlot, order preparation is done internally. Shipping plants poses a genuine challenge, which is why the brand has developed its own highly durable packaging. Charles emphasizes that during this time of year, “the volume of activity projects what your business will look like in a few years. It feels like we have a much larger company than the rest of the year. So, it requires quite a few adjustments to approach this time with as little discomfort as possible.”
Supply chains
According to Samuel at My Jolie Candle, “We try to limit supplies to 2 or 3 deliveries to physical sales points during this period because we are very busy operationally, and it’s very complicated to manage, especially for us, who are not initially retailers.”
3. Customer Service Enhancing Customer Experience
Choosing the right carriers
For Charles at By Charlot, “Our obsession is to have the best possible customer service. It must be impeccable in its service. To achieve this, we selected the most suitable carrier for our product typology. Since these are mainly gifts, there’s a sense of urgency. That’s why we favored Chronopost over Colissimo, which cannot commit to a delivery date. The choice is also made based on Shopify integrations, such as transport label editing or choosing collection points. This was also the case with Stuart for scheduled deliveries integrated into Shopify. Customers could directly schedule appointments on our site.”
“Our obsession is to have the best possible customer service. It must be impeccable in its service.”
Mobilizing necessary resources
The increased volume of activity requires significant human resources. At My Jolie Candle, the customer service team, consisting of 2 to 3 people the rest of the year, expands by hiring 4 fixed-term contract employees for the period. “We set up shifts to be available 7 days a week, whether on chat, via email, or by phone,” explains Samuel. For By Charlot, whose products generate many questions regarding maintenance, the customer service team also grows during the holidays with external reinforcements or internal transfers. “Responding to questions online or in-store is the same, so we can easily ask salespeople to help with Customer Care at By Charlot. We also coordinate hirings with this period and onboard new hires before December,” adds Charles. Engaging internal teams (product, marketing, procurement, sales, etc.) to support customer service allows more employees in the company to understand this department and its challenges. It also diversifies the discourse and improves processes with an outside perspective.
4. Optimizing Commercial Promotion
Promotional Strategy
The pricing strategy of these DNVBs is based on eliminating as many intermediaries as possible to offer products at the best value. They practice a fair pricing policy throughout the year by applying few or very few promotions, as explained by Samuel for My Jolie Candle: “Since we offer very few promos, only for French Days and Black Friday, it works very well! Customers show up.” Business common sense suggests offering the largest discounts on products with the most significant stocks or those that won’t be continued. My Jolie Candle offers the same promotional offers online (e-commerce site and marketplace) and offline, “which is sometimes challenging to manage as we don’t always have the same range of products on different distribution channels,” according to Samuel.
Visual Merchandising and E-Merchandising
High sales peaks are, of course, an opportunity to clear out stocks. To best manage which products should be promoted and when, visual merchandising is a crucial sales technique to master. Whether in-store or on an e-commerce site, highlighting and organizing products play a significant role in the consumer’s shopping experience and can influence their choices. To assist in this process, My Jolie Candle uses a Shopify plugin connected to a Slack bot that notifies all teams when a product has fewer than 10 units in stock.
This triggers a list of actions to be taken urgently by the teams:
- Pause advertisements,
- Reduce the product’s prominence on category pages,
- Remove from landing pages.
5. Strengthen Communication
Creating an emotional connection with the customer
At Nooz, it’s an opportunity to tell a story around end-of-year operations, explaining, for example, why the purchase of two pairs of glasses results in the third pair being complimentary. According to Antoine Doolaeghe, co-founder of the optical brand, “Efforts are made throughout the year to highlight the product; we don’t want to degrade the brand image by hammering an aggressive promotional communication. Instead, we take advantage of this time to release new products or specific range variations. These are more indirect offers like kits (grandfather’s kit, little sister’s kit, etc.), which also allow us to do cross-selling. We also offer gift envelopes for each order.”
“We don’t want to degrade the brand image by hammering aggressive promotional communication,” indicates Antoine, co-founder of Nooz.
Creating Special Events
By Charlot is a rather timeless brand with permanent products throughout the year and new launches timed with the seasons. As the DNVB (Digitally Native Vertical Brand) doesn’t engage in promotions for Black Friday, Christmas, or sales, it relies on other communication strategies to animate its commercial offerings and generate traffic. In December, it offers Christmas trees, allowing it to develop a different content strategy that creates an event on the brand’s website. This could also involve collaborations with artists or other DNVBs. For the brand, which is also present in major Parisian department stores with its own demonstrators, the year-end holidays are an opportunity to engage in the activities of these highly frequented outlets during this period. “We also have the chance to be featured in the Bon Marché catalog, which is consulted a lot for Christmas gifts,” adds Charles.
Read also: 4 strategies to double your traffic without any marketing
Activating CRM Animation
Significant events are always highlights in a brand’s communication with its community. The more precise email campaigns are, the more effective they become. That’s why having a comprehensive database is important to derive the most relevant segmentations. At By Charlot, database segmentation allows specific content to be sent to customers based on the plants they have purchased, such as care tips. This helps create a connection with the community and therefore engagement. It can also involve reactivating inactive clients.
Leveraging LTV to Implement Relevant Communication
Analyzing the Customer Lifetime Value (LTV) enables the calculation of the cumulative revenues of a customer throughout their interaction with the brand, particularly concerning the month of their first purchase. By conducting this analysis, brands can assess the weight and future impact of new customers making their first purchase during the holidays. Furthermore, they can work on the existing customer base by emphasizing their natural repeat purchase behavior. Two primary levers facilitate this work with clients (existing and future). Firstly, through CRM by sending newsletters and creating targeted automation scenarios. Secondly, by acquiring paid traffic through the creation of specific campaigns with tailored wordings, targeting, and dedicated landing pages.
