Thoughts on a Killer Cyber Monday Week

Detailed Image Cyber Monday 2012 Boxes

Cyber Monday Boxes

The Expectations

A few months ago we weren’t sure where to set our expectations for this year’s holiday shopping rush, what I like to now refer to as “Cyber Monday Week” – the Tuesday before Thanksgiving through Cyber Monday. Last year was a huge success, setting the bar pretty high for this year.

Then we had a surprisingly successful October of sales where we saw larger-than-expected growth in a month that’s traditionally been one of our slowest. The month ended with Mike and Greg traveling out to Las Vegas for SEMA, “the premier automotive specialty products trade event in the world”. Despite our travel plans being delayed by Hurricane Sandy, Mike and Greg still made it out there for the second half of the show. With the help of Reece and I back at company HQ, we were able to cover the event on our Ask-a-Pro Blog, Facebook, and Twitter with a mix of flash sales, detailing news, and crazy contests. It was only a fraction of what we had hoped to accomplish, but it was a definite success, both in terms of traffic/sales and also new opportunities gained by meeting people in the industry.

The momentum of SEMA led right in to our Early Holiday sale. On that first day, November 5th, we broke our single day sales record, which was set last Cyber Monday. That was when we realized that we could potentially be in for a massively successful Cyber Monday week.

The Promotions

One of our key decisions was to start our main promotion – led by a 25% off coupon code – earlier than in past years, on the Tuesday before Thanksgiving in hopes of capturing some of our customers who traditionally travel over the holiday weekend and aren’t online while they’re gone. Otherwise our promos were pretty similar to previous years. We have free shipping available over $99 all November and December without the use of a coupon. We also had special product sales that changed from day to day where customers could get more than 25% off, with the biggest ones being on Black Friday and Cyber Monday. For the first time we were able to synchronize our paid marketing efforts on car forums, Twitter, Facebook, AdWords, and Bing Ads with these sales.

The Results

We kicked ass, there’s no other way to say it. Tuesday, the first day of the sale, was incredibly successful. Black Friday sales more than doubled. Cyber Monday sales beat least year’s Cyber Monday and our Early Holiday sale by quite a bit to set a new daily revenue record. All of the other days were up as well year over year. For the week sales were up around 50%!!! Again, last year’s week was quite a success so to have that kind of growth at this stage in our business is a tremendous accomplishment.

Our Operations

One of the most satisfying parts of the past week for me is seeing just how smoothly our operations scaled. The website didn’t run in to any issues. We were able to handle the customer service. We were able to pack the orders in a timely fashion without ever feeling rushed.

Mike, Greg, and I did pull and pack orders for the first time in quite a while. Our box size system, inventory zones, and clearly labeled product shelves make it simple for us to step right in and pull an order like a pro. Even if I’d never seen a product before (and believe me, there are some that I had never actually seen) the invoice guided me to the correct location in the warehouse and then the labeled shelves led me right to the correct product. It just reinforced how good of a system that we have. If we ever needed to, we could have a new warehouse employee up and running in hours.

Inventory

Greg did a great job forecasting inventory. We probably carried double the inventory that we had last year at this time. Ordering at that volume can be complex. When stuff is on sale people behave differently than they normally do, ordering larger sizes (a gallon instead of a 16 oz.) or stocking up on supplies like towels and pads. By the end of yesterday, we were out of only a few key products, which was astounding.

We do our best to balance keeping inventory lean with never actually running out of products. When we do run out of a few things at once, it can create this perpetual issue where a customer’s order originally couldn’t ship because of one product but by the time that product is in stock another product in their order is out of stock. We’re working on ways to better handle this issue. Yesterday afternoon I adjusted our reports to provide more detailed information about every order being held so that we’d be able to better manage those orders. The worst thing you can do is promise a customer their order by a certain day because you think we’re out of X without realizing that we’re also now out of Y which will push their ship date back a week.

I’m also a little shocked by how unresponsive our distributors were this past week. Most were shut down for not just Thanksgiving but for several days before and after. Many orders Greg tried to get in Tuesday or Wednesday of last week are just now being confirmed because people took long holidays. It’s surprising to me that they wouldn’t have at least a small staff available to keep orders moving on Wednesday, Friday, and Monday during such a busy retail season. Ultimately this hurts us because we get stuff in stock later, and it hurts them because invariably people won’t order their products if their marked as backordered on our site. It’ll probably take us a few weeks to catch up with all of the backordered shipments.

Employees

I was proud to see how good all of our employees are at their jobs. For Reece and Bobby, this was their first experience of an extended busy period like this. They’ve all become pros at their jobs: Charlie running the warehouse operations, Reece handling customer service, and Bobby handling accounting. Each of those things becomes many magnitudes more difficult during busy times and they all did an exceptional job.

After this week, it’s pretty clear that with this existing team we could double or triple in sales without adding any staff. Now, we may want to add staff if that were to happen, but it’s nice to know that a boost in sales isn’t going to immediately cripple us.

Customer Service

Our customer service system worked great. Reece and Greg spent a lot of time answering emails for sure, but it was very manageable given the volume. I also jumped in and answered a handful of technical questions. In scanning the emails, I was shocked by how many people complained about a product going on sale for 30% or 40% off for a day when they had just gotten it for 25% off a few days earlier. In most cases, the difference amounted to less than $5, but the customers were shockingly rude about it. We were happy to refund the difference, but it just surprises me that people will actually take the time to write in and complain over a few dollars when they already got 25% off…especially when it’s on a known holiday like Cyber Monday. I guess that’s something I would never think about doing so I have a hard time relating. I wonder if Amazon or Newegg gets a lot of emails like this? I’m sure they do, it’s just something you never hear about. To be clear though: this is a super small minority of customers relative to sales. Our customers as a whole are overwhelmingly awesome.

On a Personal Note

Thanksgiving used to be my favorite holiday. Not so much anymore. I enjoy seeing the sales come through. I enjoy the camaraderie of working with the guys in the warehouse. But it’s now all about business. Even on Thursday when I’m at dinner with family, I’m not really mentally checked out from work. Running a retail business does sort of ruin Thanksgiving, but it’s worth it. We do slow down before Christmas, so the week between Christmas and New Year’s is the time to relax and enjoy holidays with friends and family. Thanksgiving is all about work. It might not be ideal, but it could be worse.

There’s Still So Much Left!

Stepping back, the real awesome thing about this week was that we feel like we’re still nowhere near hitting on all cylinders. There’s so much marketing we’re not getting to. The website still has a long ways to go to meet our expectations of being an elite e-commerce experience. While 2012 was focused on training our employees and improving a lot of internal systems (plus launching the new LockerPulse!), 2013 is all about growth. The ceiling appears to be quite high!

13 comments on Thoughts on a Killer Cyber Monday Week

  1. Rob says:

    Sounds like you had a great day – well done on all the hard work that lead you there!

    I’m conflicted in what I feel about your customers moaning they’re only getting 25% off vs 30-40% off though. I seem to remember somewhere previously you’d said about people buying things and then them going on daily deals and that you didn’t honour that, so why the different policy for this? When someone gets a discount, they take a gamble whether it’ll be higher or lower in future – it seems that by offering to give them the lowest discount even if they don’t qualify you’re setting a level of expectation in the customer. I can understand that you want to keep customers sweet, and providing you’re still making profit it’s all well and good but it does seem like the customers are being quite unreasonable. After all, if the price went up the next day instead of down you wouldn’t contact them and say “sorry, we’re actually going to charge you some more money for this”. Are the customers that do this regulars? If so, do they usually try and pull this kind of crap?

    • Adam McFarland says:

      This is a really good topic Rob. You are correct that our official policy is that we don’t match any discounts after an order is placed. We have however loosened our stance quite a bit compared to a few years ago.

      Having an employee handling customer service definitely changed things. His #1 priority is keeping our customers satisfied, and by being a little more flexible with this policy we’re empowering him to do that.

      Also – we can afford to. Money isn’t so tight, and the cost involved in satisfying a customer is worth it more and more.

      With that said, most of the year we’ll only honor a discount if the customer just slightly missed the deal (say, less than 6 hours on either side of it). We always try to push store credit over a refund because store credit ensures that they’ll come back and make another purchase.

      During this Cyber Monday week we were even more lenient though. It’s kind of one big sale with other little sales rotating through, so in most cases we took care of the customer. I’m not sure what the cutoff was, but the further away from the deal they were the more we’ll push credit. If they only missed the deal by an hour we’ll give the option of either a refund or credit, but as you get further away we’ll only offer store credit.

      We’ve discussed this quite a bit. It’s a really hard thing to manage because often times these people are good customers, even if they’re not the majority and they’re a little annoying. Detailing is a small niche so there is a finite number of customers out there for us. Then again, we like to stick to our policies and not be pushovers. We do still say “no” quite a bit – there are absurd requests daily that we shoot down.

      On the outside looking in, it would just seem simplest to have a policy and stick to it. But in real life there are all of these special cases that arise (I’m a good customer, I was out of town, my computer broke, etc) and when faced with spending $5 to satisfy the customer vs. saving $5 to piss them off it often seems worth keeping them happy. You end up with a pleasant email exchange instead of a nasty one, and you end up with a customer who thinks we listen to them as opposed to coming off as a big nasty corporation who doesn’t care. Up to that point we’ve done everything right to get them as a customer and it’s painful sometimes to lose them. Other times people are just asses and we’re fine with losing them as a customer :) We find ourselves taking things on a case-by-case basis more than you’d expect.

      • Rob says:

        I think that everyone goes a bit crazy on cyber monday/Black friday and you probably end up with people not acting at their best. I’d imagine that at this time of year the cross-section of customers you get is different from other times of year.

        The other thing is that it’s wise to prioritise long term customer satisfaction & retention over ego and sticking rigidly to policy. Customer service is a much bigger decision factor than ever before now that it’s so easy to switch where you shop online and I think that a lot of companies unfortunately don’t realise that for the sake of saving a little money here and there they could lose a customer for life. It’s up to them whether that customer is worth trying to keep though.

        Is there much stuff that your CS employees need to refer up to you? How have you decided what they can just do without conferring with you and what needs your approval?

        Do you notice much of a drop in sales right after a week such as the past one due to people bringing purchases forward?

        • Adam McFarland says:

          Is there much stuff that your CS employees need to refer up to you? How have you decided what they can just do without conferring with you and what needs your approval?

          We’ve given him discretion on how to handle customers as he sees fit. We always prefer he push credits instead of refunds, but he’s free to decide when to offer what. Anything unusual he’ll run by Greg or I depending on the type of problem so we tend to get brought in on the bigger things naturally. We don’t have any rule that’s like “any refund over $x you have to run by us”

          Do you notice much of a drop in sales right after a week such as the past one due to people bringing purchases forward?

          Yes definitely. In the past it was a big problem for us. December was one of our weaker months until last year. Last year we made it a point to aggressively look for new customers in December to try to make up for our regular customers who stocked up over the holidays. We upped our Twitter, Facebook, AdWords, etc. Search engine traffic had a boost from the prior year, mostly due to our blog. I think we ended up being up 50% or something along those lines, which pulled December up to about where we thought it should be relative to the other months.

          This year those things are much more integrated into our regular operations so there’s no specific push beyond just continuing to offer good deals and go after new customers. In the future we will likely send special segmented emails to any customers who didn’t purchase during the Cyber Monday Week. I’m not sure if we’ll get to that this year, but definitely next year for sure.

          This week’s sales have actually been pretty good following Cyber Monday. It’s only been a few days but we haven’t seen a catastrophic drop like we used to. The days have been pretty average sales days, which I consider to be a huge win.

          Good conversation :)

          • Rob says:

            It seems that DI continues to grow year on year at a rate higher than you expect. Are you still a small player in ecommerce detailing or are do you now have a considerable market share? Do you think there’s room in the marketplace for you to grow revenue significantly (eg. 5x, 10x)?

            Also, saw this: http://www.ssi-schaefer.de/blog/en/order-picking/chaotic-storage-amazon/ What are your thoughts?

          • Adam McFarland says:

            Are you still a small player in ecommerce detailing or are do you now have a considerable market share?

            I think we have considerable market share for our niche. Many of our competitors have other markets (manufacturing, international, motorcycle, boats, etc) so it’s hard to compare apples to apples. But I do think when you look at buying high end detailing products online in the US, we’ve got a solid share of the market. How big I’m not sure since none of the companies are public, but we get some indications here and there from suppliers that we’re not that far off from the big players.

            Do you think there’s room in the marketplace for you to grow revenue significantly (eg. 5x, 10x)?

            5x or 10x, probably not, unless we expand into one of those areas mentioned above. 2x or 3x though I think is very possible, and I might not have said that a year ago. We’ve had a lot of opportunities open up to us that I didn’t see coming, our wholesale program being the largest. Some of our best customers are now body shops and dealerships. That market could be huge for us in the next year or two.

            Re. Amazon chaotic storage: that’s awesome. I had never really thought about a warehouse space of their scale, but it totally makes sense when you read about it. I tried subscribing to that blog, it looks really good, but their RSS feed was broken unfortunately.

          • Rob says:

            That’s great that you’ve managed to get a decent share of the market, I remember back when you were shipping out of a basement!

            One thing I often struggle with is unreasonable customers. Customers who get angry at me, think I’m trying to screw them over etc. With some people there just seems to be no amount you can do for them that will satisfy them. You’ve said with the volume you’re doing at the moment unfortunately means you’ve got to deal with this more and more regularly, even though it’s still only a very small proportion of people that are like this. Does that feeling of dread when opening an email from such a customer ever go away?

          • Adam McFarland says:

            Does that feeling of dread when opening an email from such a customer ever go away?

            It has not for me, and I’ve opened a lot of those emails over the years. Watching Greg or Reece open an email, it seems that they have that feeling as well. I think if you care, it’s always going to be painful (as an aside: it’s kind of nice that Reece cares that much since he’s not an owner).

            We each have our ways of dealing with it. I like to answer the person immediately to try to resolve the situation ASAP. I hate that there’s someone out there who isn’t satisfied, even if they’re being unreasonable. I think the other guys like to take a break and come back to it later to prevent saying anything they’d later regret. I certainly risk that but I don’t think I’ve ever actually regretted anything I’ve written so I’d rather get the weight off of my chest as quickly as I can. Even when I’m pissed I think my emails come off pretty level-headed.

            But…I do dread opening my inbox some days because of what might be in there. Not always, but sometimes when I’ve had a bad week of emails I just want them to stop!

  2. Dale says:

    Adam, congrats! It’s great to follow your progress… We broke our record for last year too for Power Pro Bathroom Cleaner by a factor of infinity. :)

    • Adam McFarland says:

      Thanks Dale!

      Congrats to you as well…can’t have any bigger growth than that! Looking forward to hearing more about how Power Pro is doing. I saw the pic of your latest shipment on your blog. That’s a pretty big pallet!

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