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.
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.
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.
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.
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.
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.
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!