The holiday stampede is coming: shoppers, huge crowds of them, all equipped with credit cards and all eager even crazed - to buy. Forrester Research predicts that online sales will increase 22 percent to $172 billion in 2005. Much of that growth will take place in the season we're now entering.
That's great news, but only for those e-tailers who are ready for it. If your online store is properly prepared to mine the holiday gold rush, you'll be smiling in January. If not, you'll miss the once-a-year bonanza.
The stakes, in fact, are even bigger than a seasonal sales bump. Experts note that the online shopping population increases in each holiday season, and this increase translates to more shoppers for the following year. In other words, an e-tailer's performance in the holidays can affect their sales numbers for a long time to come.
So what should online merchants do to get ready for the all-important holiday rush?
We spoke with Lauren Freedman, president of the E-tail Group, which has conducted a holiday "secret shopping" program for 100 Web sites for several years. We also spoke with search engine guru Brad Fallon, CEO of Smart Marketing, about holiday search engine strategy, as well as with Rich Riley, Yahoo's small business vice president.
The To-Do Check List
Optimize onsite search: Onsite search is even more important during the holidays than in the rest of the year, "because people are even more time-starved," Freedman notes. There's less browsing and more emphasis on finding and buying it fast.
Not only should merchants take a look at how their onsite search is performing, they should make sure that it showcases top selling items. "Really make that location very substantial and well-merchandized," she says. "Romance it a bit with featured products and promotions in that particular category."
Clean up errors: Something as simple as a broken link is merely a minor irritation in July, but can cause a mass exodus when the rush is on. Does everything on your site work perfectly? "Shop your own site all the way through check-out," she recommends. While you're at it, shop your competitors' sites all the way through, too. What are they doing that you should be doing?
As the holidays near, it's essential that merchants use their Web analytics software to find out where people are leaving their site and on what page. Is there are hole that needs to be plugged with improved navigation or a more compelling offer?
A/B testing on promotions: "I would build a portfolio of promotions, and then start A/B testing them to figure out what works," Freedman says. "You're not going to hit it right one hundred percent of the time."
Even deep in the holiday season, keep experimenting with offering contrasting sales offers, and monitor them to see which gets the better response, she recommends.
The first real rush of shoppers is around the end of November, Freedman notes. But even at this Thanksgiving up-tick, "you still have three weeks to perfect the experience there's lot of tweaking to come."
Free shipping: It's commonly agreed upon in the e-commerce industry: free shipping excites shoppers like few other things. "Free shipping promotions were very popular last year," Yahoo's Riley notes.
WebTrends research indicates that 63 percent of online retailers plan on using free shipping in the 2005 holiday season to boost sales.
Notes Freedman, "Decide how you want to handle the free shipping issue." While free shipping can't be offered across all categories and price levels, it's worth some soul searching: how low can you go?
Given that free shipping is such a sales booster, and the holidays offer a once-a-year chance to attract ongoing customers, it may be worth shaving a few points off the profit margin by offering a more attractive short-term, free-shipping policy.
For multi-channel retailer/e-tailers: For those businesses that have both brick and mortar and online stores, "really play up what the store can do, particularly from a last-minute shopping standpoint," Freedman says. Particularly attractive to customers: the convenience of being able to return an item in-store. Additionally, "in that last week you might want to use your e-mail to drive people to your stores."
Review e-mail plans: A site's e-mail marketing plan should be carefully considered in this all-important period, including the frequency of mailing and the nature of the messages. "There's a lot of business that will be driven from that," Freedman says, noting that increased frequency might be a good idea. "I think [e-businesses] are being a little more aggressive, and there's nothing wrong with that, as long as what you have to say is relevant and timely."
Based on the 100 e-merchants that Freedman monitors, "I can see that there are some pretty active e-mailers."
Gift certificates: Gift certificates have zoomed in popularity recently, and they're perfect for e-tailers they don't need to be shipped and a gift giver can send them through e-mail. "If you have a gift certificate, promote the hell out of it throughout the site," Freedman notes. "Three out of four Americans bought a gift certificate in the last holiday season."
Create a gift center: To help direct hurried shoppers, build a site area that is clearly labeled as a "Gift Center." "Follow the timeless retail rule - put your best items front and center," Freedman says. This gift suggestion area can take many forms: a best-seller list, a featured-sellers list or a wish list. Use your imagination.
Make shipping cut-off dates clear: Busy shoppers want to know how late can they purchase and still get delivery by a given date. Don't force them to guess; your competitor will make it clear.
Value-added promotions: This tactic of offering a gift or other discount with purchase is a timeless retail strategy and will be a popular this holiday season. WebTrends research reveals that 42 percent of online retailers will offer a gift with purchase this season; 33 percent will offer a repeat buyer discount; 29 percent will use a bundle offer "buy two, get a third one free;" and 28 percent will offer an early-shopper discount buy by a certain date and get a better deal.
Service: "Customer service counts for a lot, particularly at this time of year," Freedman says. Quick delivery and rapid e-mail response 24 to 48 hours or less are key. Most importantly, "if you take care of them, they'll pay for it. And they'll probably be incredibly loyal customers, because they'll remember that you solved the problem."
It's a good idea for merchants to e-mail their own customer service people, to check response time and accuracy. Are they on the job?
Merchandising the product pages: Because many customers come to a merchant's site through an external search engine, they often land on a product page so each of these pages must be effectively merchandized.
"Make sure you have a lot of clear information. You may want to have guarantee information and customer service information right there," Freedman says. These pages also need relevant cross-sell ideas. "Typically three or four related ideas and, if possible, offer the opportunity to zoom into the product." (The ability to zoom in on a photo is getting ever more important, she notes.)
"The more information the customers have, the less likely they are to contact you, and the more likely they are to buy."
Overall, prep for the holidays: It's important to actually dress up your site with holiday-specific imagery, notes Riley, "You want people to know that you're dialed into holiday shopping."
Also important is careful holiday planning. "Plan ahead and adjust from there," Freedman notes. "Put in some critical check points, like November 15th and post-Thanksgiving, and then handle it on a weekly basis." This planning includes ensuring that there's a ready inventory supply of hot products.
This planning is critical, she notes, because "you don't get those weeks back - you don't get a second Christmas."
Search Engine Marketing for the Holidays
One thing is certain for the holidays: the cost of search engine marketing will increase. As more e-merchants vie for popular keyword terms in Google and Yahoo, bids will inevitably climb higher.
But merchants shouldn't be discouraged by these higher rates, says search engine expert Brad Fallon. In the holiday season, merchants can expect four-to-six times more traffic, he says, and "don't be surprised to see triple the conversion rate."
Therefore, during the holidays, "you might be able to spend quite a bit more on the ad and still make money."
To determine whether higher-priced keyword bids are justified, monitor your conversion rate. Since sales cycles tend to be briefer during the holidays, merchants will soon know if higher keyword expenditures are justified, Fallon notes.
"Fortunately a lot of the items that are bought for Christmas are not things with long sales cycles. People are trying to knock things off their list," he says. "It's the difference between selling wedding favors, which the brides will shop for over a period of weeks, and baby gifts, where people want to cross something off their list and be done with it."
"If you're tracking your conversion rate by keyword, as you should be, you should be able to be able to get pretty quick feedback."
Shoppers use different search keywords during the holidays than they do during off-season. For example, shoppers often combine the product title with keyword phrases like "holiday gift for boys," or "Christmas gift for teenage girls."
Before any keyword buy regardless of season merchants must research what keywords shoppers are using to find given products. This research is often done with the WordTracker and Overture keyword tools.
However, these tools are limited in the holiday season because they display only the last few months of data they don't reveal what keywords shoppers used in the last holiday season.
To research holiday-specific search terms, Fallon recommends merchants visit KeywordDiscovery, which has a special section dedicated to seasonal searches.
Finding the right holiday-related term can be a goldmine, he notes. "You really have to put some thought into the keyword research, and if you do a good job, you might get some really good deals on bids where your competitors have missed the ball."
Boosting Unpaid Search Results
"Rather than just putting a Santa hat on your homepage, and some holiday decorations which is probably a good idea you want to think about having some specific landing pages for the keyword bids that include 'Christmas' and 'holiday gift,'" Fallon says. These pages need to be optimized with the corresponding title tags so that they show up in the unpaid search results.
"If your Web site has been around for awhile, it's already gotten through the Google sandbox, and if you put up a new page on your site, it's likely to be indexed and show up in the search results fairly quickly," Fallon says. Also, "MSN and Yahoo tend to index and spider a page pretty quickly."
"If you start soon, you could still build some landing pages for keywords for Christmas-specific searches."
Finally, don't give up immediately after December 25th, Fallon notes. "The week after Christmas tends to be really strong, so think about promotions to take advantage of that traffic don't forget to have your post Christmas sales."
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