Looking ahead to the holidays
It's never too late—or too early—to plan for a bigger
and better holiday shopping season
By Paul Demery
To say that the holidays spike sales is a huge understatement at Wine.com, where customer traffic and orders surge 1,000% during the Christmas shopping season—and account for 80% of annual sales.
Putting even more of a squeeze on things is that most holiday traffic crowds into the 11 days from Dec. 10 to Dec. 20, as shoppers rush to send their gifts of wine and wine accoutrements in time for pre-Christmas delivery.
For a web-only retailer with $45 million in sales last year, planning for the holiday season is a year-round job geared toward both getting the most out of the holiday season and extending the peak selling period. "For us, holiday is key, but we do everything we can to get people to order earlier," says Geoff Smalling, the retailer's chief technology officer.
The year of transparency
Careful preparation for the holiday season is always important because many retailers get 35% or more of their annual sales during that festive period. But it's even more important in 2010 because of the broad deployment of sophisticated mobile phones that now let consumers—including in stores—compare prices, check inventory and read product reviews.
"This will be the year of retail transparency, because holiday shoppers will be able to see exactly what retailers are doing," says Paula Rosenblum, managing partner with research and advisory firm RSR Research LLC. "With consumers more in control, it ups the ante for retailers to do everything well during the holiday season."
While few retailers will achieve perfection during the peak holiday season, there are plenty of examples of how merchants are taking steps now so that they'll be at least near-perfect come the holidays in areas crucial to their performance. Some steps are planned several months to a year or more ahead of the fourth quarter, while others may be relatively late measures taken in late spring or summer. They cover the broad scope of e-retailing from marketing and merchandising to site performance and shipping.
With m-commerce the rage among a growing number of consumers, many retailers are placing mobile strategies at the top of their Christmas lists. Wine.com, which launched an iPhone shopping app last December, will perk it up for the 2010 holiday season with a new mobile "Wine & Dine" feature that suggests wines to purchase for holiday meals. The retailer is also developing a mobile app to run across multiple mobile operating platforms, including Android, Symbian and BlackBerry as well as the iPhone, Smalling says.
New from Google
Retailers are also finding new techniques to reach and engage holiday shoppers through the more conventional means of e-mail and search engine marketing.
Search marketing presents marketers with new opportunities for making the holidays happier. Multichannel sports gear retailer Sun & Ski Sports, for example, is working with Google Inc.'s new re-engagement paid search ad program to build on the successful online marketing efforts that brought it a surge in sales on the Monday after Thanksgiving last year.
The Houston-based retailer's e-commerce site, SunandSki.com, relies on a strong start to the holiday season to kick off its peak winter selling period, and a good part of its success last year stemmed from its ability to re-engage inactive customers through e-mail marketing promotions, such as 20% off any item, leading up to the holiday season, says Scott Blair, director of e-commerce and interactive marketing.
This year Sun & Ski Sports plans more e-mail re-engagement promotions, but it's looking toward even better peak season performance by participating in Google's new re-engagement program, which enables retailers to follow site visitors with banner ads after they leave without purchasing a product, Blair says.
Many of Sun & Ski's customers routinely spend several days visiting multiple web sites to research high-ticket items like skis and surfboards, so it's not unusual for them to visit SunandSki.com and continue their research on other sites including social networking sites, blogs and publishing sites, Blair says.
With the new Google re-engagement program, Sun & Ski will be able to stay top of mind with those shoppers even after they leave SunandSki.com by showing them ads on other sites related to the product they initially searched on.
The system operates as part of Google's AdWords program and lets advertisers choose the type of sites participating in Google's content network to display its ads. The ads Sun & Ski runs will mostly appear on content sites, Blair says. Google is offering either a CPM (cost per thousand impressions) or pay-per-click model.
"This could pay big dividends," Blair says. "If a customer comes to our site looking for a North Face ski jacket, we can re-target them with an ad for a North Face jacket if they go to another content-based site to continue researching."
Among other new ad programs from Google is one that lets marketers dynamically change ad copy—a system that retailers should test well before the start of the holiday season, says George Michie, CEO of search marketing services firm Rimm-Kaufmann Group. Retailers promoting free shipping during the holiday shopping season, for example, could use the new system to automatically delete the free-shipping offer on the last day that they could offer it for pre-Christmas delivery.
Retailers could also use this to automatically change promotional pricing in search ads to coincide with planned promotional periods, such as during Thanksgiving week or the final week before Christmas. To support this system, retailers or their marketing agencies set up direct data feeds to Google, Michie adds.
Get ready for Bing
And just as retailers are gearing up their search marketing for the peak holiday season, Microsoft Corp.'s Bing will present them with a whole new opportunity—and challenge— when Bing takes over as the search engine on Yahoo Inc. sites later this year, Michie says.
"We're going to have an interesting phenomenon of Yahoo traffic turning into Bing traffic over the third and fourth quarters," he says. Bing and Yahoo combined account for about 28% of the search market, while about two-thirds of searches take place on Google.
A key pre-season tactic to prepare for paid search campaigns on the new Bing, as well as on Google, Michie says, is to carefully analyze a retailer's year-ago holiday season paid search results. That means charting how search marketing-driven conversion rates and average order values, instead of just search traffic volume, trended in November and December.
If, as in the case of one Rimm-Kaufmann client, conversion rates and average order values peaked in the second week of December, the marketer can plan on raising its bids on paid search keywords in December 2010, he says.
As merchants attract more holiday shoppers to their sites with better marketing, their web pages must engage shoppers.
Heading into the 2009 holiday season, Wine.com addressed a void in its site search that was leaving popular wines without sales-generating recommendation and review content when new vintages of those wines arrived, such as a 2006 Cabernet being replaced by the 2007 version. It can take weeks or months for a new vintage to build up a base of recommendations and reviews—a particular problem for Wine.com when the new vintage appears close to the start of the peak shopping season.
Wine.com worked with RichRelevance, its recommendation engine vendor, and its site search provider, Endeca Technologies Inc., to make the recommendation and review content from prior vintages stay with the new wines—so at least shoppers could read up on the label's history.
The retailer also worked with the two vendors last fall to build more personalized recommendations into faceted search, so that it could offer recommendations based on wine type and winery location, whether a shopper searched its site for Pinot Noir from Napa or Pinot Noir from France. Although that project was not done in time for last year's holiday season, it was completed by the first quarter of this year—in plenty of time to test it for the 2010 holiday season, Smalling says.
The more online retailers do to attract and engage throngs of holiday shoppers, the more they need to ensure their infrastructure can handle the heavier traffic. Apparel designer and retailer Jones Apparel Group Inc., which provides ongoing updates of inventory availability on its web site, uses AlertSite to check that its page load times meet desired speeds during peak traffic periods.
If necessary, Jones may slow down its automated inventory updates to take pressure off its servers and allow pages to load more quickly. "Faster page loads are more important than near-real-time inventory status," says Michael Hines, vice president of web marketing and development.
Men's apparel retailer Bonobos has improved its ability to ship later in the day—and later in the holiday season—and still deliver in time for Christmas, by improving how it communicates with its logistics partner, Quiet Logistics, says John Rote, who oversees the retailer's warehouse and customer service operations.
"We've learned from prior holiday seasons that, rather than communicate with Quiet Logistics reactively, we need to let them know 30 to 60 days in advance when we plan to have holiday promotions or launch new products," Rote says. "That makes it easier for them to allocate resources."
"By telling them ahead of time the cubic volume of goods that need to be shipped," he adds, "they can have the right packaging queued up and ready to go."
Bonobos automatically transmits its web orders to Quiet Logistics, which provides the retailer's warehousing and fulfillment facilities. By maintaining strong communications with Quiet Logistics about expected shipping volumes, the retailer can promise customers that it can ship orders received by 4:30 p.m., though in many cases last year it shipped orders that came in as late as 6 p.m., Rote says.
For all the planning retailers do for a successful holiday season, there are always late-season steps they can take, experts say. One tactic can involve a close review of a retailer's products and devising a way to run promotions that appeal to last-minute shoppers.
When Wine.com was looking for a way to increase sales late in the holiday season last year, it decided on Dec. 18 to heavily promote offers for its wine clubs and gift certificates. "Customers could e-mail a gift wine club certificate right up to Christmas Day, then the wine would ship later," Smalling says. "We saw a jump in wine club memberships and gift certificates."
As Wine and other retailers have shown, it pays to never stop thinking about how to spread cheer for the holidays.
About Quiet Logistics
Quiet Logistics is the first Fulfillment to Consumer (F2C) services provider that delivers a complete outsourced solution that leverages ground-breaking material handling technology with a fully integrated warehouse management system, other appropriate automation technologies and parcel shipping systems. Quiet Logistics "Consumer Driven Fulfillment (CDF)" services is an alignment of best-in-class operations experience and a fully integrated technology platform with a simplified business model which considerably improves distribution throughput, accuracy, scalability and flexibility at a lower cost.