The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
It’s never too late—or too early—to plan for a bigger and better holiday shopping season.
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.