A Forrester report points out challenges faced by some business-to-business firms working online.
Online sales gain from a snowstorm that kept many East Coast shoppers stuck inside.
Give Jon Hoch a choice between the Christmas shopping season and a snowstorm, and he’ll probably side with the blizzard, even if the holidays turn out better than expected.
Hoch, founder and CEO of Power Equipment Direct Inc., never considered the holidays a big deal for the web-only retailer, which operates nine web sites that sell gear ranging from generators to snow blowers. “Who wants a generator for Christmas?” he says. This year, however, the company, No. 302 in the Internet Retailer Top 500 Guide, ran its first ever Cyber Monday sale, when shoppers could snag items at prices 10% to 40% below normal. The company marketed the Monday-after-Thanksgiving promotions via Facebook, Twitter and paid search ads, and then enjoyed sales that were nearly triple over the same Monday last year.
But then came another welcome surprise: the massive snowstorms that moved through the Northeast in the days after Christmas. “Monday was our biggest sales day ever,” Hoch says. “Our warehouse inventory was cut in half in one day and it was our biggest day ever for web traffic as well.” While Power Equipment Direct typically experiences sales spikes after storms, Hoch says Monday’s increase was 50% greater than the previous record, thanks not only to the severity of the storm but also such factors as improved product pages and having enough inventory to meet demand. “Usually after Christmas, we are just dealing with a few returns and closing the books. But this year was a different case entirely.”
As retailers take a look back at the holiday shopping season, one marked largely by success, some are also reporting that the bad fortunes of all those consumers trapped at home behind snowdrifts has turned into good luck for e-commerce. Some retailers also are seeing signs that shoppers are looking for post-holiday discounts, while others hope to end 2010 on a bang with discount offers designed to lure in those consumers who’ve yet to empty out their wallets and purses.
Records abound for e-retail as web merchants take account of their holiday sales. At eBags.com, for instance, sales between Thanksgiving and Christmas increased 35% year over year, says Peter Cobb, co-founder and senior vice president of the online retailer. “Five of the six largest days in history were set this holiday season,” he says.
And the fun for e-retailers continued as consumers slept off their holiday feasts and battled their way home. Web-only footwear retailer Shoebuy.com’s strong holiday sales—running at a double-digit percentage increase over the 2009 holiday season—continued into the week past Christmas, says chief marketing officer James Keller. “Our holiday season was robust with over 10 million visitors in just November alone and our 11th holiday season of double-digit growth,” he says. “Post-holidays have not seen any slowdown, which we attribute possibly a little to the weather.”
The Christmas weekend blizzard that hit the Northeast and Mid-Atlantic states may be helping online retailers clear out inventory. “A bad forecast will keep people at home,” says Scott Bernhardt, chief operating officer at Planalytics Inc., a firm that tracks the weather’s impact on retail transactions and store traffic. “Internet traffic always spikes when people are buried in snow,” he says. As major rainstorms hit the West Coast in mid-December, for example, that region saw web traffic jump 13% year over year. While some of that traffic is likely due to organic growth, web traffic increased less in regions where the weather was milder. That growth was only 3%, for example, in the Central Midwest.
Shoebuy, No. 89 in the Internet Retailer Top 500 Guide, also attributes its strength in post-holiday sales to an expanding product line and a growing number of shoppers signing up for its private sales at events.shoebuy.com. Shoebuy—which in addition to footwear sells apparel, handbags, accessories and special selections like Cuisinart cutlery, Wedgwood crystal and Mikasa tableware—signed on with more than 100 additional brands just before the beginning of the holiday season. Helping to sell that expanded line of merchandise is a steady influx of more than 5,000 people per day signing up for its private sales at events.shoebuy.com, Keller says.
“We are very well positioned to move lots of inventory for our brands as we move into the new year,” he adds. “If this holiday season is any indication, we expect an amazingly strong 2011.”
At Buy.com, the retailer’s daily deals are moving fast—far outpacing their performance a year ago, says vice president of marketing Jeff Wisot.
“Surprisingly, we’ve been selling out of several of our daily deals post-holiday within just a few hours,” Wisot says. “Last year, similar deals may have taken days to sell through. Even $1,000 HDTVs have sold out in just hours after promoting them. Luckily we receive new inventory and fresh deals in all categories on a daily basis thanks to our Marketplace partners.”
Focusing on customer retention throughout the holiday season proved successful for Zazzle, a web site for designing and selling customizable merchandise, as it grew its one-year retention rate 21% over 2009’s fourth quarter, says Michael Karns, the retailer’s director of consumer marketing and international development. That repeat business helped the retailer’s fourth quarter sales grow 70% year over year, though Karns declines to provide specific numbers.
The retailer focused on e-mail marketing to drive customer retention.
“We spent a lot of time figuring out how to do a better job of targeting our e-mails to try to get customers who have shopped with us before to come back,” he says. That translated into 92 distinct e-mail messages sent out during the four quarter—each of which was segmented based on user behavior. Those messages ranged from the purely informational to offering discounts up to 75% off.