Target also leads the pack when it comes to paid search spending, a new report finds.
A promotion with PayPal, adding a comparison shopping engine, a more focused search marketing campaign—such changes helped some online merchants post solid holiday sales gains. Now e-retailers focus on generating post-Christmas traffic.
Several of the online retailers that posted strong holiday season gains did it by fine-tuning their marketing strategies, such as adding another comparison shopping engine or taking advantage of a promotion with payment service PayPal. Now the focus turns to generating post-holiday sales, and some major retailers are offerings web-only specials and making sure consumers know they can use their gift cards online.
Ritz Interactive credits a promotion that offered 10% off when paying with PayPal for helping to boost holiday sales about 20%. “The promotion was not continuous, so we were able to track it and see patterns, and there was substantial evidence that when we were running the PayPal promotion we got an additional lift,” says Fred Lerner, president and CEO of Ritz Interactive, which operates 17 retail web sites selling cameras and accessories, as well as boating, fishing and golfing gear. Ritz Interactive, which is not part of the Ritz Camera chain, is No. 114 in the Internet Retailer Top 500 Guide.
Lerner says he was surprised at the impact of the PayPal promotion and plans to pursue similar deals with PayPal, a subsidiary of eBay Inc. He says Ritz also benefited from the introduction of three hot new cameras this season by Nikon and Canon, and by adding consumer electronics products to its sites. Lerner says Ritz Interactive, which sells exclusively online, is likely to finish the year with $110 million in sales, a 20% growth rate that he aims to maintain in 2008.
For Golfballs.com, the key marketing change was hammering home in search-page ads the message that the online-only retailer can personalize golfballs, towels, hats, shirts and bags within a couple of days, says Steven Broussard, director of marketing and e-commerce. The retailer included text about personalization even in ads for keywords that did not mention personalization, such as “golfballs,” and found that helped drive sales. “I can see how they came to us, and there were a lot of just ‘golfball’ searches that ended up with personalized golfballs in their shopping cart,” he says.
Broussard says at least 85% of the revenue from search marketing campaigns came from ads with Google, although the retailer also advertises on other search engines. Golfballs.com is No. 467 in the Internet Retailer Top 500 Guide.
Sales were up “probably well over 100%” compared to last holiday season at TheBowlCompany.com, according to Bob Dumont, owner of the online-only retailer that sells fine china and expects to generate about $750,000 in sales this year. One way Dumont boosted sales was to list his products with comparison shopping site NexTag, in addition to Shopzilla and PriceGrabber. Another was to allow customers to register with the site, which provides Dumont with e-mail addresses he can use to promote repeat business. He says 40% of his sales come from repeat customers, as many consumers buy place settings one at a time as they can afford them.
Dumont plans to send those customers coupons and reminders about post-holiday sales. “We’ll have a couple of season-ending sales,” he says, “but nothing too dramatic. We’re not discounting things 50%. Traditionally, January is a good month for us because people get their Christmas money and finish off their tables and add more place settings.”
Online and catalog toy retailer Sensational Beginnings, No. 428 in the Internet Retailer Top 500 Guide, will be putting more money into online marketing and sending out fewer catalogs based on the results of this holiday season, says Rusty Bailey, director of web technology. While overall sales were disappointing, Bailey says, “the web did beautifully. It was 60% of overall sales, which is really strong.” Online sales represented 54% of the company’s business last year.
Among larger online retailers, a notable post-Christmas strategy this year is to post prominent reminders to consumers that they can redeem their gift cards and certificates online. Among the sites with such reminders are Target.com, Amazon.com, Walmart.com and Macys.com. While many retailers are offering post-Christmas specials, Nordstrom and Best Buy are featuring online-only deals.