October 7, 2010, 10:28 AM

How e-retailers can have a merry holiday season

Here are some hints: Customer service, coupons and free shipping.

Lead Photo

Online retailers can find it tough to offer lower prices and free shipping when margins are slim, but experts say e-retailers who refine their online marketing tactics may experience a very merry holiday season without giving away the store.

Retailers can help themselves by telling consumers who they are, where they are and how to get in touch with them—for instance, by putting the retailer’s phone number and e-mail address at the top of every web page. “People want to deal with real people, so post some photos of your business, personnel and inventory,” says Luis Hernandez Jr., CEO of TheMotorBookstore.com, which sells repair manuals and how-to books. “Don’t make it hard for your customers to find you and talk to you.”

With shoppers on the hunt for the best prices, retailers offering a coupon or promotional code should make sure shoppers know about it. Many coupon sites let e-retailers list coupon codes for free, such as RetailMeNot.com and CouponCabin.com, so use them, Hernandez says. Also list the promotional code prominently on your site, such as on the home page header and on order pages.

If a shopper uses an invalid code and abandons the purchase, send him an e-mail with a valid code in it, says Charles Nicholls, founder of SeeWhy, a marketing consultancy. “This is somebody who is clearly looking for a deal and captured a code from an affiliate. The cost to getting someone to that point in the funnel is expensive. Sending them a valid code that convinces them to purchase is not,” he says.

Finally, since consumers love free delivery like Santa loves cookies, e-retailers should find a way to offer it. After all, competitors likely will. A recent survey from The E-tailing Group Inc. found that 86% of online retailers are planning on offering some form of it this holiday season. The key is to determine the break-even point where absorbing the cost for shipping still leaves an acceptable profit margin. A “free shipping on orders greater than $49” offer can induce a shopper with $45 worth of goods in her cart to throw in an extra pair of socks to get free shipping, which means incremental revenue for the e-retailer and a satisfied customer, Nicholls says.

E-commerce sales will increase 15% during November and December over the same months last year, according to a projection this week from the National Retail Federation, a trade group. Generally, projections about the upcoming holiday season have painted a picture of cautious optimism.

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