Retailers shift their ad spending from TV, radio and print ads to digital ads.
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Rather than focus heavily on a specific day, such as the Monday after Thanksgiving, Zazzle, No. 211 in the Internet Retailer Top 500 Guide, sought to spread out its sales throughout the holiday season. Even so its highest order volumes were on the Friday after Thanksgiving, Cyber Monday and the two following Mondays.
ThinkGeek sought to keep sales going throughout the entire season by spreading out the release of its exclusive products, such as canned unicorn meat and a Star Trek Enterprise pizza cutter. Product releases started in early October and ended on Dec. 14, says Jamie Grove, the company’s marketing chief whose official title is director of evil schemes and nefarious plans.
“The trend has been over the last few years that people buy later and later in the season, closer to their actual need,” he says. “But I’m not sure that was the case this year.”
By focusing on lower-priced items, the retailer also cut back on the need to discount throughout the season, says Grove. “We kept tighter reins on things this year by getting smarter in terms of our marketing and offering products at lower price points,” he says.
That led to a slight decrease in average order value, but a jump in the number of items per order, says Grove. And, since many of the products that ThinkGeek sold were its custom products that have higher margins, the retailer “came out in a positive way.” He declines to disclose actual figures.
Thinning down inventory
Niche Retail, No. 401 in the Internet Retailer Top 500 Guide, operates multiple e-commerce sites, including TipToeTurtle.com, SuuntoWatches.com and JoggingStroller.com. Niche Retail president Jeff Grice says holiday sales at some properties were about equal as last year, while others were up in the range of 5-10%. Overall web traffic was up 10% from 2009 and the average cart size was up about 20%, he says.
That is respectable, but what really stood out this holiday season was that Niche Retail’s inventory estimates were right on the spot. The company reduced its post-holiday inventory levels by approximately 40% from last year, but still had enough stock to satisfy orders during the season. “For 2010, a major push was to have the right amounts of inventory. We planned this SKU by SKU for major products. We did not have single situation where we had orders but no inventory,” Grice says.
Not every retailer hit such high marks this holiday season, though, offering reminders that for many consumers, times remain tough. At One Way Furniture, No. 406, holiday sales and traffic were slightly weaker compared with 2009, says CEO and founder Mitchell Lieberman. He says the company’s sales were strong from January to May this year, but fell back in the second half. Lieberman attributes the swing to the nation’s economic uncertainty and the weak housing market. He’s hoping for a stronger recovery in 2011. “We expect to see single-digit growth for 2011. However, most growth is expected in Q3 and Q4,” he says.
Lieberman also says One Way Furniture’s holiday sales period seemed shorter this year. “Most years our typical holiday rush lasts between four and six weeks. In 2010 it was only three to four weeks,” he says. Christmas Day falling on a Saturday also influenced post-holiday sales, he says, because more people were traveling home rather than shopping over the weekend. He says sales on Christmas Day were at one of the lowest points in seven years, but that sales later rebounded as shoppers looked for discounts.
Late season discounts
Consumers seem to be well trained to look for online discounts very late in the year. Experian Hitwise, an Internet traffic monitoring service, notes that visits to the 500 largest U.S. retail web sites by traffic volume rose 3% year over year on the day after Christmas, continuing the same increase that occurred on Christmas Day. Hitwise analyst Heather Dougherty noted in a Dec. 28 blog post that apparel and accessories retail sites accounted for the largest share of visits on the day after Christmas, at about 25%.
Dougherty also notes that department store and home-and-garden retail sites attracted more than 5% higher traffic on the day after Christmas than last year. Videos and games retail sites showed a drop in visits of some 5% on Dec. 26.
Lieberman isn’t the only retailer hoping to boost profits in the days between Christmas and New Year’s. Pet supplies retailer DrsFosterandSmith.com, No. 105 in the Top 500 Guide, had a decent enough holiday season to enter the new year with a very optimistic outlook, says Gordon Magee, the company’s Internet marketing and media manager. But for the next few days the retailer will focus on clearance sales and its new promotions, free shipping for orders of at least $49, along with free shipping on all flea and tick products regardless of order size.
Back at eBags, the retailer is heading into 2011 on the back of a 43% year-over-year increase in post-holiday sales, Cobb says. He can’t pinpoint the reason, but says the storm could have something to do with it.