September 28, 2011, 4:31 PM

Every online holiday shopper has his (discounted) price

In the case of e-mail offers, 30% off for a limited time might be right.

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Online retailers hoping to build sales via e-mails this holiday season might find their best returns from limited-time discounts that offer a percentage off a purchase, according to research released today by Experian Marketing Services.  

A 30% limited-time discount offer appears to work better than other e-mail marketing messages in motivating consumers to buy, says the direct marketing and research firm, which based its finding on an analysis of retail e-mail messages. “Limited-time offers do provide a substantial life in e-mail campaigns and this will continue into this holiday season,” said Bill Tancer, head of global research for Experian Marketing Services, during a holiday readiness webinar that Experian held today.

Experian data show that an e-mail marketing message with a limited , percent-off discount offer lifts transaction rates by 34% and revenue by 40% compared with an e-mail with another type of offer; Experian analyzed e-mails that contained various types of retail offers, but the research firm did not say how many e-mails it tracked, or when it did so.  

An e-mail with a limited time, dollars-off promotion, by comparison, generated a 25% transaction lift and a 27% revenue lift compared with other e-mail marketing messages. Timed tiered offers generated a 13% transaction lift in transaction rates and a 16% revenue lift per e-mail. Such tiered offers might enable the consumer to receive half off the price of an additional item after making an initial purchase.

Years of online deal seeking has conditioned consumers to expect discounts, Tancer says, and e-retailers responded last year by increasing the discount amount. The percent-off discount offered most frequently during the 2010 holiday season was 30% off compared with 20% off in 2009. “30% rules in November and grows gradually from there. Leave the 60% off discounts to the very end when you need to get rid of inventory,” he says.

The data also show that the holiday season has become longer, with consumers starting to search online for information about Thanksgiving weekend deals in late September and early October instead of waiting until November as they did several years ago. In response, e-retailers are increasing the amount of e-mail they send late in the season. E-mail volume last year, Experian data show, was up 34% from Dec. 22 through the end of the year compared with the same period in 2009.

As of last week, visits to the top 500 e-retail sites tracked by Experian were up 17.5% compared with the same week a year ago. Tancer cautions that this is not indicative of e-retail transactions, however, as web site traffic continues to trend up even in poor economic times as consumers more carefully research purchases before buying, regardless of whether that transaction happens online or off.

Economists project that holiday retail sales will grow at a more subdued pace this year compared with 2010. E-retail sales this holiday will grow 13.5% compared with 16.5% during the 2010 holiday shopping season, according to research firm Kantar Retail. The firm projects retail sales, as a whole, will increase 2.8% during the season, half the rate they increased at last year. Projections from consulting firm Deloitte say non-store retail sales, largely driven by e-retail, will increase 14% this year, while overall retail sales will increase 2.5% to 3.0%.  

Going into the busy holiday season, Tancer says there’s no reason to think that peak traffic days will differ from last year. He predicts that the most popular days for web traffic to retail sites will be Thanksgiving Day (Nov. 24), the day after Thanksgiving (Nov. 25), the Monday following Thanksgiving (Nov. 28)and the day after Christmas (Dec. 26).  

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