Holiday Observations, Predictions, and Recommendations

As experts and analysts fine-tune their predictions for the upcoming online holiday season, marketers are ramping up promotional efforts to capitalize on the ever-growing number of online shoppers. By some estimates, over a third of U.S. households (nearly 37 million) will have shopped online by year’s end. Merchants have cause to be optimistic. In fact, a new study from Shop.org and BizRate found 98 percent of merchants expect online sales growth this year.

As the industry celebrates its 10th anniversary, there’s a sense this year is unlike any before. It is. Message bombardment, growth of and conflict between integrated marketing efforts, spam, the political and economic environment, and increased focus on return on investment (ROI) make this holiday season somewhat different. That said, I offer you some 2004 holiday observations, predictions, and recommendations. I hope they help you optimize your current and future marketing efforts in this evolving marketing place.

The Early Bird Catches the Worm

Conventional wisdom defines the holiday season as the period between Thanksgiving and Christmas. The Shop.org/BizRate study finds online consumers are more likely to start holiday shopping earlier than offline consumers.

Over half (53 percent) of respondents indicated they planned to begin their holiday shopping by early October. Yet only 14 percent of merchants expected to launch their online holiday marketing promotions by that time.

Despite 10 years of online experience and planning, marketers still to poorly time their efforts. Although shoppers are starting early, more than 72 percent of marketers indicate they plan to begin holiday marketing at the same time as they did last year.

It’s a competitive marketplace. Get out there early and strong before your competitors do.

One Buyer, Many Channels: Consistency Counts

Monica Luechtefeld, executive VP of Office Depot, earlier this month told Shop.org Summit attendees, “Multichannel has moved from a strategic differentiator to a strategic necessity.” Office Depot takes this concept one step further by aligning its organization to eliminate channel conflict.

All its channels operate as an integrated whole, eliminating competition to own the customer from within the organization. Sales reps are compensated when their customers use other channels — which they do. Of customers who perform most of their transactions in stores, almost 5 percent still use the phone and 14 percent go online. Among online customers, almost 28 percent use the phone and nearly 84 percent visit the store.

A critical component to successfully implementing a multichannel strategy is satisfying the customer, regardless of channel, by offering value and consistency. Smart consumers are demanding. Pricing, specials, and inventory must be coordinated to create an exceptional user experience that’s consistent above everything else.

Understand Roles and Responsibilities

The notion that email and direct mail are response channels only is under increasingly heavy fire. Understanding a channel’s role across the overall buying process is a marketer’s responsibility. It’s essential for allocating the necessary resources and attention to assure the overall success of an integrated marketing strategy.

In the Shop.org/BizRate survey, more than half of respondents indicate they plan to use the Internet more than last holiday season to comparison shop (89 percent); research gifts for others (86 percent); buy gifts for others (74 percent); and buy gifts for themselves (53 percent).

The Web and email are tools to carry and extend a message throughout the buying process. To optimize that opportunity, marketers must leverage data and intelligence they have on customers to help close a sale.

Spam, the Relevance Reality

Increasingly, spam is less about permission and more about a message’s relevance and overall value. Consumers will end plain-vanilla relationships as top merchants set the bar higher on timely, relevant marketing this holiday season. Focus on keeping profitability at optimal levels. Smart marketers will shy away from blanket discounts and free-shipping offers. Instead, they’ll leverage knowledge and data they have about customers to build more relevant, timely communications that elicit response.

Think Long Term

Marketers will continue to invest in driving sales this holiday season. Yet how many will build strategic programs designed to capture and retain those customers after the all-important Q4 push? True, search will play an increasing role in driving comparison shoppers to purchase. But how many retailers focus on retaining new customers brought in by search by using a relevant, integrated email retention strategy? Too few, in my experience as an online shopper.

Marketers must think beyond tactics to reach overall sales results and instead create long-term, emotional customer relationships. Try something innovative or outrageous that directly ties into or supports your core differentiators: loyalty promotions, out-of-the-box customer appreciation offers, gifts, and so on. What’s your tootsie roll this year? Make it easy, and obtain that email address by offering value.

Phishing Goes Retail

One last thought for the upcoming holiday season: Be prepared. This season will see a marked increase in retail-sector phishing (define) attacks. Given this, preparation and a good offense are the best defense.

Although phishing attacks continue to be largely focused on the financial sector, retailers aren’t immune. Prepare and educate to protect your brands and the success of your online and email efforts this holiday season.

Support authentication standards. Push for their adoption and implementation now. Encourage users to add your email address to their address books. Build online education centers that help consumers identify your email from fraudulent email. Facilitate communication with customers by creating a mechanism for them to report such fraudulent email attempts. Above all, communicate internally with your call centers and sales reps to inform, prepare, and assist customers who may have inquires.

Long-term success means customer satisfaction and loyalty. To delight customers in these competitive and complex times requires focus, preparation, knowledge, dedication, relevance, passion, and good timing.

Till next time,

Al D.

Want more email marketing information? ClickZ E-Mail Reference is an archive of all our email columns, organized by topic.

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