With the strong e-tail sales of the 2006 holiday season behind us, what can online merchants do to drive revenues during the traditionally slow post-holiday period? Gone are the many shoppers lured in by free shipping offers and easy purchases of last-minute gift cards.
It’s time for marketers to get creative.
Seven Ideas to Ignite Online Sales
Here are seven suggestions to help jumpstart your sales engine:
- Segment your house file. Tailor appropriate offers based on past purchasing history. Break out customers who bought for personal use from those who bought gifts. “Bill to/ship to” orders can help this process. Segregate gift card recipients for special attention.
- Reengage with purchasers and gift recipients. Communicate with purchasers and recipients as soon as possible to build relationships. A single purchase doesn’t ensure customer loyalty. Since you own your customers’ contact information, these communications are cost-effective. Enhance the offering with content related to the product purchased/received. Offer gift givers a “Give Yourself a Gift” promotion.
- Test post-holiday sale timing. Consider the impact of sales promotions on post-holiday returns and gift-card sales margins. Selectively reduce merchandise prices after the holiday to extend holiday profits.
- Provide a sneak preview of next season’s hottest products. Entice buyers and recipients with tantalizing, new, full-price product. This applies to all product types, not just clothing.
- Create hot promotions for cold weather. Give customers a compelling reason to shop or visit your Web site, such as a contest where the prize relates to the promotion.
- Tap into cross-sell opportunities on your site and in packaging and post-purchase e-mail. Use database analysis or merchandising insight to determine coordinated products. Offers related to past purchases include additional units of the same product, additional related product (e.g., pants for tops), training (e.g., for cooking, computers, or DIY projects), and sister-company offerings.
- Supplement online marketing with direct mail, particularly if you don’t have gift recipients’ e-mail addresses. Most likely this target segment asked for your product and would be interested in receiving future communications. Entice recipients to share their e-mail addresses. If necessary, add a special offer. If you cringe at the thought of spending money on direct mail, remember that you have a targeted customer. The biggest expense in direct marketing is obtaining likely purchasers’ contact information, which you already have. Outsource the mailing if it’s not an in-house area of expertise. Three ways to capitalize on these addresses:
- Include offers for related products in the shipping package. Make them stand out.
- Send a print catalog, if it fits with your business model.
- Use a postcard or letter to entice users to register and purchase on your Web site.
To keep sales on track, make these promotions part of a marketing calendar, giving customers a reason to regularly visit your online store. More mature businesses often integrate a marketing calendar into the budgeting process. I’ve been working to help clients develop systematic promotional plans built around ongoing marketing calendars.
Measure Sales Success
To assess the outcome of winter marketing initiatives, track the following indicators:
- House file size. Monitor the size and quality of your house file in terms of e-mail and postal addresses. Customers can still be contacted via their postal addresses even after they unsubscribe from your e-mail list. Track the size, number, and frequency of purchases for each customer in your house file. A house file is a corporate asset.
- Response rate. Track the percentage of contacted customers who visit or purchase from each initiative. Also, assess the attrition rate: the number of customers retained and lost after each promotion.
- Revenues. As with any initiative, track both associated gross and net sales. Since these promotions are targeted at existing customers, look at revenues in aggregate as well as by customer contacted.
- Margins. Since many retailers experience high returns and reduce prices during this period, monitor costs and assess margins to ensure these promotions are profitable. Unlike brick-and-mortar retailers that often close their books at the end of January to compensate for holiday returns, many online retailer follow a calendar that can make the beginning of the year look relatively weak.
- Inventory. Monitor inventory levels and make sure you’re hitting weekly targets. If you aren’t getting targeted post-holiday inventory reductions, adjust pricing and promotional activity appropriately.
Though the dead of winter really is the slow season for many e-tailers, the tendency can be counteracted. Use this period to actively strengthen relationships with new customers acquired over the holidays, blow out leftover and excess inventory, and create excitement for the next season. There are always opportunities for marketers who implement creative promotional efforts.