By: Mark Layton, Chief Executive Officer, PFSweb
The holiday shopping season is no longer relegated to in-store shopping on Black Friday; rather, it has snowballed into an entire weekend where consumers demand both mega-deals and convenience. Black Friday and Cyber Monday are the powerhouses in the retail world and can account for a significant percentage of a retailer or brand’s annual sales. In the last five years the percentage of holiday shopping that has taken place online versus in traditional brick-n-mortar retail has increased 10-fold. Further, this consumer preference paradigm shift has now given rise to another important shopping frenzy day - Green Monday - the Monday at least 10 days before Christmas. For some retailers, this is last day that standard ground shipping will assure that gifts will arrive by Christmas Eve. In 2012, Green Monday was the third heaviest shopping day of the holiday season with more than $1.2 billion in sales.
Because these few days are absolutely critical to an e-retailer’s financial success during the holiday shopping season, here are a few lessons we’ve learned that will help ensure that a retailer can both optimize sales and please their consumers throughout the season (and next).
1. Early planning and the use of a task force of experienced cross-functional team members are essential to a successful holiday season. While this point may seem to state the obvious, over and over again we see retailers and brands caught off guard from unexpected volumes of sales resulting from poorly coordinated promotional activities. Early planning and the use of a cross-functional team assigned the responsibility of ensuring that your organization is properly prepared for the holiday season is essential. Planning and preparation for logistics and traffic requirements, technology, coordinating promotional schedules, reviewing issues that arose the prior season and having the group charged with the responsibility to implement changes and enhancements to avoid similar issues again this year is essential in guaranteeing a successful experience.
2. Plan for a 100X volume spike? A common oversight is that the shopping behaviors of consumers over Cyber weekend combined with an aggressive and successful promotional campaign from the retailer or brand may result in site traffic and order volumes 50 times greater than any other day during the holiday season. Depending on the design of the promotional campaign, site traffic could very well end up concentrated into a very short time window (e.g. a flash event), resulting in the potential of a 100 times (or greater) load requirement on the technology footprint. Oftentimes we see planning determined based on averages for months, weeks or days, which can disguise the true peak requirements for resources during those critical time splits leaving a retailer hugely under-resourced at the most important success point(s) of the shopping season. The result can be a very poor consumer experience that tarnishes the retailers’ brand.
3. Consumers are increasingly expecting coordinated promotional activity across all channels. Nothing infuriates a consumer more than finding out the day after buying an item at a 25 percent discount that this same item is now on-sale at 75 percent off. It is critically important for retailers to coordinate their promotional campaigns to give consumers a “heads up” that a sale is coming and to ensure that the promotional discounts are consistent across channels. While it is acceptable to offer a “store only” or “online only” promotion, it’s not acceptable to offer 25 percent off through one channel and 75 percent off through another during a single period of time. Retailers who don’t coordinate these activities will experience a higher return volume and increased call center traffic from an audience of unhappy consumers who will find a way to get the best discount.
4. Recognize the growing importance of mobile and tablet interaction. The past year has seen a dramatic increase in the consumer use of smartphone and tablet devices to browse, compare prices and order products. This past Cyber weekend, our collective statistics showed that roughly 30 percent of all sessions and nearly 20 percent of all orders were conducted from a smartphone or tablet device. Sadly, many retailers and brands have yet to properly prioritize these user-interface platforms in a manner which allows consumers true ease of use and full-site functionality. Ultimately, consumers will embrace retailer and brand sites that make shopping on mobile devices easy.
5. Communicate promptly and candidly with consumers. Nothing is more frightening to a consumer than the unknown. Today’s world of identity theft, credit card fraud and mailbox and porch package theft has lead consumers uneasy about their e-commerce transactions, especially when communication about the transaction is delayed or unavailable. Consumers understand that delays due to high volumes or websites being temporarily unavailable are occasional inevitabilities, but the consumer expects prompt and candid information that they can rely upon to provide them the information necessary to protect their interests throughout the shopping transaction. Prompt order and shipment confirmation emails, accurate package tracking data, web site notification of potential delays due to weather or volume and clear and concise emails when issues do arise provide a consumer with the confidence that, while their order may not arrive exactly according to plan, the order is being handled correctly, and the revised delivery time frame is accurate.
As the 2012 holiday season comes to a close it is clear that online shopping will continue to be a key driver of total holiday revenue; retailers should stay focused on delivering consistent, high-quality experiences to their customers across all channels. Holiday commerce continues to evolve, as we’ve seen with the proliferation of mobile and tablet traffic, and retailers and eCommerce service providers need to be acutely aware of emerging trends in order to effectively service customers next year. Holiday planning for 2013 should begin now.