Getting Ready for the Holidays
WebTrends conducted a survey of online retailers and presents their findings in the “2006 Online Retail Holiday Readiness Report.” The biggest surprise is the fact that 23% of retailers say they will offer no special promotions this holiday season. WebTrends defined the holiday season as lasting from Oct. 1 to Dec. 31, 1/4 of the year. Yet only 41% of retailers said the holiday season accounts for more than 20% of their annual revenue. My only thought is that the other 59% isn’t running their online businesses properly. How does the best 25% of the year for retailers not account for at least 20% of your revenue? Unless they’re selling bathing suits or lemonade these retailers aren’t living up to their potential.
Last year only 11% of retailers decided to forgo special promotions, a much saner number. The most popular promotion retailers are going to run is free shipping, which 45% of surveyed retailers are offering, followed closely by a free-gift with purchase, something 40% of retailers will offer.
The most popular feature retailers plan on using to generate revenue is recommended items, followed by a gift idea center and a standalone page for sale items. The only features that retailers are planning on using more this year than last are live chat (up 10% from 8%) and personalized promotions(20% from 17%). A whopping 18% of retailers don’t plan on using any features to help generate sales, up from 6% in 2005.
There is only about a month left before Thanksgiving when we’ll start getting a picture of how the 2006 holiday shopping season is shaping up. What are you doing to get prepared? Are you running promotions or using new features to generate sales? Let us know in the comments.
Posted by Chris | October 16, 2006
Maggie October 17th, 2006
I am an online shopper and that is a great disappointment to
see no special offers from 23% of the retailers. Are they
being honest when they say the holiday season only gives
them little profit because of the price cuts and deals?
I bought an apple ipod 80GB with video from Personal Amazon
Store http://astore.amazon.com/goodcolleges-20 for my
son’s birthday.My mind was saying wait for the holiday season
when prices come down but now after reading your article;I
am glad I bought it!
James V. Reagan October 17th, 2006
I think the survey shows that the holiday season is focused on a minority of product categories (probably electronics, jewelry, books/media). Many other categories have lift during other parts of the year, namely spring. I don’t have the data, but would not surprise me if, say, apparel saw a bigger boost in the spring than they do in Q4, same with sporting goods.
I actually noticed this trend last year watching a number small business retailers launch web sites during the holiday season, and a number of them did not treat the holiday season as their bread-and-butter. At the same time there were other small business retailers that saw a huge uplift that outpaced the market… those were small businesses that sold unique, gift-worthy items.
I don’t think it’s a matter of potential, I think those retailers know their seasonality and when it applies.
Either that, or the survey asked the wrong question… perhaps a “how does your e-commerce sales trend with your overall sales?” would be a better question.
Chris October 17th, 2006
James, you make some solid points about the nature of retail, but I would still expect the holiday season to be a larger revenue producer for ecommerce companies. Electronics, jewelry and books/media are the lifeblood of the ecommerce industry and I would expect these sites to make a large chunk of their money during the 4th Quarter.
There are certainly sites that would experience a drop-off during the holiday season, I think you are right in saying that sporting goods would enjoy a stronger market at the beginning of fall and again at the beginning of spring, but I feel these companies should still be running promotions to get what they can out of the holiday season. Putting up a new page with sale and gift items will more than pay for itself and doesn’t take long to implement.
First Holiday Shopping Forecast » eCommerce Cache :: Varien eCommerce Blog :: A blog focused on the design, marketing, and implementation of online commerce October 19th, 2006
[…] We know what retailers are doing to prepare for the holiday season, but what are customers thinking about the coming retail boom? eMarketer has culled some numbers from a NPD Group survey and has released a consumer holiday shopping forecast. It’s not all sunshine, but it does include some important numbers. […]
If You Offer Free Shipping They Will Come » eCommerce Cache :: Varien eCommerce Blog :: A blog focused on the design, marketing, and implementation of online commerce November 17th, 2006
[…] I’m a big fan of number 2, usability. Varien knows that tricky navigation will turn away customers faster than…well, it’ll make them leave your site pretty fast. There’s at least 23% of retailers that should take a look at this survey. […]