11 Oct 2017 Holiday Season: 4 Data-Backed Tips for Retail Marketers
In 2016, Cyber Monday was the biggest day in US e-commerce history. Consumers spent $3.45 billion.
Black Friday was close behind at $3.34 billion with a year-over-year growth rate of 21.6%. Black Friday was the first day ever to generate over a billion dollars in sales from mobile devices: $1.2 billion to be exact.
But for many, the holiday season could have been bigger.
As you know, every year some marketers get caught off guard and are disappointed with their e-commerce results. Brands are also hurt by the fact that the holidays account for around 30% of annual sales.
Often shortfalls happen because digital marketers aren’t caught up with trends in the data. They lack the quality information they need to prioritize their e-commerce efforts.
Warren Buffet famously said, “You only have to do a very few things right so long as you don’t do too many things wrong.”
This applies to online marketing during the holiday’s as well. Right now we’re going to lay out 4 tips for how you can avoid disappointment this holiday season and set your brand up for a big win.
1. USERS ABANDONING HOLIDAY SHOPPING CART
Not figuring out cart abandon is one of the worst offenses marketers make before Black Friday.
Managing this one issue can result in some of the most dramatic increases in revenue for your brand.
Why Do Customers Abandon Their Cart?
- Customers get distracted and forget to purchase
- 44% of consumers abandon their shopping cart if shipping is perceived to be too expensive (Shipgooder)
- 78% of carts last holiday season were abandoned by those browsing on their mobile phone (Smart Insights)
But What Can You Do About It?
- Implement Cart Abandonment Emails For Your Holiday Shoppers
Cart abandonment emails account for an average of 18% of total email revenue for brands. They are one of the highest converting types of emails brands can send to users. If you’re only blasting out a newsletter once a week or promotional emails to your entire list, this is an email stage you’re going to see a huge lift in revenue with, right away.
- Simplify the customer checkout process on mobile
37% of mobile users research on mobile but plan on purchasing an item later on their desktop because it’s an easier experience (Appsee). Unfortunately, a large percentage of users never return. Hopefully as a retailer online in the modern age, you fully optimize your website for mobile viewing. But take time to examine your checkout process from the perspective of the mobile customer. Where can you simplify the checkout process or make it easier? Can you take the process from 7 steps to 2? Making these changes will result in more mobile conversions and a bump in revenue. This is especially true earlier in the season when people are researching on their phones.
- Offer Free Shipping For The Holidays
Free shipping is so important that 58% of shoppers are willing to add more items to their cart to qualify for free delivery. In addition, 83% of shoppers are willing to wait longer for the items to arrive at their homes if the shipping is free (Comscore). Closer to the end of the year, you might even offer expedited shipping. Customers buying those last minute gifts will appreciate it. To stay competitive in 2017, online retailers will need to seek ways to absorb the shipping costs (including delivery and returns) in order to motivate shoppers to place orders from their digital stores this holiday season.
2. CAPITALIZE ON HOLIDAY SEASON WISH LISTS
Wish lists are great because they remind you to buy items for yourself and others later. But when exactly is “later?” The answer is often “the holidays”.
Nearly two-thirds of holiday shoppers said they would like to use retailer wish lists to help organize their gift purchases according to NRF’s survey.
25% of respondents said they used online wish lists from retailers to help them in the shopping process; 63% said they would like to use more wish lists in the future, whether it be a curated list of items or a special feature to save and share their own list of desired gifts.
How Can You Take Advantage Of This Information For The Holidays?
- Implement Wish Lists On Your Website.
Besides enabling a better user experience, adding wishlist functionality to your store gives you a great reason to ask for a user’s email. When you send customers their holiday wish list for example, it’s an extremely relevant first touch in their inbox and opens the door to more communications. Speaking of which…
- Holiday Wish List Item Alert Emails
Once you have a wish list built into your online store, the next step is to use email to send relevant item alerts for the items the user has selected. These alerts can be emails to inform the customer of a price drop for one of their items or to let them know an item that was sold out is back in stock. Taking it one step further, you can include additional product recommendations based on items in the customer’s wish list. We’ll address this further below.
- Remember The Importance Of Self-Gifting
Don’t forget that items in a wish list are often guilty pleasures for the purchaser. When sales are starting, customers see this as a time to restock their closets or treat themselves while they’re out finding gifts for friends. More than 70% of respondents to an NRF survey said they had bought gifts for themselves during the holiday season. Among them, an average of 20% of their holiday purchases were just for themselves.Hispanic (81%) and Gen Z (93%) shoppers were the most likely to treat themselves. People often feel guilty buying for themselves, so you want to speak directly to self-gifters to remove this feeling and encourage them to indulge.One common self-gifting strategy is to offer bonuses with gift cards and holiday purchases. Offer customers two percent-off coupons: one to purchase more gifts and another to treat themselves- that way customers don’t feel guilty buying for themselves too.
3. FIND THE RIGHT HOLIDAY ITEMS FOR SHOPPERS
Many retailers such as REI and Macy’s create holiday guides on their websites to help users explore product categories while recommending top selling items. This is a good initial step to creating value for shoppers with product recommendations…
More than half of online holiday shoppers said they purchased an item that was recommended directly from a retailer, with men (58%) more likely than women (51%) to do so.
Personalize Holiday Recommendations
But just recommending top holiday items isn’t enough anymore. Many retailers now serve 1:1 recommendations to customers via Artificial Intelligence, and this is particularly important around the holidays.
Bain & Company Says Retailers Must Harness AI
A recent report by Bain & Company highlighted the importance of artificial intelligence in 2017:
“These programs and machines don’t rely on programmers to refine algorithms. Instead, by recognizing patterns in massive data sets, they create their own decision rules. AI is no longer a Silicon Valley pipe dream; it’s a real and actionable asset for retailers, helping improve both the customer’s experience and the retailer’s operations… AI is also boosting the performance of tools and technologies that have historically been awkward and frustrating… Clearly it’s time to explore AI.”
Easy Artificial Intelligence Platform for Email and Acquisition Channels
This holiday season, companies like Dollar Shave Club, Draper James, Hollar and OluKai are leveraging ReSci’s Artificial Intelligence Platform to serve intelligent 1:1 production recommendations through both retention and acquisition channels. ReSci does this by understanding each customer’s browsing behavior, purchase behavior, demographics, email interaction and overall site-wide trends.
4. OFFER THE RIGHT HOLIDAY INCENTIVE
When incentivizing customers to purchase over the holidays, many marketers wonder what offers work best to get holiday shoppers to purchase earlier and more frequently.
Holiday Incentives That Convert
NRF survey data found that 9 in 10 shoppers said something convinced them to make a purchase that they may have been hesitant about (either in-store or online).
Of those who said they were swayed, 64% said it was by an offer of free shipping and 50% said it was due to a limited-time sale or promotion; 33% said it was the ability to buy online and pickup in store.
Planning for the season, how can your team get creative? How can you drive urgency and action? How can you remove purchase barriers and make buying as easy as possible for holiday shoppers? Here are a couple of examples from Parachute and Rachel Zoe below.
In addition, ReSci found that online shoppers are twice as likely to respond to free shipping offers versus static price discounts.
But among discounts, what percent-off discount do gift shoppers respond to best?
Not surprisingly, it varies from person to person. But how do you target the right incentive to thousands, possibility millions of customers, at scale, every day?
Different Person, Different Discount
But what if you could give each customer only the discount they need to convert while holiday shopping, and not a dollar more?
It makes sense; someone whose behavior and demographics indicate they are ready to buy might not even need a discount. On the other hand, someone who is an opportunistic Christmas shopper might be swayed to purchase when you give them 20% off.
With competition being so fierce this holiday season, protecting your margins is vital. This is where 1:1 discounts make sense.
ReSci has developed a price sensitivity model for it’s AI platform. This platform uses dynamic tags in emails to automatically include a personalized incentive for each user. The best part? The AI learns and gets more accurate as it begins to understand your customer’s patterns. This “right-sizing” incentive strategy will go far to pad your revenues this season.
2017 Holiday Trends
eMarketer projects that overall retail ecommerce sales will climb 16.0% in 2017, down slightly from the 16.2% growth last year. Still, the increase will be enough to expand e-commerce’s share of total retail sales to 9.2%. That is up from 8.2% in 2016.
To make the most of this holiday season, remember to prioritize the 4 areas we discussed:
1. Manage cart abandonment with email
2. Leverage wish lists and wishlist item alerts
3. Recommend items beyond just using your top 10 list
4. Incentivize strategically at a 1:1 level and protect your margins
Want to be certain you aren’t left with coal in your stocking this season?
Click Here To Schedule A Demo and see why other retailers are giving themselves the gift of ReSci’s Artificial Intelligence marketing platform this season.