If you aren't increasing the sophistication of your marketing and promotional efforts this holiday season, you aren't keeping up with the competition, according to industry experts. And, more importantly, you may not be keeping up with online shoppers.
Because you make your living in the e-commerce industry, we don't have to tell you how fertile the ground is for attracting new customers and upselling to existing customers. According to Forrester Research, online sales for 2006 will top $131 billion in the United States — a figure that will more than double by 2011, the research firm's U.S. eCommerce Five-Year Forecast And Data Overview reports.
While those numbers are significant, Forrester points out that online retail still accounts for only about 6 percent of total retail sales. To put that in perspective, the research group notes, that the entire online retail industry is smaller than the annual revenues of Wal-Mart. However, several verticals are ripe for growth over the next five years, including computer hardware and software, toys and video games, baby products, and autos and auto parts.
What You Gonna Do About It?
The potential for online retail is huge and buyers are ready to buy. In fact, Forrester says that online shoppers are so comfortable with technology now that consumers in North America spend more time with their PCs than they do watching TV, listening to the radio and reading magazines combined.
Given all these factors, it's no time to stick to the status quo as we inch closer to the holiday season.
The good news is that most of you aren't. That is, if consumers are more tech savvy, so are you, according to a survey of merchants conducted by storefront software provider, Prostores.
Julian Green, director of eBay's subsidiary, told ECommerce-Guide that business owners are increasingly tapping online resources and are becoming more sophisticated in using lead- and sales-generation techniques such as search engine optimization and e-mail marketing.
"Folks are more technology savvy and are taking better advantage of tools, particularly on the design side. When we offer tips, people eat them up," Green said. "It's us helping them help themselves."
Green added that small online retailers are seeing the value of marketing tools and understand the importance of search engine optimization. It's also important that businesses realize that organic search engine optimization is more art than science. "SEO takes personal time. Natural search requires you to stay focused on customer groups." Successful SEO, Green said, requires a lot of fine tuning.
In addition to fine-tuning your site for better organic SEO results, Green said, online retailers also need to focus on effective search engine marketing and develop metrics to track the results of SEM. "People are blindly buying keywords, with no idea if that's bringing in business."
Green also said that merchants should be offering their products at places other than their own sites. "Push products to eBay, Yahoo Shopping and Google Base," he said. "However, multichannel sales require you to keep inventory up to date," he warned.
Can You Deliver?
Lisa Schneegans, of software giant SAP, points out that while selling online lets small businesses expand their reach and levels the playing field between them are larger retailers, online merchants need to be sure that their sites are ready for the holiday onslaught.
"When you sell on the Web, you expose your weaknesses," she told ECommerce-Guide. "How are you going to ship? Do you have reliable carriers?"
If you haven't already, Schneegans suggests you make sure your site has a holiday feel and that you update your content more often because "visitors will be coming more frequently."
And while it sounds obvious, Schneegans recommends that you check for typos and bad links — anything that would have an effect on how you are perceived by potential shoppers.
Try to simulate the customer experience, she said, running transactions that reflect what a customer might experience. She added that it's important to simulate increased traffic and test to ensure that your servers (or your service provider's servers) can handle the load.
Research firm JupiterKagan reinforces the importance of performance. According to research it conducted for Akamai Technologies, 33 percent of dissatisfied online shoppers attributed their dissatisfaction to sites being too slow to load. And 28 percent attributed negative feelings to error messages they received. More than a third of those dissatisfied, abandoned the site.
As a general rule, JupiterKagan suggests that online retailers keep page rendering to no longer than four seconds.
Tis the Season ...
You don't have to be an economist to know that the holiday season can make or break a retailer. And a recent survey of 1,500 small businesses by Constant Contact, a provider of e-mail marketing services for small businesses, found that 78 percent of U.S. small business owners surveyed said the December holidays are important to their yearly earnings.
To better serve the expected high turnout of holiday shoppers, 68 percent of small businesses will run seasonal promotions (mostly online), and 20 percent have hired or will hire additional employees, according to the company's research.
The majority of small businesses (81 percent) expect consumers to make more holiday purchases online in 2006 than they did last year. To capitalize on this, most small businesses will use online marketing methods to promote their holiday offerings. Of the 68 percent that said they will run seasonal promotions, 82 percent will use e-mail marketing in their promotional mix, 50 percent will use online advertising, paid search or other online marketing tactics, and 35 percent will use direct mail.
In Closing ...
While price-conscious consumers may have dominated the online shopping scene for years, Forrester Research said a more lucrative value proposition for online retailers is making life easier for shoppers who are increasingly pressed for time. In fact, the company reports that more than 70 percent of people who shop online do so because it's easier than shopping other ways.
Keep that figure in mind when you evaluate your site navigation, checkout experience, shipping options and return policy.
Dan Muse is executive editor of internet.com's Small Business Channel, EarthWeb's Networking Channel and ServerWatch.
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