By John Squire, President, eCommera North America
Even the closest families — when faced with undercooked turkey catastrophes and too-close quarters — can start to feel the tension when the holiday season arrives. In the same way, even well-running retail organizations will notice where their organization and their data is out of sync during the pressure cooker that is the holiday season. Unfortunately for retailers, these disconnects manifest not just in tension between departments, but in lost profits and dissatisfied customers.
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Although it is true that the holiday season is well underway, with products purchased and marketing plans having already commenced, there are some key questions that retailers should still be asking themselves to create a happy holiday season for customers and for stakeholders:
- Can I truly afford that promotion or free shipping? Almost half of shoppers surveyed by Google late last year said that if a site didn’t offer free shipping, they would find the item on a different site that did. However, as retailers chase the Amazons of the world to offer these customers what they’ve come to expect, many are losing margin that they are not recouping in other areas.
There are a few ways to find creative solutions to this issue. By taking a look at your order and CRM data cohesively, you can determine your most high value customers and frequent purchasers. Offer them free shipping or expedited shipping on specific days, when you are not otherwise discounting merchandise.
Retailers like Restoration Hardware and Frontgate as well as multiple beauty brands have found value in “give-to-get” promotions. When they are not offering free shipping, they may offer customers a gift card or credit to spend at a later date for buying a gift now of a certain dollar value.
Consider sending targeted campaigns — whether they focus on free shipping, expedited shipping, sales or other promotions — by customer segments based on recency, frequency, past order value, level of site engagement and order margins. This customer segment understanding will help guide whether you can afford to get bolder with a promotion, given typical order margins. It will also help trigger a more aggressive approach if the customer group is beyond expected repurchase point or has been disengaged from your site.
- Are my products and promotions in sync? A high-end retailer we work with discovered nearly $300,000 in lost opportunity from paid search keywords sending customers to items that were out of stock. Another found over $500,000 of inventory on the warehouse shelves that had no exposure on the website. And mind you, these are industry-leading organizations. But, when they viewed their web analytics, paid search and inventory data together, they began to see products, promotions and processes that were badly disconnected.
During the holiday season, it is vital to ask specific versions of this synchronicity question like:
– Am I promoting products with low availability or fragmented sizes, colors or choices?
– If yes, do I have the ability to quickly order more or bring more from my stores on to the site?
– Am I using automated email or retargeting campaigns to drive customers to out-of-stock or low-stock items?
With a specific understanding of inventory levels, you can determine which items are selling well, and then get creative with your marketing efforts to drive sales for the less popular merchandise you have already purchased. If black and tan are your best sellers and likely to move without promotion, plan an email campaign focusing on your green and blue options. When customers are buying for others is also the perfect opportunity to use your up-sell and cross-sell site features to focus on less popular items that would compliment items being viewed or in the cart. Just make sure your recommendation engine shows products that are in stock.
- Am I living up to my promises? When a customer purchases a gift, you are offering them the promise of on-time delivery and product accuracy and quality. They don’t just want, but truly need, their package to arrive on time, giftwrapped if they’ve paid for the service, and in pristine condition in order to give it to a loved one.
A luxury retailer that I work with, for example, found that $75,000 worth of orders for VIP customers was sitting in “held order” status. This meant that their most frequent purchasers were not going to receive their packages on the promised delivery date.
By watching your analytics, order data, inventory data, returns data and even site comments with an obsessive eye during the holidays, you can quickly pinpoint and solve for issues like:
– Higher abandonment rates on specific product pages — This could indicate a number of issues, ranging from an email promotion or search campaign leading to the wrong product, to the fact that your most popular boots are now only available in women’s size 11.
– A specific product being returned or requested to be returned above average. Take a look at return codes or site feedback to determine if the issue is fit, color, damaged packaging or a number of other issues.
– Look for return trends that indicate issues in delivery early in the holiday season so that packages are arriving on time and in perfect condition when it counts the most.
Just like families need to ask some questions to have a successful holiday — like, “Can I bring my Rottweiler with me to your house for a week?” or “Do you actually like the cranberry sauce that still looks like a can?” — retailers who stop now to ask a few tough questions will find themselves with less anxiety, more profits and happier customers in the weeks ahead.
John Squire is the President of eCommera North America. He empowers forward-thinking retailers like Brooks Brothers, REVOLVE Clothing, Sur la Table, T.M. Lewin and Calendars.com to find untapped profit across their eCommerce business by utilizing eCommera’s DynamicAction, a first-of-its-kind application that analyzes product and customer data relationships to pinpoint what’s impacting profit and recommend the actions to take to drive the most value for the business. Prior to eCommera, John spent 11 years driving Coremetrics’ growth to become the industry’s leading digital and marketing analytics tool. He then served as the Chief Strategy Officer of IBM Smarter Commerce. John is a recognized expert on retail industry trends, and has offered his insights to audiences at preeminent industry events including Shop.org and Fashion Digital and is a regular contributor to CNN, Fox News, the Wall Street Journal, The Washington Post, Huffington Post, CNBC and Forbes.
