Cross-Channel Retailers Realize “Need For Speed” As They Get A Jump On Holiday Promos

The holiday season is shaping up to be a game of high-stakes poker played at high-speed. According to experts observing the situation, the key players may call “all in” at any time with an aggressive slate of discounts, promotions, and cross-channel incentives.

“The big change this year is that retailers are moving their holiday campaigns forward in an attempt to close some sales early,” says Chad White Director of Retail Insights and Editor-at-Large for the Email Experience Council. “As of Oct. 19, 40% of the retailers I track had referenced the holidays in at least one email. Last year only 31% of retailers had referenced the holidays by that point. Last year we didn’t reach the 40% mark until Oct. 25, so retailers have moved their holiday campaigns forward by roughly a week. Based on this, I expect Cyber Monday to be huge again this year as retailers give customers another compelling reason to pull the trigger and not wait until the days right before Christmas. I also expect more Black Friday messaging this year.”

Some retailers have tried to take the high road as the season approaches, but most analysts expect speed and even desperation to rule the rest of the year. Circuit City, for example, has drawn some positive press for its “One Price” policy that guarantees the same price regardless of the channel it’s purchased through. Best Buy has pushed its ramped up mobile offerings. OfficeMax (see related story) has taken up cause marketing. But expect these all to be footnotes on Dec. 26.

“It is the nature of the economy to turn all consumers toward value,” says Lauren Freeman president of the e-tailing Group. “Expect them to look for deals across all channels. They will look for early season deals, and then look for late season deals. In the middle I expect to see a lot of limited time type of promotions and accelerating discounts.”


Last year, the main cross-channel issue was free shipping. This year most retailers would kill for that kind of simplicity. Consumers expected retailers to ante up free shipping for most any order regardless of value. This year, free shipping has not been promoted as heavily by e-commerce pure plays or cross-channel retailers. But it’s a tactic that can and will be broken out at any time.

Larry Freed, president of ForeSee Results, was one of the analysts that accurately called out free shipping as a competitive key last year. This year he calls it “a cost of entry” for e-commerce. “I expect it to be very important again,” he says. “Actually it has become more of an accounting issue than a business issue. It’s really part of the cost of goods online, and we all know the margins are much better for online sales. I think when gas prices were higher the potential hit for free shipping for retailers was bigger. Gas has come down substantially, so I say that if you can get customer to pay for shipping, all the better. But if you can’t, there are a lot of ways to accomplish it.”

Freed agrees that free shipping is among the aggressive tactics that will simply depend on who blinks first. After Halloween, he says, the game is on. Even the total number of e-commerce revenue is up for debate. Several reports issued over the past week call that number into question. Both Forrester and the e-Tailing Group expect 2008 to settle for a 12% increase over 2007. “Although US consumers are pessimistic about the health of the economy, they expressed a marked interest in the ability of the Web to save them money,” states the Forrester report. 48% of consumers surveyed, compared with 41 % in 2007, said that they can find the best values and deals online. Additionally, 36% of consumers said that they would be more likely to shop online due to high gas prices, compared with 22% who expressed the same sentiment last year. Forrester expects that the majority of holiday online sales will be driven by shoppers who have previously purchased online, rather than first time online buyers.

Freed says he expects a drive in online advertising and promotions to drive more web traffic and consequentially more purchases than is currently predicted. Brand Keys last week issued a report that warned of a possible five percent decrease in overall retail revenue, including online, based on the changing needs and expectations of key consumer groups.

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