I don’t know about you, but I am nowhere near completing my holiday shopping. In my defense, I aim to finish up in Kansas City so as to not travel with too many gifts. Not surprisingly, my email inbox this month has been filling up with releases about holiday shopping statistics. I’ve been waiting (procrastinating?) until something really sparked my attention to do some sort of holiday shopping post. Apparently I’m not the only person who waits until the last minute to accomplish tasks. A survey from America’s Research Group (ARG) indicates that one fourth of American consumers are planning to complete their shopping just before Christmas. The reason for procrastination? The hunt for better sales.
According to the ARG survey, 95 percent of those waiting to shop are holding out for greater discounts. Of the shoppers waiting until right before the holiday, 33 percent want to see 70 percent marked off, 32 percent want to see 60 percent off, and 25 percent want to see 50 percent off. Britt Beemer, the founder and chief executive officer of ARG, remarks that the expectations for discounting is higher than in previous years.
Another interesting statistic I found comes from a comScore survey about social media’s influence on holiday shopping. According to the survey, 28 percent of online shoppers say that Twitter or Facebook had some sort of influence on their purchases. Additionally, comScore reports that holiday spending hit $16 billion for the first 36 days of the November-December shopping season. That represents a 3 percent gain from the dismal time last year.
Have you used social networking to aid in your holiday shopping this year? I admit that @sephora had a bit to do with an in-store purchase the other day. The retail handle posted something about “great gifts under $20,” so I checked out their online store, and then decided some in-person browsing was necessary. After heading to the 34th Street location on my lunch break, I ended up purchasing a make-up set for my cousin. And the greatest part? When I returned to my desk after my impromptu Sephora excursion, I had an email from them, thanking me for my purchase and giving me a $15 off coupon for next time. Sephora has a pretty impressive loyalty system. I definitely will be back — and that next purchase will likely be a gift… for me.
What facet of social networks do you find most useful when it comes to online shopping? Are you apt to follow a company or become a fan if the retailer offers discounts or promotions on its Facebook or Twitter page? Or are you mostly in it for the peer reviews?
THIS JUST IN: Sephora must have some crazy intuition because I just got another email from them, reminding me of my $15 off coupon. Well played, Sephora… Well played.
And here you were thinking you had to be dirt cheap to be successful in this economy.
Predictions that only Walmart would be this holiday’s only victor were soon shattered when we woke up on a brisk Friday morning, the day after Christmas, to reports that this holiday season was Amazon’s “best ever.” Ah, lucky number 14.
The company’s press release uses nary a hyperbole as it illustrated just how much stuff consumers purchased:
- Twilight Series’s “Breaking Dawn” books: “stacked end to end they would reach the summit of Mt. Everest eight times”; - GPS devices: “…combined weight of 151 Mini Coopers”; - High-performance headphones: “…everyone attending the last three Super Bowls could grab a set and rock out”;and, perhaps a favorite for many in our office – Coffee: “…enough to give each resident of the highly caffeinated city of Seattle a cup per day for two months.” (Metropolitan area population of 3,263,497, according to Wikipedia)
If you think about it, the news is not so surprising considering Amazon’s track record of consistently being the retailer of all retailers. In a conversation I had with Richard Owen, chief executive officer of Satmetrix, Amazon, and its neighbor Starbucks, have focused on the customer experience to drive their business — and especially since the economy depends on the (happy) customer, that’s not such a bad model to have.
He adds that Jeff Bezos, founder and CEO of Amazon.com has been “relentless” in his assertion that the company will grow because “[its] customers have good experiences and they will call [their] friends. You [rarely] see Amazon commercials on TV,” as they focus instead on word of mouth economics as a mechanism for growing their business. Though Amazon’s initial investments suffered criticism from financial analysts in the beginning, Owen says, suffice to say they made some smart choices.
Still, we can probably count on a few companies that will continue to have a slightly skewed version of what creating a good customer experience really means. Companies, perhaps, that think like Dwight Schrute,who may strike a few wins, but for how long?
Well, after the jump, we’re taking a quick look ’round the Web for early results of this year’s Black Friday, the day after Thanksgiving that’s traditionally seen as the start of the holiday-shopping season. The consensus seems to be that there isn’t any consensus: Having lowered expectations to such a degree, retailers are perhaps getting a bit of good ink for notching a measly 3 percent bump.
As the Thanksgiving holiday approaches, American consumers have a few main things on their minds: Turkey, Pie, and Deals, Deals, Deals. Black Friday is just three days away and Cyber Monday just a short skip after that. The question remains: Are retailers prepared for the onslaught of bargain-hungry shoppers? Perhaps a heavier question is on the minds of retailers: Will consumers deliver the Black Friday results they need to get out of the red?
Analysts are wagering that 2008 Black Friday deals and doorbusters will entice shoppers to stand in line at Best Buy at 5 a.m and will have them clicking the “Buy Now” buttons on e-commerce sites; however, it just won’t happen to the same degree as it has in the past. One retail expert affirms that this year, it won’t just be the early bird who catches the best bargains. In fact, retailers have been extending discounts and promotions for the past few weeks — and will continue to do so until the inventory is depleted. The reason being that retailers ordered inventory a few months back when the economy was in bad shape — but not this bad. Stores will be frantic to get the stock off their hands, hence, offering deals that extend past the Black Friday “Early Bird Special.”
Web analytics solution provider Coremetrics has had its eye on the retail ball for several years now. Each Thanksgiving season, the company aggregates data from its hundreds of online retailers to relay Black Friday and Cyber Monday forecasts and results. In 2007, the company’s benchmark data showed a 20 percent boost in e-commerce sales for Black Friday. John Squire, chief strategy office at Coremetrics, says not surprisingly, this year will be lower. The Coremetrics predictions and results will be released Sunday night. Look out for an extended write-up on destinationCRM.com early next week. Squires says that a number of factors are pointing to a glum Black Friday:
A shorter shopping season (Thanksgiving and Christmas are a week closer than last year) has put increased pressure on retailers to come out with promotions and to attract shoppers.
Coremetrics data of how much time consumers are spending online and what they are looking at suggests that browsing behavior is significantly lower than in previous years. At this point in time, online retail site traffic is only up by 10 percent. In previous years, that number was between 20 and 30 percent. Squires says it’s interesting to look at where Web surfers are spending time. He reveals that consumers are spending more time than ever on finance and banking sites.
Squires estimates that retailers have stocked up on items at lower price-points. Sure, this makes for happier customers, but will obviously affect a store’s performance.
Sleepy shoppers might be happy to note that the deals will be sticking around. Senior Editor Tod Marks sums it up best in his morning interview with CBS. Here’s an excerpt from a CBS Black Friday news story:
On The Early Show Tuesday, Marks observed that “you really don’t” have to be an early bird to get the discounts worm, “because the deals have been around since September. I’ve never seen this kind of discounting in 20 years of covering retail for Consumer Reports. The sales have been fast and furious. One day, it’s, ‘Buy one, get one free.’ The next day, it’s, ‘Take $20 to $50 off any order of $200.’ The next day, it’s, ‘25 percent off, flat.’ There’s free shipping. Everybody is offering today because the economy is in dire straits and they don’t want to be stuck with inventory the end of the year.”
Marks does note, however, that bargain prices lead to out-of-stock items. This is when it becomes important for retailers to provide consistent multi-channel offerings through stores, the Web, catalogues. Given the volatile nature of shoppers this year, retailers need to keep in mind that buyers are more than willing to take their bargain-hunting to the competition.
OK, that’s out of the way. To me, the best part about Halloween is that it marks the unofficial beginning of the holiday shopping season. At Macy’s in Herald Square, just a quick jaunt around the corner from CRM magazine’s office in Midtown Manhattan, you can already see Christmas lights being strewn up in preparation.
Not only are people getting a head start on hanging lights to spread holiday cheer, but they are also shopping earlier. With an economy that make many say “no, no, no” instead of “ho, ho, ho,” consumers are looking for the best prices as early as possible as their budgets for discretionary purchases continue to shrink.
With less than two months left until floors are littered with torn wrapping paper with images of sleighs, Charlie Brown, snowmen, and other images of holiday yore, many small businesses looking to cash in during this usually prime shopping season seem to be increasingly focused on shoring up the customer experience it provides to those poring through their shelves — or online catalogs. As my fellow CRMer Lauren McKay points out in an earlier blog post, the stakes are even higher this year for businesses because of the economic downturn.
A study conducted by RatePoint, a Needham, Mass.-based customer feedback solution provider for small-to-midsize businesses (SMB) finds companies are getting the message loud and clear:
more than 80 percent said business reputation and solid customer support impacts their ability to attract and retain consumers;
forty percent report they are hiring up to five new employees for customer support over the holidays to help manage inquiries, orders, and returns; and
most will spend an average of 10 hours monitoring their reputation to safeguard against any possible early warning signs of customer issues.
To Richard Turcott, chief marketing officer or RatePoint, this shows him many in the SMB segment are realizing the importance of forging quality customer relationships, as he says this is directly correlated with company reputation. He was particularly shocked by the second survey nugget, the fact that almost half of SMB owners say they’re hiring up to five new employees despite the economic environment.
While he admits the new hires may not all be full time, it is the principle that matters most. “The SMBs are sticking their necks out, providing exemplary support, and demonstrating they are customer-centric businesses,” he says. “These [new additions] are primarily part-time employees, but [nonetheless] provide a great view in which the small business community sees feedback and service as an important driver to helping them stay strong through this tough economic climate. These [organizations] are building equity rather than short-term hits.”
In a time when Web 2.0 technology is the soapbox du jour for many consumers sounding off about a company’s products or services, having a strategy to proactively cull and act upon customer feedback is even more important. “The prevalence of social media perpetuates the ease in which competitors and disgruntled employees can say negative things about a business,” Turcott says. “For small businesses, it’s more a necessity than a luxury to actively manage its online reputation. If they don’t know it now, they will very soon.”
For the SMBs — and also larger enterprises — out there gearing up for the holiday season, what strategies are you using to manage customer feedback and consequently improve the experience your shoppers have?
There’s no doubt that putting presents under the Christmas tree this year will pose a challenge for many Americans. On the flip side, it’s going to be an interesting year for retailers, too. Many retail businesses will struggle to make numbers as customers respond to higher costs, limit this season’s gift-giving, and look for the best possible bargains.
I am currently working on a piece for the December issue of CRM about holiday shopping in a recession. As I have been researching and conducting interviews, I realized some of this information would be of tremendous value now — before the wave of shopping hits. The Aberdeen Group recently released a study, “The Complete Mantra for Driving Holiday Business in 2008, 2009 and Beyond” [Follow the link for limited-time access to the report], which discusses key factors for driving successful holiday business. For the report, Aberdeen surveyed 100 retail enterprises to assess the retail industry’s preparation for the upcoming shopping season. I spoke with Ben Ream, Aberdeen analyst and author behind the report, who has a half-full mindset toward strategies for coping with a gloomy economy. Ream shared that when surveying retailers, two apparent concerns surfaced:
1. Worry over the increased cost of goods, and
2. Low consumer confidence.
Of the latter, Ream has proposed solutions. “There are many things that a retailer can do to engender sense of loyalty to compensate for a slightly higher price,” he says. Reaping the benefits of e-commerce and fully understanding the customer’s buying patterns and intentions are great ways to start, he says.
On the downside, a holiday sales forecast by TNS shows that this will be the worst shopping season since 1991– a glum, but anticipated prediction. So does this mean apples and oranges in stockings and “IOU” coupons wrapped up under the tree? Ream remains hopeful: “I think that consumes are savvy. I think that they enrich themselves through the Web with comparison shopping.” On the retail side, he says, “There are many things that a retailer can do to engender sense of loyalty to compensate for a slightly higher price.” (I will be saving the juicy details for the December print story.)
RSS Feeds
Feed
