2008 Holiday Shopping Season Challenges & Strategies
October 18th, 2008I was just reading the newly published 2008 Holiday Survey provided by the National Retail Federation, and found some interesting facts about what people plan to do this year. With the economy and political scene in turmoil, retailers both online and off-line are anxious about to expect during the biggest money-making part of the retail year.
There’s both good news and not-so-good news for retailers. Part of the good news is that there really isn’t any BAD news - shoppers are only expecting to spend a bit more than they did last year, about 2.2% more. Hey, at least they’re still planning on spending, and adding a bit over the prior year! The average US consumer is planning on spending about $836 each on holiday spending, which is up just under 2% from last year. This is better than many business owners expected, as the possibility of decreases in holiday spending were very real. And the actual numbers will tell the real story, after the holidays are over…
The survey deals with shopping across the board and is not specific to internet retailing. But the report has some very interesting observations of the data. There were two paragraphs that caught my attention.
Though shoppers choose to visit stores for different reasons, consumers say one factor will play the biggest role in buying decisions this year: price. According to the survey, 40.0 percent of shoppers say that sales or promotions is the largest factor when determining where to shop, while another 12.6 percent state that everyday low prices are most important. Other consumers rated selection (21.5%) and merchandise quality (13.4%) as the primary factor. Only a handful of consumers said they are making buying decisions based on a convenient location (5.6%) or helpful customer service (5.2%) this year.
And this paragraph (emphasis mine):
As the Internet becomes more of a mainstay in the retail landscape, Americans are heading online to compare prices, research retail locations, and look for gift ideas before heading to stores. Although the number of people buying gifts online is expected to remain flat over last year (44.2% in 2008 vs. 44.3% in 2007), shoppers will rely on the Internet more than ever to browse for holiday gifts and research products. According to the survey, the Internet will influence 33.6 percent of holiday purchases, up from 30.2 percent last year and 28.9 percent in 2006.
What does this mean for those of us who are trying to make a living on line? There are a couple of things that leap out at me.
The first is that shoppers are using the internet more and more each year, and the conversion from researcher to buyer is expected to increase. We tend to forget that there are still the majority of shoppers out there to do NOT shop on the internet, for a whole variety of reasons. But they are comfortable in conducting research online, and using tools provided by e-tailers on their websites to find out more information - even if it’s just to find the location of the nearest brick and mortar store. With familiarity and use comes comfort and trust, and those are key elements in triggering a buying decision.
The second thing that caught my attention was the thought that websites that don’t offer what shoppers are looking for - and right now what they want mostly is ideas, product and pricing research (aka CONTENT) - are going to be stuck in the start gate. We’ve all been hearing this for some time now from the internet gurus, and if you’ve been paying attention at all you’ve noticed a lot of activity of the downgrade variety taking place at Google and the other search engines. The reason is lack of content, the stuff that makes it worthwhile for people to visit your site. If you ain’t got it, you’re not going to be getting your slice of the pie.
Although the current economy certainly makes people more price-conscious, I don’t believe that this is a short-term trend. I do believe that as people have more choices available about where and how to shop, price comparisons will be made across a wider and wider network. With that can come information overload, to be sure, and people will retreat to where they are most comfortable when this happens.
This year consumers have made it clear that bargain prices are more important than store location, or even quality of product. They are going to look on the internet to find gift ideas, and the price points for the items they’re interested in. They are willing to come to your e-store to find this information, and that gets them much of the way there on the road to making a purchase. Remember, they’ve indicated that they’re flexible on where they buy their items! This is a golden opportunity for online businesses to capture the interest and hopefully the dollars of these shoppers. But if you have no research, no product information, no way to spark their interest and get them loaded up with shopping ideas, you will not capture these customers. He or she who is without content shall perish (figuratively speaking!).
Take a hard look at your website. Make a list, even mentally, of all the features you offer visitors. If the only thing you come up with is your inventory, you’ve got some work to do. Provide those seekers and shoppers with information on what you’re selling. If it’s a niche site in an area of particular interest to you, then you should start writing about your area. Beef up that content and make it easy for shoppers to learn about your product line, and help them make decisions. If you can’t write, then hire it out. It’s important enough to your future business that you will have to invest time and/or money to make your site worth visiting.
Take a hard look at your product line and pricing strategy. It’s awfully hard to compete with Wal-Mart and Target and Costco on prices for many things. Especially when their buyers don’t have to pay shipping. If prices are what people are focusing on, then make sure you are competitive and that you educate your buyers on why they’re getting a good deal from you! Buyers appreciate value more than most other things, and they need to believe you offer it to them. You need to tell them! Get to work on running sales and promotions to entice buyers. Better hurry though - about 40% of shoppers say they plan to start Christmas shopping before Halloween!
With every challenge comes opportunity. The current environment is ripe for those who are willing to push forward with the next iteration of The Internet. By itself, it no longer has the high gee-whiz factor that it used to. In fact, many if not most shoppers and purchase-influencers today have either had the internet their entire lives or for most of their “shopping lives.” It’s no big deal. Tailor your messages to these buyers, give them what they want, and you will be rewarded.
