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A Search Marketing Now WhitePaperBased on the September 29, 2011 webcastSponsored by iProspectSpeaker Nick Drabicky

Powerhouse Holiday Marketing Strategiesfor Online Retailers

© 2011 Third Door Media, Inc. http://searchmarketingnow.com • Email: [email protected] • (203) 664-13502

Powerhouse Holiday Marketing Strategies for Online Retailers

Executive Summary:For online retailers, the holiday season is well under way by the end of September. As consumer behavior shifts in relation to highest online sales days, lengthened consideration cycles and use of mobile and tablet formats in holiday shopping, it is more important than ever for retailers to learn from the past, embrace the present and innovate to create success in the future. Retailers who will drive the most success will be those that take a microscopic look at their own customer data from past holiday seasons and apply it to their ongoing campaigns. From the rise of “Green Monday” to the shift from desire-to-expectation of free holiday shipping, iProspect’s Nick Drabicky aids online retailers in driving the most revenue this holiday season and beyond.

(Note: This whitepaper is based on a webcast at Search Marketing Now, September 29, 2011, featuring Nick Drabicky of iProspect. Thanks to Sarah Engel for preparing this whitepaper. The full recording is available at http://searchmarketingnow.com in the “On-Demand Webcasts” section.)

The Holiday Season: Past, Present and FutureContents:Changes in the Online MarketplaceLeveraging Your Own DataHoliday Practices Put Into ActionTop Five “Must Haves” for the Holiday Season



Section 1: Changes in the Online MarketplaceTo gauge the impact of the holiday season on your business, it is important to first understand how large the opportunity is. How important will the holiday season be to marketers in 2011?

According to Nick Drabicky, Client Services Manager for iProspect, various research suggests that the current holiday season will produce more online sales than ever before:

• Online and offline sales projected to hit $1.02T this holiday season. Online will influence an estimated $492B of total sales.

• eCommerce spending hit a record high of $26.4B in 2010 and had six days with over $1B in online sales.• CyberMonday ranked as the heaviest online spending day of the year with more than $1B in spending in 2010.• 2011 holiday online sales are estimated to hit $60B.

For the past five years, holiday spending has increasingly shifted online, making the season that much more important for online marketers. October, November and December are crucial to annual success. As online retailers plan their holiday strategy and execute search, display and social campaigns, it is important to budget appropriately to capitalize on the largest shopping days.

Key Holiday Dates to Keep In MindBlack Friday – November 25Cyber Monday – November 28Green Monday – December 12Last Free Shipping Day – December 16

Drabicky notes that the actual Thanksgiving and Christmas holidays proved to be high traffic days for retailers in 2010. He said, “We definitely noted a big increase in traffic and orders on the holidays, basically as more people come online, are shopping more and are finding more avenues to shop.”

He also encourages marketers not to forget about January. He continued, “We can’t turn a blind eye to the post-holiday section. It is as important as the traditional holiday push.”

Shifts in Consumer BehaviorThere are some core shifts in consumer behavior that must be considered in 2011 and 2012:

• Be mindful of your consideration cycles - In holiday months, expected customer behaviors often shift. The length of time spent researching prior to purchase will most likely increase during the holiday months due to gift purchasing.

• Take advantage of the aspirational customer - By having a presence in the upper sales funnel, you can convert new customers who may remain brand loyalists long after the holiday. This is a time in which people who may not always shop your brand will be willing to look outside their normal comfort zone as they purchase for others. It’s a great opportunity for retailers to expand reach.

• Consumer research begins early – Shoppers have already begun to scale up their budgets and research gifts for the holidays by late September. Research online leads to in-store purchases. Drabicky says, “Oftentimes we operate in an ROI vacuum. We have to, during the holiday season, really step outside of that and look at the business as a whole.”

• Customers expect free shipping – Consumers not only want free shipping, but over the past few years, they have come to expect it. This is a “make or break” aspect for many customers, who will choose to shop elsewhere if free shipping is not available



Be Mindful of Consideration CyclesConsider research timelines and major shopping days as you plan your holiday promotions. For example, during the Google Post Holiday Shopping Intentions Study in January of 2011, consumers were asked, “How long prior to making this/these purchase(s) did you research it/them, if at all?” Consumers’ answers averaged anywhere from seven days for gift cards to 16 days for electronics and 25 days for vacations.

So, consumers shopping for a television would have started their Christmas shopping on December 9. When planning a marketing strategy for the holidays, it’s important to keep these research cycles in mind.

Have a Presence in the Upper Sales FunnelSearch is a vital source of holiday shopping information. In the Google ThinkHoliday: Post Holiday Learnings for 2011 study, published in February 2011, 33% of customers said they used search as a source of information prior to purchasing, led only by online-only retailers and store websites at 44%.

How does a marketer become more aggressive in the upper sales funnel? Consider non-brand terms. They can be expensive year-round, but during the holiday period, it is a great time to add the more aggressive keywords and target new customers during this heavy shopping research period.

Research Online Impacts In-Store PurchasingIt is a fairly accepted fact that consumers research offline and buy online, and vice versa. But how prevalent is this brick-and-mortar-to-website research and conversion behavior? Google’s Post Holiday Shopping Intentions Study, released in January 2011, indicated that 35% of shoppers researched online and then went to a physical store to purchase. Furthermore, 21% researched online, then checked out products in the store, only to go back online to purchase. These additional steps in consumers’ behavior should be captured and cross-promoted from physical location to online presence.

According to Drabicky, “Not only can eCommerce be a great way to drive revenue, but it is also a great way to get people in the store, to get know your brand again. It is a holistic business play, rather than just a channel approach.”

Multi-device Research Has an Impact As WellNot only are consumers researching online and in-store, but their behavior has shifted to include complex mobile device research as well. According to Google’s calculations, “44% of total searches for last minute gifts and store locator terms will be from mobile devises this holiday season, based on historical growth trends.” This means that having a significant mobile campaign and fully optimized mobile site will be crucial to marketers’ success in Q4.

“For the last five years, it has been called ‘the year of mobile.’ I believe that we have finally reached that point. Technology has caught up with what consumers are truly looking for in terms of mobile research and shopping,” said Drabicky. “It is imperative that you are playing in this space and capitalizing on smartphone research and shopping behavior.”

Google’s Post Holiday Shopping Intentions Study showed that 48% of customers researched on a smartphone and then went to a store to purchase, and 45% bought online after smartphone research. Although extensive research has not yet been released regarding consumer holiday shopping research on iPads and other tablets, Drabicky reminds marketers that tablets will likely be a popular tool for consumer shopping research during the 2011 holiday season.



Section 2: Leveraging Your Own DataAlthough there are best practices across verticals, channels and industries, having an in-depth understanding of your own customer behaviors and your own data can make or break a retailer’s holiday season.

What can be learned from past holiday performance? First of all, do not fear ‘paralysis by analysis.’ Although there may be times throughout the year that spending too much time analyzing specific days or click-paths may not be the most productive use of time and resources, the fourth quarter is very often the most important time of year for retailers. Now is the time to dig into your own successes and failures from years past and determine specific trends that can be capitalized on in 2011 and beyond. From days of the week and times of the day to exposure-to-conversion data, take a microscopic look at your data and act on it.

Focus on any clear data trends. For example:• Expect spikes in site traffic and plan accordingly.• CPC trending is vital during this very competitive timeframe. • Decreases in average order value are common. This trend holds true across verticals and should be planned for

and balanced with strategies to increase overall orders.

In Q4, it is also key to analyze your promotional strategy, and keep some of these elements in mind:• Free shipping is expected – This point cannot be overemphasized in 2011. Find ways to incentivize as well, such

as gift with purchase or free samples. • Consider adding a “hurdle” to your free shipping to avoid the average order value plummeting, such as free

shipping only being offered at a set dollar level.• Bargain shopping and comparison shopping will be prominent.• Be mindful of your back-end margins – When you are offering a percentage off or free shipping, be aware of your

overall profitability or find a loss leader within your product mix to promote.• Don’t forget about your inventory – This is often one of the largest complaints from consumers, that a brand

does not have the inventory available to satisfy the higher holiday demand. It sounds simplistic, but promote the items with highest inventory, or offer a landing page experience that drives customers to view similar items if inventory does indeed become depleted.

Section 3: Holiday Practices Put Into ActionTaking a step back from the strategic view, how have real marketers used these tactics to create success?

A multi-channel retailer, working with iProspect, created one of the most profitable holidays to date with this four-step approach:

1. Strategic budget increases began in October and lasted through December. This allowed them to create a gradual increase and constantly shift and optimize.

2. They launched an aggressive non-brand push to participate in the upper sales funnel.3. They then layered in promotions against their highest traffic and products with highest inventory levels.4. Finally, they maximized all channels in December, including paid search and mobile.



There is also quite a lot to be learned from this specific retailer, in regards to paid search spikes throughout the holiday season. Many of these trends can be applied to marketers in other companies and even other verticals:

• iProspect’s retail client saw a significant increase in clicks during this holiday season. In fact, this retailer saw 40% of all clicks for the year materialize during the October-December holiday season.

• However, the highest CPCs presented themselves during the holidays as well, with increases in competition, bids and budgets.

• Average order value dipped about 25% in December 2010 over the other months of the year. This could be attributed to gift shopping and last minute shopping, as well as shifted inventory during the holidays.

• All of this leads to the trend that truly matters: Revenue. This retailer saw 41% of 2010 revenue materialize during the holiday season (October-December).

Section 4: “Top Five Must Haves” for the holidaysFrom analyzing consumer behavior to applying your own customer data trends, the marathon that is a retailer’s holiday season is ongoing. Here are five key ideas retailers need to keep in mind to ensure success:

• Planning begins now. In fact, it should have begun a few months ago. Secure budgets, plan carefully and get moving as fast as possible.

• Mirror your inventory levels with your online spending budget and promotional pushes.• Employ the omnipresent approach: be everywhere you can, to the point you can afford it, throughout the

holidays. From search and display to social and mobile, this is the time to be aggressive, test and find key learnings that will create success in the years ahead.

• Consumers like offers… so offer them. Promotions are more important than ever this holiday season. And, just to re-iterate one more time: free shipping is no longer a perk, but it is an expectation for shoppers.

• Post-holiday plans are just as important as your Q4 push. Don’t let your hard work during the holidays go by the wayside after New Year’s Eve.

Drabicky concludes: “Don’t turn a blind eye to January. Post-holiday strategies are a great way to move that overstock and take advantage of post holiday shoppers. Optimizing post-holiday can truly set your year up for success.” n



Nick Drabicky is Client Services Manager at iProspect, a leading global digital performance agency. The company helps many of the world’s most successful brands maximize their online marketing ROI through paid search, social media strategy, search engine optimization, display media, comparison shopping engines, conversion optimization, mobile marketing and attribution modeling and management, research, and other related services. Learn more at www.iprospect.com.

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