2017 eCommerce Holiday Readiness Survey Results & Recommendations

With Thanksgiving and Christmas holidays fast approaching in the US, over 130 million potential shoppers are expected to take to retail malls and ecommerce websites to find the ultimate gift. eCommerce sales are sustaining double digit growth, according to a report by Kiplinger, finding 14% growth in online sales forecasted this holiday season over last year. In 2016, 56% of shoppers reported they would shop online during the same period, indicating great potential for anyone selling online.

Episerver Commerce recently conducted a spotlight survey of eCommerce merchants to assess the strategies and tactics companies are considering for the 2017 holiday period. Episerver has included three focus areas based on this data including metrics to focus on, how to use content to compliment promotions and how to use personalization to maximize traffic building activities.

Key Survey Findings

  • Holiday/Christmas period is a make or break selling period. Two out of five online merchants expect to achieve 40% or more of their total revenue goals during the holiday period. 83% expect to achieve 10% or more. This underlines the importance of the holiday period for companies selling online.
  • Black Friday/Cyber Monday growth. 67% of online merchants anticipate more orders compared to last year on the Black Friday/Cyber Monday weekend.
  • Focus on existing customers and average order value. Online merchants are prioritizing increasing repeat purchases from existing customers and increasing average order value as key objectives over increasing traffic and new customer acquisition.
  • Larger merchants are focused on profitability while smaller retailers focus on growth. 21% of smaller online retailers report net new customer acquisition is most important compared to just 7% of larger merchants. Mid-size merchants ($25M to $99M) are focused on increasing repeat purchases and overall basket size. 
  • Traffic growth. Merchants are counting on growing traditional traffic sources such as Email (61%) and Paid Search (50%) to somewhat or significantly grow. But outliers like Social Advertising (50%), Retargeting Ads (44%) and Social Media Referral (33%) are expected to contribute to overall traffic growth.
  • Sale items are intended to hook customers. 28% of companies plan to use sales on individual items to get shoppers to buy. Buy-one, Get-one (16%) and Spend more promotions (16%) are also popular.

Focus Area 1: Merchants should focus on increasing basket size and revenue per session.

Merchants reported that increasing repeat purchases and cart size are their top priorities; new customer acquisition and building traffic are less important. A large percentage (44%) of respondents said they track average order value (AOV) and conversion rate most closely during the holiday period. Larger retailers are using broader metrics such as revenue per customer or revenue per session.

Conversion rate and AOV are obvious and important measurements. However, these metrics serve a diagnostic purpose. Revenue per session and revenue per customer are more holistic indicators of overall performance. Conversion rate indicates how qualified your traffic is and how users are moving through your experience. “This can lead to false positives,” says Joey More, Personalization expert at Episerver. “Conversion rate may go up, but if you’re converting more visitors into customers at lower basket sizes or less profitable items, Santa is going to put a coal in your stocking this Christmas.” 

Online merchants should track revenue per session or revenue per customer on a daily basis during the holiday season. This metric can be further segmented by factors such as digital marketing spends or time of day to give online merchants a much clearer picture of if your campaigns, promotions and merchandizing are performing in harmony. Revenue per session will help you determine the effectiveness of campaigns that are sent to the same user via email or other channels. Revenue per user will help you determine the aggregate impact of your digital marketing to acquire customers. Google Analytics provides a quick path to a related metric, revenue per users using Calculated Metrics [BETA].

Focus Area 2: Protect margins by using engaging content.

Many companies are relying on deep promotions to drive the initial sale. 28% of survey respondents stated they would run sales on individual items as a primary vehicle to drive sales. This has created a positive feedback loop where consumers are on the hunt for deals so merchants feel the pressure to discount more. In 2016, one out of three shoppers reported that all their purchases during the holiday period were on sale . The temptation to run deeper and deeper discounts creates downward pressure on profitability. Many merchants hope to turn loss-leader customers into repeat customers later in the holiday period or in the new year. This is risky and not always necessary.

This is where content comes to the rescue. While nearly 20% of merchant’s plan to create holiday-specific landing pages, there is an opportunity to go much further with content. In addition to providing wallet-opening deals, merchants should create eye-catching content to engage high value customers. With many merchants focused on increasing purchases from repeat customers, content-first campaigns with strong sale items can deliver profitability above and beyond competitors.

Innovative customers are using buying guides and exclusive content to create brand and product preference. This can relieve some of the pressure to discount. One Episerver customer leveraging content is Wex Photographic. Michael Barker, chief technology officer at Wex shared that “discounts may drive immediate sales, but content fosters passion and loyalty. It therefore becomes a balance between immediacy and longevity.” Wex secures exclusive content including interviews with the set photographer for the television show Game of Thrones and high-value guides such as ‘Time Lapse for Beginners’ which feature video content with embedded product recommendations.

Wex captures imagination and cache including in-depth interviews with Game of Thrones photographer 

Wex also delivers substantial product knowledge with introductory photography lessons

If you are going to use discounts on individual items, we recommend using strategies like those of Episerver Commerce customer, Samantha Willis, and Australian jewellery brand. The company is trying a 12 Days of Christmas campaign which features a different offer each day. The strategy creates anticipation and engagement related to the Christmas theme and not just the sale on the individual items on sale.

Focus Area 3: Optimize and personalize digital marketing channels to increase qualified traffic

Growing traffic plays a large role in achieving objectives such as customer acquisition and increasing average order value. Overall, merchants in our survey expect traffic to increase from all channels. Very few respondents expected traffic to decline in any category. The top three traffic sources expected to increase are Email, Social Advertising, and Paid Search. Email and Paid Search represent the two largest proactive digital marketing channels online merchants use while Social Advertising is becoming more widely adopted. Half of merchants expect traffic from Social Ads to somewhat or significantly grow. Many merchants may be using social media ad placements more prominently for the first time this holiday season.

As consumers are deal hunting, finding qualified traffic becomes crucial. This is where personalization can enhance digital marketing programs merchants are running. Merchants can drive more qualified traffic to their ecommerce sites using personalization in two channels, email and paid search. Organic search can also be improved with the use of content. When it comes to optimizing and personalizing email campaigns, there are several areas of focus:

Email: segment more and strategically personalize
Segment smaller lists of subscribers to provide more targeted content or offers
Online merchants need to move beyond ‘batch-and-blast’ email campaigns, if they haven’t already. René Kulka, Email Marketing Evangelist at Episerver, suggests using segmentation to increase open rates. “Tailored campaigns to smaller segments leads to higher response rates,” says Kulka. “Incorporating behavioral data to engage customers who did not convert and looking at last year’s email buyers and motivating them to purchase again are quick wins.”

Create continuity between email and website with personalization
Marketers and merchandisers have previously been constrained by the individual products that they can include in email campaigns due to concerns around inventory availability or of prices changing throughout the day. This has meant that organizations have tended to focus on driving customers towards top level category pages or specially created landing pages. The technology exists today for online merchants to present individual products that are relevant to the user based on their recent browsing behavior and their historical purchases without the risk of showing products that aren’t available. Personalization engines now embed product recommendations in the email at the time the consumer opens because the technology ensures that only products that are in stock are shown with the latest price.

Typically, the product recommendations strategies that perform strongest on broadcast emails are those that focus directly on the users most recent behavior aligned to some buying signal. This might be presenting back a product that the user has previously abandoned in their basket, popular items based on their previous purchases or views or recommendations based on previous basket additions. These strategies have proven to have a click-through-rate five to ten times higher than that of more traditional weekly best sellers or products handpicked by the merchandising team.

Use abandon cart email triggers to recapture orders
Shoppers abandon carts for many different reasons and sometimes they are just using the cart as a temporary wish list. It’s important to recognize that people who abandon a cart and people who abandon from checkout pages are at different stages of the journey and therefore require different messaging. For abandon carts, something about their selection wasn’t quite right, therefore, focusing more on cross sells and even alternative popular products from the same category can capture the sale. Users abandoning the checkout may have abandoned due to poor user experience, unclear returns policy, or high shipping fees. Emails to these consumers should be treated as a courtesy service message.

Insert product recommendations into order confirmation and order shipment emails
Recommendations that relate to the customers most recent purchase are the most appropriate and best performing in confirmation and shipment emails. Buyers remorse is often at its highest right after the order confirmation page so the next two communications need to be reassuring to the purchaser. Recommending alternatives (sometimes even cheaper!) shouldn’t not be done. Instead, let customers visualize how additional items might complement what they have just bought. These two types of email often have the highest open rate so be sure to present items that are relevant to the user for maximum effect.

Paid Search: Optimize Product Listing Ads (PLAs)
50% of survey respondents expected paid search to increase. Paid advertising can now be personalized using individual and crowd behavior data analysis. Personalization vendors (including Episerver) can embed personalized product recommendations into Google Shopping PLAs to put the most relevant products in front of the customer and get them to the right product quickly. Brands like Hawes & Curtis combine personalized PLAs with personalized landing pages from search to create continuity and frictionless purchases. Combined with holiday promotions, this can quickly convert high purchase intent shoppers into buyers.

Hawes & Curtis personalizes Google Shopping PLA’s with product recommendations.

 Hawes & Curtis delivers continuity on the PLA landing page with 4 to 8 personalized product recommendations.

Aligning the products attributes very closely with those of the product that the user clicked on from the Google Search Engine Results Page has proven to reduce bounce rates by 10% and improve conversion rate for these shoppers by 26%. By showing close alternative products, users are drawn deeper into the site and are less likely to bounce back to the Google SERP and click on a competitors ad. Including bestselling or trending products from the same category (but perhaps a different color or from a different brand) adds a level of serendipity, presenting products to the user that they might not have discovered themselves.

Organic Search: Use Buying Guides to increase SEO rankings
Doubling back to the importance of content this holiday season; in addition to complimenting discounting and promotions, content can also boost organic search traffic. Buying guides are popular search terms by consumers looking to browse gift ideas for their families and friends. By creating broad holiday landing pages or gift idea pages, you provide maximum exposure of top product categories. These landing pages and gift guides can also include personalized product recommendations using the machine learning algorithms used in email and paid search.

There is no doubt that the upcoming holidays are going to be important for online merchants and it will be interesting to see if last year’s 14% rise in online sales sees further growth in 2017. If basket size and repeat purchases are key for online shoppers, discounting should be moderated to drive profits. Content is increasingly king, therefore online retailers should use it to complement their promotions and use personalization to increase traffic volume and relevancy.

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Edward Kennedy

Edward Kennedy

Commerce Strategist @Episerver

Email: Ed.Kennedy@episerver.com

The ultimate guide to mastering ecommerce optimization

Ecommerce guide

This guide examines the entire customer journey to show how each step along the way can be optimized for better results. Episerver’s built-in features make the process even easier.

Download guide