6 Lessons from Holiday 2010

The stats are in. eCommerce blew the doors off during the Holiday 2010 selling season. Total consumer spending rebounded 5.5 percent as shoppers spent $584 billion on gifts. Online sales were $43.43 billion, up 12 percent over the previous year – an all-time record. Eighty-four percent of all US Internet users made an online transaction. Cyber Monday established itself as an institution by becoming the first billion-dollar-day in online commerce.

Now it’s time to walk back the cat by determining how this came to be with an eye toward making it happen again and again. By teasing out what worked and what didn’t we can become more effective merchants delighting our customers.

Consider these factors …

Top Categories – The Good Get Better

Long standing eCommerce players led the way. Software, consumer electronics, books, videos, computer peripherals and PDAs, toys and hobbies lead the revenue surge.  The top 25 online retailers grabbed 68.4 percent of online sales according to ComScore.

Impact of Social Media

ForeSee says it was minimal. According to their study of 10,000 adult online holiday shoppers, just 5 percent of site traffic was influenced by social media. Email was the big driver with search and old fashioned advertising playing equal second place roles. According to ForeSee President/CEO Larry Freed, “ Serious thought needs to be given to finding out whether social media is worth the investment.”

This heightens the friends versus sales conversation. Media Logic found online retailers racking up a lot of new friends during the holiday season. Again leaders expanded their lead as Victoria’s Secret (11 million likes) and Target (3.6 million) posted healthy gains. Bed Bath & Beyond had a 1210% spike in Facebook likes in December and Best Buy, with healthy advertising support, jumped 455 percent. Macy’s broke the $1 million barrier.

A key acquisition tactic was to invite customers to brag about their purchases, show their product knowledge or discuss how they used purchases to decorate their homes, enhance their lives or make others happy. Many brands used active promotions where a “Like” was required to participate to build their fan bases. The operative logic was “you have to give to get.”

Other brands explicitly and repeatedly asked their customers to “like” them on Facebook. Easy social games, trivia questions and simple polls or surveys were also used heavily to solicit holiday “likes.” The missing link is the connection between “likes” which probably represent momentary or mercenary customer self-interest and possibly brand awareness, brand loyalty and maybe brand preference. What’s not clear is the causal relationship or correlation between “likes” and online sales.

Mobile Makes Its Mark

Twenty percent of shoppers used their smartphones in the holiday shopping process. A little more than half of them (56%) used them to check prices. Retailers like Best Buy who drive store traffic with loss leaders and door busters, found customers comparison shopping directly on their sales floor using mobile devices. This was so prevalent that a study by Motorola found that more than half (55%) of retail associates believed that customers had better information than they did.  Eighty-seven percent of retailers admitted that it was easy for savvy shopper to find better deals elsewhere. Respondents estimated that 39 percent of store walk-outs and cart abandons were a result of customers making comparative price checks on their mobile phones.

Tactical Search Takes Off

Search budgets soared 52 percent during November and December. Sales attributable to paid search were up 69 percent, which translates to CTRs up 54 percent and conversions up 21 percent, according to Kenshoo’s 2010 Online Retail Holiday Shopping Report. Keywords focused on specific offers and merchandise, items likely to be comparison shopped and top sellers.

ROI was up 25 percent with search advertisers gaining $10.60 in sales for every dollar invested in pay-per-click ads. Google’s was the big winner since they glommed 82.6 percent of holiday search investments.

Deals Dominate

In the slow recovery, merchants clearly understood that deals would drive holiday sales both online and in stores. Department stores were the first place to research deals since they so frequently offer them. A study from Deloitte found nearly half of all shoppers pre-researched purchases and comparison shopped. Seventy-one percent of holiday shoppers participated in loyalty reward programs; 11 percent used rewards to purchase holiday gifts.

Offers delivered by e-mail, in circulars, in direct mail and through broadcast and social media channels were early, relentless and ubiquitous. 700 merchants made Cyber Monday offers. Trained by the constant flow of offers to wait for the best price, customers did just that looking or better prices by querying friends on Facebook or Twitter and buying more later in the season and comparing offers before buying. Free shipping, offered by 1770 merchants, was the most popular offer by far.

Digital coupons saved holiday shoppers $32 million during the holiday season; an increase of 25 percent featuring average discounts of 26.8 percent. Coupon-driven online sales reached $199 million according to Retail Me Not. Target, IHOP, Bath & Body Works and the Coach Factory Store had the most popular coupon offers. An estimated of 94,000 coupons were shared among friends and family.

Traffic Driving Tactics

The usual day-in and day-out retail drivers worked the hardest during the holiday season. E-mail was the work horse for most merchants featuring special campaigns, special and time-sensitive offers, one-day sales, BOGO, gift-with-purchase, tiered discounts and free shipping. Many merchants increased the frequency of e-mail blasts, some making daily offers during December.


  1. Start early. Anticipate customer shopping behavior.
  2. Determine a sequence and cadence for offers based on customer buying patterns.
  3. Factor in segmentation – build specific offers and sequences for specific segments based on customer value and/or frequency of purchasing. Your database is your secret weapon.
  4. Marshal and orchestrate your channels – be sure that email, tactical search, social and mobile media, rich media and banners, mini-sites and broadcast or print sing the same song or compliment each other.
  5. Parse media to better engage audiences and to build continuous momentum.
  6. Determine which marketing tools and channels work best for each segment then schedule creative messaging and increase frequency.

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