The $36B Opportunity…What’s Next?

With retailers and analysts alike crowing about 2010 holiday online sales, one thing is clear: shoppers went online, liked what they found, and bought.

MasterCard Advisors SpendingPulse reported that online holiday sales exceeded $36B, representing 5.5% growth over the same period last year and including six $1B sales days. Descriptions of online merchants’ holiday seasons justifiably were loaded with glowing adjectives and descriptive phrases like: soaring, feverish pace, healthy revenue gains, robust growth, hot start. This bodes well for a healthy 2011!

The reasons supporting this robust online growth are many – industry marketers cite free shipping, convenience, and the ease of comparison shopping while economists credit pent-up consumer demand and renewed confidence in the economy. In this newsletter last fall, we discussed multi-channel holiday marketing and how to best leverage this for the upcoming holiday season. Many companies were clearly listening.

Online merchants were aggressive and sought ways to eliminate the hurdles in the buying process, with free shipping being mentioned most often. One enterprising website: even dedicated Friday December 17th as “Free Shipping Day” and signed up over 1,300 merchants to participate.

The convenience of shopping online also played a critical role in the “soaring” sales figures. Who wants to wait outside for a store to open in the early morning hours, circle a parking lot for 30 minutes, or spend time standing in lines? Who can argue (other than your boss) with the ease of going online for an hour, making purchases, and having your packages delivered to your door step?

Online shopping also enables shoppers to quickly and easily comparison shop to evaluate price points and discounts, read product reviews, and gauge store and customer insights – you can even find websites that will do all that for you! Times have certainly changed and most online channels and merchants will continue to thrive.

Now’s the Time to Build & Nurture Customer Relationships

According to studies by The Brooks Group, merchants have a 16% chance of selling to someone they never did business with before, a 50% chance of selling an existing client more products or services, and a 25% chance of reclaiming a lost customer account. Since the cost of staying connected with current customers and reconnecting with former buyers is a fraction of what it costs to acquire a new customer, the ROI on this investment often far exceeds that of almost any other marketing program.

With their busiest season coming to an end, now’s the time for retailers to leverage their holiday successes. Online merchants have collectively signed up millions of new customers during the holiday season and must now look to build and nurture these relationships. Loyalty and retention programs must start now! E-tailers must also continue to engage and interact with their new and existing customers with first quarter promotions and relevant offers in support of continued revenue growth.

According to a new Gallup poll, 52% of Americans are optimistic about 2011, which translates to loosened purse strings and the potential for more sales growth in the months to come.

Reach Your Online Customer in Their Preferred Medium – Email

Research recently presented at the Email Insider Summit by Rich Fleck, VP of Interactive Strategic Services for Merkle, showed that permission email between companies and their customers continues to increase. 74% of consumers preferred email as their choice of communication, easily surpassing direct mail, phone, social, and text messaging. Email is perhaps the timeliest and most relevant form of customer communications, enabling companies to extend offers and announce events, all while monitoring behaviors in a real-time environment

Deliverability is the Key to Performance

For your email program to be successful, it’s critical to keep your lists clean and up-to-date. This can be accomplished easily as follows:

  1. Utilize a real-time email correction service on your website. This inexpensive service takes no time to implement and can boost your revenues by five percent or more!
  2. Ensure that every possible touch point (e.g. call center, web site, retail kiosk, POS, direct mail effort) encourages your customers to share their updated email addresses with you.
  3. Perform a quarterly ECOA (Email Change of Address) service on your bouncing and inactive email addresses to gain your customers’ current, preferred email addresses.

Heed the Call

With e-commerce sites becoming easier to navigate for product research, selection, and ultimately purchase, online sales will continue to grow. E-tailers must continue to support and nurture these relationships through online/offline promotions and relevant and timely email communications. Consumers have spoken. Heed their calls.

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