You may have thought this year’s eCommerce holiday season would be different from last year’s—but, prepare yourself for a healthy dose of déja vu. While we may see some increase in in-store shopping or in buy-online-pickup-in-store (BOPIS), the recent uptick in COVID cases is likely to make eCommerce a top choice for many consumers once again this holiday season. In fact, the only major difference may be increased competition over last year, as more merchants are better prepared for online and mobile shopping this year due to emergency modifications made in response to the pandemic last year.
2020 saw record-setting eCommerce holiday sales: $12.16 billion in digital sales on Cyber Monday and $10.23 billion in sales on Black Friday. It’s estimated that eCommerce holiday sales will increase 11.3% to $206.88 billion in 2021—to nearly 19% of total holiday retail sales. This year, Cyber 5 digital sales (the five-day period over Thanksgiving Weekend) are projected to hit $38.2 billion.
How can you prepare your business to successfully grab its slice of this year’s holiday pie? You know what we always say: data, data, data! You have eCommerce data from last year’s outlier holiday season that you can and should leverage to inform this year’s holiday eCommerce strategy to have your best holiday season ever. Read on for some recommendations on the best practices and eCommerce metrics to analyze to give you the insights you need.
First, some housekeeping
Before we dive into what data to use to inform your holiday eCommerce strategy, there are two housekeeping items to mention.
First, ensure your website and mobile experience are optimized: make sure that pages are loading quickly, there aren’t issues with the checkout flow, etc. Slow page loads will kill your conversion rates. Studies show that conversion rates drop on average more than 4% with each additional second of load time. Seventy percent of consumers say that page speed is a factor in their willingness to buy. Mobile experience is particularly critical; last year, half of digital holiday revenue came from purchases made on smartphones.
Second, clean up your email lists now. The iOS 15 update to be released this fall will allow consumers to turn off open tracking, block their IP addresses, and hide their email addresses—which will make it harder to track email performance. This is really important, as iPhones have more than a 50% share of the US smartphone market (a percentage that grows every year).
eCommerce Data: Your most valuable competitive advantage for holiday
As you know, the holiday season, including BFCM, is critical for most merchants, accounting for 19% of total annual retail sales, on average. Use your data to shed light on your most pressing holiday challenges, including identifying the right product mix, having the right inventory levels, boosting profitability, and optimizing your marketing spend.
Forecast your targets
You have to know where you’ve been to know where you’re going. Review sales data from last year as well as past years to forecast target revenue for this year’s eCommerce holiday season. Also, identify the different levers you can pull to set higher revenue goals this year, such as driving more traffic, increasing conversions, and boosting AOV via new promotions or marketing channels.
Determine product mix and inventory
Which products will you promote this year? It’s not only important to understand what your most popular products were from last year’s holiday season but what your most profitable products were. Additionally, volume matters: once you identify your top, mid-tier, and low volume products, you can estimate how much inventory you’ll need to have on hand so that you don’t run out. Everyone hates ordering a gift for December that they discover won’t arrive until the end of January.
Plan your marketing
Look back at last year’s holiday marketing budget and return on ad spend (ROAS). Also determine which promotions were most successful and which channels (e.g., social, search, email) drove the most holiday traffic and conversions for your business last year. If you forecast how much traffic you need to drive to hit this year’s holiday revenue goals, you can estimate how much you have to spend per customer and on which channels.
Perhaps unsurprisingly, with more limited in-person social contact, last year saw an increase in using social media platforms for product recommendations and shopping. Nearly 8 in 10 consumers said they used at least one Facebook app or service to find gifts, and it was estimated that social commerce accounted for 11% (or $474 billion) of total global retail eCommerce revenue in 2020. This will likely occur again this year, so be prepared. Last year’s data can help you determine which social channels were most effective for you
As always, SEO should be a huge factor in your holiday marketing. Last year, search accounted for 45% of visits and revenue during the holidays, with paid search being slightly more effective than organic search. Look back to see which search terms resulted in the highest conversion rates at the best CPAs. Also factor in which terms are trending this year.
Importantly: don’t forget your existing customers. They can be very profitable, relatively low-hanging fruit for your holiday marketing efforts. The holiday season also can be a great opportunity to grow the customer relationship by providing value. Show them the love! Use behavioral and contextual customer data to personalize emails by surfacing relevant products, making recommendations, and providing special VIP offers to inspire them to shop. Promotional emails continue to show high conversion rates—a 111% increase in 2020 over 2019—for online shopping.
Lastly if you’re not already, consider testing SMS marketing to help boost holiday shopping and improve customer experience. 2020 saw a 378% increase in SMS messaging over 2019, with an average conversion rate of 2.65%. In addition to delivering promotions, SMS can provide a convenient way to keep customers up-to-date on order and shipping status. Look at your past promotions to help you determine what messaging, tactics, and channels are most effective in getting consumers to share their contact information to grow your SMS list.
Plan your merchandising strategy
Look at site performance data from last year to help you determine how to most effectively merchandize products on your site. Which pages did customers spend the most time on? Which type of device did they use to shop?
Also, which products were bought together most frequently? Bundling products that are often bought together is an excellent way to increase AOV, conversion rates, and customer LTV.
You may also want to consider creating holiday landing pages optimized for mobile and pop-ups that highlight your top sellers and gift ideas.
On average, 25-30% of holiday purchases are returned. Look at your own data to see how you fared last year. What can you do to reduce the number or returns and/or increase exchanges? How can you create a better customer experience? In addition to maintaining higher holiday revenue totals, a good returns or exchange experience is an opportunity to increase customer LTV, which is critical for your long-term business health. One example shows a more than 130% increase in LTV resulting from customers’ good return/exchange experiences.
Power up the holidays
You have the opportunity, as more consumers are shopping online, and you have the power—eCommerce data at your fingertips—to have your best holiday season yet. At Daasity, we’re here to help. Check out information on our blog about forecasting, marketing attribution, ROAS and more—and if you need a data analytics platform to pull it all together, we’d be happy to show you a demo.