Holiday promotions are here as e-retailers aim to hit their sales targets
10.09.2015 428 views
Online holiday promotions are starting in earnest this month as retailers compete for shoppers’ attention and aim to increase sales from last year, according to ChannelAdvisor’s 2015 Online Retail Survey.
“We’ve seen larger retailers kick off their holiday promotions as early as July,” says Scot Wingo, ChannelAdvisor’s executive chairman. “It will be interesting to see if consumers respond to early holiday promotions again this year and get out their wallets before Thanksgiving.”
Nearly six in 10 (59%) respondents in the survey of 200 U.S. and U.K. retailers say that they plan to start their holiday promotions as early as September. Of the 100 U.S. respondents, 20% say they plan to start promotions earlier than last year, the survey says.
“Amazon's 'Black Friday in July' got holiday promotions going early with the splash it created from Prime Day,” Wingo says.
The strategy of earlier promotions differs from 2014, when the top strategy for increasing holiday sales was to offer free shipping, he says. “Free shipping has really become the norm, so it's more of a requirement nowadays than a strategy.” Last holiday season, total e-commerce sales across all channels jumped 16.2%, according to U.S. Commerce Department data.
The holiday season remains critical, as 74% of retailers surveyed say 20% or more of their yearly sales occur during the holiday season, and 43% saying the holiday season makes up 20-29% of their annual sales. Yet retailers are optimistic, with 82% expecting their sales to increase from the 2014 holiday season, the survey shows.
Online retailers surveyed say their biggest challenge is ensuring timely order fulfillment, which Wingo says is a problem that lingers from the 2013 holiday shipping debacle as UPS and FedEx acknowledged that bad weather and an unexpectedly high volume of online orders swamped their networks. 34% of retailers say fulfilling orders on time is their biggest challenge during the holidays, while the second-largest challenge is adjusting to such competitor activity as promotions (27%), the survey says.
Though order fulfillment improved in 2014, Wingo says 2013 probably still haunts retailers when preparing for the holiday season because customer service is a top priority. This year Amazon has made significant investments in expanding its fulfillment network as a strategy to ship items to consumers faster, he says. That network includes smaller distribution centers where Amazon can sort prepackaged products by ZIP codes rather than wait on the local post office to sort packages.
Nearly one-third (31%) of retailers say they will cut off guaranteed holiday/Christmas on-time deliveries on Dec. 20, the survey says.
Another key to retailers’ success this holiday season will be how they handle orders from mobile devices, Wingo says. “We'll be closely monitoring the performance of mobile during the holidays,” he says. “It will be interesting to see if retailers have their 'mobile moment' when more than half of their total web traffic comes from mobile devices instead of desktops.”
Source: Internet Retailer
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