Best of 2012: Online Retailers Preparing for 2012 Holiday Season

As a percent of total retail sales, the digital channel is expected to remain steady at 7% this year. But the overall growth in retail sales, which will total $226 billion, should be about 12%. This kind of growth gives online retailers a chance to improve their market share, especially during the holiday season.

According to IBM research, retailers should be targeting Generation C (Connected) by focusing on key strategies like mobile and other digital marketing techniques.

While much has been made of social media, the real growth for retail sales is more likely to be linked to mobile campaigns this holiday season. Analysts believe that 20% of retail site visits will originate from mobile devices.  The corresponding percent of sales associated with visits from mobile users will be at least 13%, a figure reached earlier this year. However, retail site traffic driven from social sites has long hovered at around 1% and while sales from this source began to rise this year, they are only at about 2.5%. Analysts do note that the best way to appeal to social buyers is to target them with deals because this channel seems to have a higher conversion rate, 7.5%, than mobile, 2.8%.

It may be that shoppers are treating online as just another channel that they use to find the best deals. This attitude could explain why the average order during the most recent holiday season – for November, December and Black Friday were down a little. Only Cyber Monday saw an average increase of $3 in order size. To improve online metrics, retailers should consider personalizing the shopping experience by making recommendations based on previous browsing and shopping history.

In its 5th Annual Online Retail Holiday Readiness Report, IBM notes that online marketing is key to driving site visits. Research links 32% of site traffic to marketing programs. To excel in the upcoming holiday season, online retailers should be reviewing which formats are most effective for them – email, paid search or display.

Focusing on strategy now is considered critical as consumers seem to have a shorter attention span. Before the recession, consumers spent an average of 10 minutes on a site while they shopped. Now, the time on site is more like 6 minutes 54 seconds. Page views are also down from 12 to 6.7. With less recreational shopping taking place and ‘surgical shopping’ becoming the norm, retailers have to connect with shoppers quickly and effectively to score a sale this year.

Source: IBM Enterprise Marketing Management 5th Annual Online Retail Holiday Readiness Report. IBM. 4 Jun. 2012. Web. 3 Aug. 2012] 

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.