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How consumers and online retailers are gearing up for holiday 2012

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With the first two Thursdays of November already behind us, retailers are acutely aware of how quickly Thanksgiving, Black Friday and Cyber Monday are approaching. In the battle for holiday results, this year Lord & Taylor’s Manhattan flagship store will be open on Thanksgiving Day, while Walmart, Sears, Toys'R'Us and Target will open for business that evening - with yet others following suit a few hours later at midnight. Holiday marketing and ad campaigns this year promise to be interesting: in one early example, Macy’s is bringing together design and media stars of today with Miracle on 34th Street’s Kris Kringle for a blend of new and nostalgia for simpler times.

As online marketing campaigns go into full swing, let’s take a look at online holiday season marketing budgets and what consumers will be on the lookout for from retailers, per the recently released / BIGinsight eHoliday 2012 pre-holiday results:

Online holiday marketing budgets are sizeable... 3 out of 5 retailers we surveyed in July indicated that they are dedicating over 20% of their total 2012 online marketing budgets to holiday. And, no, it’s not your imagination – online holiday marketing and promotion campaigns started earlier this year than last, with more retailers kicking off the season as early as the first week of October.

…as are online promotions budgets. Over one-third of retailers surveyed are dedicating between 21 and 30% of their total online promotions budget for this year to holiday. What are consumers looking for? Free shipping offers (preferably without conditions – 45.5%), to be sure, but also dollars off coupons (45.5%) and percentage off coupons (39.4%). Among women, the appetite for all three of these offers is somewhat higher than the average for all online shoppers. Slightly less than one quarter (22.6%)of consumers also would like to see offers for free shipping for returns. While it appears there will be few of these offers, retailers may want to consider their products and whether a free returns shipping offer - even in lieu of free outbound shipping - might give customers added reassurance about buying those items online (e.g. apparel, footwear, and other items with size and fit considerations).

Email marketing and search continue to top retailers’ online marketing arsenals. All of the retailers we surveyed in September noted that email marketing will see “high” use this year; the same goes for nine out of 10 retailers using paid search, and six out of 10 for organic search. Another two out of five will also make significant use of affiliate marketing. Considering that seven out of 10 online shoppers start their online shopping at a specific merchant site, email marketing continues to be a smart place for retailers to invest marketing budgets this holiday season.

Free shipping is costly, but continues to entice customers. Close to half of online shoppers are indeed looking for free standard shipping offers with no conditions, and retailers surveyed are responding: one in three plans to increase the number free shipping offers this year compared with last year’s holiday season. Still, retailers are trying to manage the offers carefully for maximum benefit: two out of five held off until this month to offer their first free shipping offer.

Social media is an entrenched online marketing vehicle. While fewer consumers use social media sites as a starting point for their online shopping, social media clearly plays a significant role in the purchase process. Over two-thirds of online shoppers tap customer ratings and reviews when looking for information about a retailer or products. And among online shoppers 55 years and older, the figure reaches over three-quarters. One-third also consults Facebook (among millennials, that’s more than two out of five), and one in 10 looks to YouTube – more so than either Twitter or Pinterest.

No surprise: mobile marketing ramps up. Two out of five retailers surveyed are focusing heavily on mobile email optimization this year, and over one quarter will be making significant use of smartphone and tablet paid search campaigns. SMS campaigns are as-yet nascent vehicles – while possibly simply more appropriate for a texting-inclined audience such as teens and millennials and also regulated as an opt-in only vehicle, some retailers have found SMS campaigns effective not only in terms of cost, but in actually driving response to a call to action.