Online Marketers, Shoppers Getting a Jump on Holiday 2006

Oct 05, 2006 2:32 AM  By

Consumers are gearing up to start the holiday season earlier this year, according to the 2006 eHoliday Mood Survey conducted by trade association Shop.org and comparison shopping Website Shopzilla, and merchants are following suit.

Nearly 20% of the online shoppers polled said they planned to start shopping for holiday gifts earlier than last year, with 40% planning to start their shopping by Halloween. Anticipating that shift, 39% of multichannel merchants polled said they are starting their holiday marketing earlier this year than last year. Nearly two-thirds (63%) will begin promotions by Nov. 4.

Scott Silverman, executive director of Shop.org, said in a release that shipping deadlines have forced online retailers to shorten the promotional window for the holiday season: “So many of them want to be first out of the gate to debut holiday merchandise.”

And a reason for that, says Donny Askin, CEO of New York-based e-commerce platform provider OrderMotion, is that merchants want to get the best possible profit margins rather than being forced to mark down products later in the season because of slow sales.

In addition, Askin says, small and midsize merchants are starting holiday promotions earlier this year in hopes of better competing with large businesses. Take keyword bidding between large and small merchants: As the holidays get closer, bidding becomes more competitive, and prices escalate, but smaller merchants can gain incremental holiday sales by bidding on those keywords earlier in the season when they are less expensive.

The study also indicates that more online retailers will offer free shipping and other shipping promotions this year. Two years ago only 64% of online retailers offered free shipping with conditions (such as a minimum order requirement); this year 83% will offer the promotion. Indeed, three-quarters of the shoppers polled said that free shipping is one of the most important factors in determining where to buy online.

Among other promotions, nearly 40% of retailers plan to offer “early shopper” discounts, and 31% will offer “first-time buyer” discounts.

Multichannel retailers are planning a variety of online and offline marketing strategies for the holidays: 71% will increase their search engine marketing efforts, 59% their search engine optimization efforts, 45% their affiliate and loyalty program marketing, and 60% e-mails to the house file. Offline, 30% of retailers plan to increase their emphasis on direct mail to the house file and prospects, 29% their catalog mailings, and 26% their in-store marketing.

The survey also found that companies are extremely optimistic about holiday sales, with 21% expecting to experience online sales hypergrowth of 75% or more over last year. An additional 30% expect 30%-74% growth, and 22% expect growth of 15%-29%.

The eHoliday Mood Survey is based on data from online retailers in addition to consumer data. The poll of 2,914 online buyers (defined as anyone who has made an online purchase in the past 12 months) and 80 online retailers, all members of Shop.org, was conducted Sept. 18-21.