Practical Ecommerce

Preparing for the holidays

Consumers always seem to stress about the holiday season. They think about all they have to do in order to have a “good showing.” They need to buy all their gifts, prepare the dinners, and arrange for travel and other tasks that are important to them.

We, as online retailers, have to think about the “good showing” and what it means to our clients and in turn what it means to us. This is a make-it-or-break-it quarter for many retailers. Therefore, it’s extremely important we capitalize on the holiday season. A good friend once told me “you make hay when the sun shines” and the holiday season is when it shines for us.

So what are the steps to take? What should retailers do to make sure they are prepared? Part of the list I came up with is obvious, but important and worth mentioning. The rest you might find interesting. While every business is different, many components are related for many retailers.

  • Inventory. You can’t sell it if you don’t have it ready to ship to customers. This is so simple, it’s profound. In some cases this does not mean owning it. Some retailers have vendors that drop ship for them, in which case you have to make sure your vendors can perform as promised. For the rest of us who hold stock, it can be challenging. We have to invest money today for future sales, which is hard to do. Also, we do not have a crystal ball. So how do you know what will sell well? There are no simple answers. At my company, overstockArt.com, we use a simple methodology of ordering weekly based on a monthly demand level and combining that with the date of actual sales from the last 30 days.
  • Prepare your website. Prior to the holiday season you should have already finished all of your planned improvements. You should have already tested what works and what doesn’t. The tools or improvements need to be in place. We have a code freeze starting November 1. This means there are no website changes or improvements until December 26. This does not include images or product changes. Another point to consider: Be very careful if you have a web development company telling you on October 15th “it’s no problem we’ll finish this upgrade in 5 days. Don’t worry.” We learned this one the hard way. Every time we attempted something of this nature it turned very badly and we did not only waste money but also very precious time and focus on the wrong activities.
  • Plan the holiday theme. Make sure your website features holiday imagery. Create a gift center. Plan holiday themed promotions throughout the months of November and December. Consumers expect to purchase items during the season. They need to “have a good showing.” You can remind them in the most critical time to click the buy button. Also, make sure you let them know starting very early that this will arrive prior to the holidays — Christmas, Thanksgiving, Hanukah.
  • Marketing investment. This is the time to spend on marketing. Investment in pay-per-click ads and other type of paid media are much more profitable during this season. You should consider bidding higher and also bidding on keywords that are more marginal. Consider that your close ratio will increase; therefore, you can be more aggressive in your bidding and other marketing activities. At overstockArt, we like to base our close ratio expectation on past year performance. If in the past two or three months we’ve been able to improve conversions we will project a higher conversion than last year as well. It’s time to get aggressive.
  • Email marketing. I left email in a category by itself since it’s incredibly significant. Plan the entire holiday season in advance. Have all campaigns mapped out so that you know ahead of time what the promotions you’ll be running and when. Last minute changes can still be made. Create very aggressive pushes for the Black Friday and Cyber Monday weekend. Your customers do not notice all of your emails. But during the holidays, increase email frequency and keep the deals strong to drive more sales. But make sure the deals are good for both you and your customers.
  • Internal operations. Look at past years to estimate what will be the increase in your business. If this is your fist year in business, expect holiday sales spike according to your industry. Make sure you can ship the orders on time. Customers always want what they bought as soon as possible, but during the holiday season it’s more critical. Also, increase customer service coverage. You do not have to hire more people if you do not have the budget. Just make sure that you shift people in the organization to cover taking care of customers. It’s critical that customers are treated even better during this time of year. That customer experience is key for future growth.
  • Prepare employees. It is critical that you have leaders and managers in your organization speak with employees, especially new employees, and prepare them for the extra workload and for the significance of the season. This can be a demanding time for them at home as well. Plus you are likely to ask them for extra effort and extra hours. Be mindful and respectful of all your employees. It will pay dividends for you long term.
  • Return policy. Customers give gifts during the holiday season. They want to know that it is easy and possible for their loved ones to return if they did not like the gift. I remember going into a boutique store wanting to buy a gift for my wife. After long deliberations and help from the sales associate I found what I felt would be a great outfit for my wife. However, right before checking out I inquired about the return policy. I was told that they could only offer a one-week return policy, which was not enough for me. I promptly told them they could keep the merchandise. This store is no longer in business. We like to offer an extended return policy during the holidays to cover our customers in case they bought the gifts early.
  • Meeting of the minds. Create a meeting that includes people from different parts of the company. The meeting should discuss specifically what has gone well and what did not go well in years past in your company. Also if you have employees who worked for other online retailers, they can share some of their experiences as to what went well and what didn’t. It’s key for that group to be cross functional, so that the information is diverse. This will help not repeating old mistakes and capitalizing on past successes. The meeting should be free flowing with a very loose agenda. Also, have one key note taker who later shares the meeting notes with all involved.
  • Take notes. Lastly, it is critical to think of your business in a multiyear perspective. Next year there will be another holiday season. To best prepared for it, you should take notes during this season of what is working and what is not working for you and for other retailers. Keep your eyes open and learn from actions that others are doing. I make it a point to go and visit a few stores during Black Friday. You can always pick up a few ideas from what others are doing and then personalize it to your industry and environment.

The above list is short and seems simple. And for the most part it is simple. But it provides a good guideline of how to prepare for the most critical time of year.

I wish the best holiday season ever to all of you.


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Comments ( 2 )

  1. Amitai Sasson October 31, 2013 Reply

    Hey David, I am excited about your new column! I look forward to reading your monthly articles.

    Great article, by the way, it’s about time you started writing!

    • David Sasson October 31, 2013 Reply

      Thanks Amitai. I look forward to writing, new articles. It’s fun to consider things we’ve done and share them with other eCommerce merchants.

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