I recently chimed in on a post that was published on one of the forums I frequent. A question was posed from a new store owner, “What do we need to do to get ready for the forth quarter, holiday time.”
I was shocked at one piece of advice a fellow e-commerce store owner gave this person, “Stop spending money, 4th quarter will be worse that last year.”
I will agree that Q4 2008 was a disaster for e-commerce, but who can predict what this year is going to be like. I remember hosting a “Get Ready for the Holiday” webinar two months before Christmas and the stats I was pulling from various bellwethers weren’t that bad. Those stats proved to be very far off once the final numbers were tallied in January.
While job losses remain historically high and consumer spending remains low, the pundits can preach over and over again about how bad this upcoming holiday is going to be, but do they really know? Absolutely NOT! If they did, they would be giving out tonight’s winning lottery numbers.
There is not one person out there who can definitively tell any one of us that the upcoming holiday season is going to be good or bad. And that’s the truth. To tell a business owner to “stop spending money” is just plain foolish and irresponsible. This is the type of advice your competitor WANTS you to take!
When the economy started failing, I saw businesses immediately pull their pay-per-click advertising and I started shaking my head. You can cut back your spend on campaigns that aren’t providing a good return, but to simply shut off your advertising is like turning off the lights, going home and retreating under the bed. Oh, and by the way, if you did this… your competitors thank you.
Many businesses capitalized on the fact that their competitors were shutting off their advertising, it not only lowered their cost-per-click but also gave them almost exclusivity in that ad space. Smart storeowners spent more money on advertising where their competitors stopped and reaped the rewards.
Making hasty judgments out of fear or despair is not a way to run a business – either in a good economy or bad. Making informed decisions that are backed by analytics and best practices is how to proceed.
I’ve been an e-commerce storeowner since 1994. That’s a long time and there aren’t that many people who have been around as long as I have. I’ve seen many competitors come and go and I’ve seen a lot of good e-commerce businesses fail because of bad judgment. I’ve gone through my share of holiday seasons and can sympathize with you about last year’s dismal performance, but it doesn’t mean you give up this year.
Here are my recommendations for carrying on and making the best out of an uncertain upcoming holiday season:
Don’t sacrifice service. The first thing many companies do when things go south is to cut back on service. If you sell something, you’re in the service business. Selling online is an impersonal activity; there isn’t any interaction other than shopper and computer. If your shopper has a question, give them clear ways for them to contact you. Make sure your phone number, email address and all store policies, including shipping and returns, are spelled out and easily accessible. And don’t limit your phone hours to two hours a day, this is your business, treat it as one. If you don’t have the ability to staff a phone, consider outsourcing.
Be descriptive. You may be selling the same product that 500 other e-commerce stores are. Don’t use the same product description that the other 499 are using. Write unique content that is descriptive and doesn’t leave the shopper with any unanswered questions about your item. Unique content helps to sell product and is also a tremendous benefit for search engines, as they often frown upon duplicate content.
Keep it simple. Your website should flow well. That means your navigation needs to be easy, common functions need to be up front and center, product info pages need to be clean and concise. Cluttering your site with flashing animation, cumbersome navigation and an Easter Egg hunt to find information doesn’t get you customers, it’s gets you a high abandon rate.
Invest in features that convert. You’re spending money to get customers to your door, now get them to buy. Do this by installing features that improve the customer experience, get them to add-to-cart and most importantly, get them to checkout. Examples include Scratch & Save, Store Locator (for those with B&M), Cascading Menu and more. Don’t forget your checkout either; if your checkout doesn’t match the look and feel of your store, you’re adding confusion to your shoppers. Invest in a checkout makeover to make the experience consistent.
Embrace social media. Twitter, Facebook, MySpace and YouTube is hot, and they’re free. Spread your company’s message on these social networking sites and build a loyal following of potential and existing customers who will carry your message on to their friends and followers.
Take advantage of CSEs. Comparison Shopping Engines (CSEs) are a major source of revenue for many e-commerce stores, including mine. My lawn & garden supply site generates thousands of dollars in sales each month from the CSEs. If you’re not taking advantage of these sites (Shopping.com, BizRate.com, etc.) investigate them now. Solid Cactus offers a product called FeedPerfect that is “perfect” for helping you manage your products in the CSEs and also helps you maximize your ROI (return on investment).
Negotiate, negotiate, and negotiate! I don’t take on a product line unless there’s something in it for me. Sound selfish? Absolutely! But it’s a way of doing business. Your vendors want you to sell their product. If you’re selling a substantial amount of their product now is the time to hit them up for discounts, free merchandise for promos, or other incentives to get you to sell more. I don’t send out an e-mail or promo to customers unless the vendor is backing up that communication with an offer. When I did catalogs, it was pay-for-play. Companies have advertising budgets and co-op funds available, twist their arm, it pays. While you’re at it, don’t forget FedEx and UPS. Discounts based on volume are available, take advantage them, call your account rep and have a sit down today.
Spend wisely. I’ll say that again. Spend wisely. I didn’t say, “don’t spend,” I said, “spend wisely.” The economy is tight, nobody is arguing that. Make the right choices when considering where/when to advertise, watch your inventory closely and don’t overbuy, and constantly monitor your balance sheet and watch your ROI. If you don’t understand finance, enlist the help of a good accountant or friend who can help you. Two sets of eyes are better than one.
Nobody knows that the holiday is going to bring, but we can prepare for worst and pray for the best. Take it from someone who has “been there and done that” and don’t run scared. Run your business.