February 1, 2010

A Reflection on the 2009 Holiday Shopping Season

Looking back on this past holiday season, and my own shopping experiences, it was inspiring to think how much, from a marketing perspective, it has evolved in recent years. With almost three-quarters of households in America having access to the internet and sales starting earlier and earlier each year, it’s not hard to deduce that the playing field has changed faster over the past 10 years than the 50 years before it.

Retail marketers are working harder than ever, across more channels of communication then ever, to convince people to shop at our stores. With ever increasing data about our customers, we are segmenting them in to finer and more specific segmentations with very tailored campaigns and catalogs that speak to their particular needs.

In this blog I am going to take a closer look at the retailer industry and, no matter what industry you are in, how to apply these holiday marketing concepts to your marketing plan year round. I am going to go into more detail on:

  • Different Shopper Types
  • Online versus Traditional Shopping
  • What we have learned

Different Shopper Types
I think most people would agree there are four basic kinds of shoppers that can be clearly identified in today’s shopping world:

1. Traditional Stores Shoppers: These shoppers are probably not technology savvy and older in age. They may wait for their Sunday newspaper and search the inserts for the current deals at their local stores. Many of these shoppers this year may have been surprised to see a decrease in the size and complexity of these inserts, but are still receiving direct mail coupons instead in certain cases. [As we all know, the newspaper industry is contracting and stores have been seeing a reduction in their overall ROI with newspaper inserts. Alternatively, stores have still been sending out coupons to this segment, just via USPS (and are finding higher ROI with this method)].

2. Online Stores Shoppers: These shoppers know how to use the internet and can been very proficient at it. Not only do they know how to search for the best deal, but they are on the email lists of stores to receive “email only” coupon deals. This is the segment of the consumer population that drives up our email open and click through rates.

3. Comparison Shoppers: Savvy online users that are looking for a great deal, but still need that in store shopping experience of seeing the item they are purchasing. Many retail stores today offer “we will match any advertised price” and comparison shoppers coming into the traditional stores ready to take advantage of that deal with their online research.

4. Mail order/Catalog: Though we may not all be catalog shoppers, we all get the catalogs and a lot of them [has any seen that Seinfeld episode were Kramer tries to return his Pottery Barn catalogs to the Pottery Barn store?]. We all look through those catalogs as well. Catalog shopping has also gone high end with stores like Frontgate. Few people do ONLY catalog shopping, but most American households receive several catalogs a month and they generate sales, because the catalogs just keep on coming.

There could be a more types of shoppers, but it would just be a combination of the aforementioned groups. For instance:
Hybrids: These people are both an Online Shopper and Traditional Shopper. Their shopping is purely based on need. They are on email and mailing lists, taking advantage of whatever will suit their needs at the time they receive their emailed or mailed offers. For stores like Walmart that offer both online and traditional stores, these shoppers make the most of both, thus making Walmart the mega-store they are.

Online versus Traditional Shopping
I am a Hybrid Shopper – I buy on-line and off-line, comparing prices and thumbing through catalogs…that’s me.

This year I was heavy into online shopping with the free shipping on most online sites I visited. Not only was I getting free shipping, but when I did pricing research, the online prices were amazing. So based my happy online experience, why am I Hybrid Shopper? Well, I had some people on my “nice list” that I had no idea what to give them. So heading out to the mall for ideas was required. What got me to the mall was the in-store coupons I received in the mail (and the fact they all expired by December 24th; that marketing tactic worked on me).

Because the online world is getting bigger and more attractive, retailers with a heavy brick and mortar presence need to find ways to drive customers into the store. For instance, Walmart’s free shipping to their stores is very clever. Not only do you get free shipping, but they manage to get you into their store. How many of you can walk into Walmart and leave without buying anything? Additionally, stores like Walmart and Best Buy offer “we will beat any advertised price”.

Though online shopping increases each year, I do not think shopping in the stores will go away. Being able to go to the store and actually look at and touch the items we would like to buy sometimes outweighs the free shipping deals – especially for the more pricey the items. Days like Black Friday and Super Saturday are part of the thread of the holiday season. A smart marketing tactic this year was that the Black Friday retailer inserts were ‘leaked early’ on the internet. When I saw this I thought “what a great idea!!” These retailers made it seem that their Black Friday deals were not supposed to be out in public yet. It only fueled the shoppers’ excitement to get to those stores the day after Thanksgiving.

Also, they were catering to the Traditional Shoppers and the Comparison Shoppers. The Comparison Shoppers were able to make their shopping plan of attack earlier than usual.

Another thing to think about is that shoppers tend to change their patterns during the holidays. For example, my mother will do all her gift shopping online throughout the year, but for some reason she is always out at 5am on Black Friday. The stores that offer both online and traditional stores know her shopping pattern and the wise ones will see that buying trend and market to her accordingly.

What we have learned
There are some lessons from retailers that are simple to apply through out the year for better marketing:

Identify your contacts: Go beyond the standard segmentation populations (i.e. customers vs. prospects), take it to a new level. Look at their shopping habits, both short and long term, try to predict their needs and create categories for these different groups. When you are segmenting it will make it faster and you will be able to craft a message that will really speak to each group.

  • NEEDS!!!; I mentioned it briefly in the above bullet point, but this is essential. Whether your contacts already do business with you or if you want them to, it is important to clearly identify what they need from you. Knowing this, you are able to craft a message telling your contacts why they cannot live without your product or service.
  • Patterns of behavior: How someone shops in the middle of summer and how they shop during the holiday season may be very different. In your business can you identify a pattern like this with your available marketing population? How can you take advantage of it? Taking it a step further: how has the economic change affected these patterns as well? How can you take advantage of it?

I do hope this brief overview of this past holiday shopping season and how all marketers can learn from it has been helpful for you. Brainstorm with your peers on how to apply these broad lessons into a marketing strategy that will help propel your 2010 business year. With that I wish all of you a prosperous New Year!