8 Ways for Online Retailers to Make More Money This Holiday Season
Leading analysts like Forrester and Deloitte predict that online retail sales in both November and December will increase double-digits year-over-year. This might come at a steep price for smaller retailers however because of increased competition among merchants in the form of aggressive discounting, free shipping and other promotional offers. With holiday sales accounting for as much as 30 percent of total annual revenue for some businesses, it's time for e-commerce merchants to up their game.
Below are eight tips to help online retailers get a larger piece of the action this holiday season (and do so profitably:
1. Extend your reach. Listing products and managing inventory across multiple sales channels is something that retailers must take advantage of. Most online merchants should be selling via multiple sales channels, if they aren't already. Consumers today visit multiple shopping destinations — the merchants own websites, Amazon.com, eBay, Google Shopping, daily-deal sites, search engines, etc. — to comparative shop. Reduce your exposure and you reduce your sales potential. Hence GameQuestDirect, a wholesale video game seller, uses an integrated e-commerce and order management platform to sell 10,000 SKUs simultaneously on 15-plus sales channels without running the risk of back orders.
2. Too much or too little inventory are both dangerous. Carrying excess inventory means risking markdowns in January, not to mention the up front capital investment. Have too little inventory and you risk losing orders and the ability to fully capitalize on your advertising and promotional efforts. Merchants must therefore invest in systems that allow them to easily and automatically juggle inventory across multiple customer touchpoints. So if a product goes out of stock or runs low, it can quickly be pulled off the shelf without circumventing the opportunity to sell. This avoids back orders as well as customer service issues that result from taking orders that can't be fulfilled.
3. Moving slow-moving goods. In order to differentiate themselves, many merchants tend to focus on unique items that may not have mass appeal. Retailers selling on popular online marketplaces have the ability to deal with the goods that aren't moving as fast without compromising their profit margins across the board. For example, they might offer discounted pricing on Amazon and Buy.com to quickly move stock, but still maintain full price on their own website.
4. Employ competitive but clever shipping tactics. Merchants that sell unique, hard-to-compare items may consider including the cost of shipping in the item price to preserve their free shipping programs. For example, RollerWarehouse.com, a merchant that sells custom skates and rollerblades to teens and young adults, offers free shipping for life to any student who maintains at least a "B" grade point average or has bought $1,000.00 in aggregate merchandise.
5. Match price drops as they happen. By using automated repricing tools that make product price adjustments, retailers can monitor and respond to competitors’ price changes as they happen on marketplaces like Amazon and eBay. GameQuestDirect.com uses these tools to stay highly competitive across 15-plus sales channels, effectively warding off price wars and margin erosion because its competitors know the brand won't be beat on price.
6. Deploy intelligent site search technology. Having an effective site search feature on your website that reflects current pricing and inventory numbers is crucial to retaining shopper interest, especially during the holidays. Time-strapped shoppers quickly resort to site search to find the items they're looking for, but they lose patience with websites where the price or stock availability is ambiguous.
7. Remarket to abandoned shopping carts. Consumers have short attention spans, especially during the holidays. They may respond to your offer, visit your website and add items to their shopping cart, but then leave. By using automated reminders and shopping cart recovery emails, merchants can target these shoppers through a series of drip email campaigns. MyWeddingReceptionIdeas.com uses a built-in transactional email feature to effortlessly send personalized communications to those consumers who abandon their cart, such as "You left some items in your shopping cart" and "Can we help you check out?"
8. Beware, they may come but not stay. Online shoppers today expect fast-loading and error-free web pages. If your pages take longer than five seconds to load, you run the risk of losing many visitors altogether. Provisioning a secure and scalable e-commerce hosting infrastructure that can comfortably cater to spikes of traffic just during the holidays is generally very hard and cost prohibitive for most merchants. Explore technologies like content delivery networks and hosted e-commerce platforms with sound technology architecture as ways to scale cost effectively.
Manish Chowdhary is the founder and CEO of Cahoot, a peer-to-peer order fulfillment network where merchants collaborate to increase their sales and margins by offering profitable one-day and two-day free shipping to customers nationwide without spending a penny more than the economical ground shipping.
Manish is an innovator, thought leader, and a highly sought after speaker for all facets of e-commerce. Manish has founded multiple industry-leading companies starting from his dorm room at the University of Bridgeport, CT. Manish’s specialties include e-commerce strategy, business methods innovation, supply chain and logistics optimization, and he holds 10 U.S. patents. He has been featured in The New York Times, Internet Retailer, and many other leading publications. Manish’s mission in life is to positively impact millions of lives through technology and leave the planet in a better state than when he arrived.
Manish is a 40 Under 40 Competition Winner and holds an Honorary Doctorate, the highest honor from his alma mater, University of Bridgeport, CT.