Online Retailers Get Head Start for 2004 Holidays

Now that e-tailers have a few strong holiday seasons behind them, many have learned it is never too early to start planning for next year.

Increasing levels of Internet use and greater comfort with online shopping among the overall population should make next year’s critical November-December stretch rosy, despite continued fear of identity theft, and some e-tailers already are readying their strategies.

With nearly 11 months to bring those plans to fruition, how are e-tailers using that time?

New Recognition

E-tailers long ago realized the holidays require extra planning, but it seems that as each year passes, the ramping-up process becomes a little more in-depth and takes place a little earlier. Also, there is now widespread recognition that, for many businesses, the Internet is not just an isolated branch of operations, but rather a key part of overall strategy.

Bart Lautenbach, director for WebSphere Commerce at IBM, cited sporting goods vendor REI as a company that is constantly perfecting its strategy to make better use of its channels and planning early for the holiday season with extensive research. This year, he said, look for the retailer to make more use of in-store Web kiosks.

“REI has found that people who buy from two channels, like in-store and online, buy 118 percent more than they do if they use just one,” Lautenbach told the E-Commerce Times. “When they use all three, including the kiosks, they buy 48 percent more than if they use two.”

He also expects REI will become even more aggressive with cross-selling and online coupons. “They’re really creating an interactive chain,” he said.

Customer Is Always Right

Also, although e-tailers have learned how to expand their technological infrastructure for peak seasons by paying attention to server capacity and doing plenty of load testing, another area of focus for many companies has nothing to do with refresh rates or usability: customer service.

“We’ve learned that you can never be too in tune with your users,” Kris Chronister, vice president of marketing at Jewelry.com, told the E-Commerce Times. Last year, Jewelry.com began creating surveys that appeared on the site about every month, asking users to rate their interest in various parts of the site.

Examining a combination of those survey results and site use reports about the holiday season led Chronister to understand that some changes must be made in 2004.

Data Knows All

“We had the theory that it was better not to overwhelm people with too many choices,” Chronister said. “We didn’t want to have 16 different versions of the same ring that could only be told apart by a gemologist.”

That theory was not shared by most customers, Jewelry.com found. Its users showed strong interest in seeing more options, even if those choices were redundant. They also wanted more variations of jewelry basics.

Chronister noted that the company’s findings will lead to presentation of a broader range of jewelry in 2004 — plus more surveys to make sure the company is headed in the right direction.

“This year, we saw that people were much more ready to buy,” he said. “I think this is indicative of the economic climate. In 2002, it was more of a browsing market, and people were slower to make a purchase. So, we’ll also be keeping the economic turnaround in mind this year when doing our planning.”

Going More Digital

Established retailer Lillian Vernon may have one of the most interesting years ahead in the e-business arena, considering that the company just hired a Web-savvy new president. Already, the retailer’s online channel accounts for 35 percent of sales, but Lillian Vernon spokesperson David Hochberg told the E-Commerce Times that the company is preparing for its own Internet revolution.

“We want to drive 50 percent of our sales to the Web site in the next two years,” he said. “That’s very ambitious, but with the new president, I think it can be done.”

In terms of what the company learned during the 2003 holiday season, Hochberg noted that a major challenge actually arose because of Lillian Vernon’s own marketing acumen. A surge of e-mail marketing by the company resulted in a deluge of e-mail inquiries that the company had trouble handling. Even though there were many call-center reps, not enough of them were trained in how to answer customer e-mail. In 2004, Hochberg noted, beefing up customer service will be a major initiative.

“Not only will we put in the right resources for handling e-mail,” he said, “but we’re also putting in a ‘proactive live chat’ service, where a window pops up on the site asking if they need help, with a customer-service person right there to help them.”

Armed with their new strategies, e-tailers seem poised to keep online sales rising by leaps and bounds in 2004. Their ultimate goal: to keep the streak alive by making the next holiday season another record-breaker.