Written by Michael Koploy, ERP Analyst, Software Advice
The holidays are a make-or-break season for many retailers. This season is expected to bring in up to $877 billion in sales, including as much as $37 billionfrom e-commerce. But consumers are tightening their belts. A recent Northwestern Mutual poll found that 52 percent of consumers are creating holiday spending plans this year.
To help retailers ensure they’re part of those spending plans and keep point of sale systems humming, I’ve put together five straightforward strategies to increase traffic, revenue and conversions this holiday season, while building customer loyalty to encourage continued spending into 2012.
1. Use Social Media to Gain Followers and Instill Urgency
Facebook is becoming an increasingly popular platform for both small and big box retailers’ storefronts. Intuit’s recently announced SimpleStore for Facebookshould help many independent retailers get up to speed on integrating e-commerce into their Facebook pages.
Of course, a successful Facebook presence requires a loyal fan base. Uniform Advantage, a medical uniform e-tailer, used an innovative technique to obtain new followers and future customers. They ran a promotion in November that promised a Black Friday discount worth one percentage point for every 1,000 “Likes” its Facebook page received (e.g., 20,000 Likes would result in a 20 percent discount).
Another effective tactic for retailers is to promote daily deals through Twitter. Kmart, for example, has set up @KmartDeals to promote these deals to its followers. Retailers can encourage consumers to shop impulsively by creating these time-sensitive holiday promotions, and maintain those followers after the holidays.
2. Partner with Mobile Shopping App Vendors to Build Loyalty
A recent survey by Prosper Mobile Insights found that 40 percent of smartphone owners use their phone in-store. Partnering with check-in shopping tools such as Foursquare and Shopkick is a great way to get customers to visit the store and to purchase promotional items in exchange for loyalty points. It’s a win-win for retailers and customers.
These apps reward users for entering the store, which brick-and-mortar retailers want. In fact, Shopkick places sensor hardware throughout the store, so customers can be rewarded for visiting specific aisles or departments. And customers are excited to earn loyalty points, which are redeemable for a variety of things. This, in turn, helps build customer loyalty.
3. Present Easy In-Store Item Pickup Options
Offering online customers the option to pick up their merchandise at the store benefits customers in several ways, all of which help motivate customers to spend more. It allows customers to obtain their merchandise faster. Customers don’t have to pay shipping. And customers don’t need to worry about being home when the delivery is made, expensive items being stolen when left at their door, or products damaged in transit.
The option to pick up merchandise in the store is also great for the retailer, because it affords them an opportunity to up-sell or cross-sell the customer additional merchandise or services when they come in, such as lucrative extended warranties on electronics gear.
I recently experienced how Best Buy has done a great job of encouraging customers to pick up online purchases in-store. The retailer’s Black Friday promotion included a $10 gift card for customers who purchased online and selected store pick-up. I took advantage of the promotion and, when arriving at the store, found a convenient parking spot reserved for in-store pick-up customers. The process was equally as pleasant inside the store, with my own queue to speak with a customer service representative. Any retailer could offer similar programs.
4. Extend Return Policies to Encourage Gift Purchases
Most purchases made during the holiday season are gifts. But many consumers hold off on buying gifts until later in December so that the recipient can return the product within the standard 30-day return window. Temporarily extending a return policy to 60 days encourages customers to buy earlier in the holiday season, which is great for retailers.
It’s also important to offer recipients the option to return their undesired gifts to a retail store. This is more convenient for many consumers than returning products by mail and avoids additional shipping or packaging costs. Moreover, it eliminates a common concern about buying online. It’s also a plus for retailers, because it presents new cross-sell and up-sell opportunities.
5. Offer Reduced or Free Shipping to Entice Online Purchasing
The Internet marketing research company comScore asked online shoppers last week how important free shipping was to their purchase decision. Over 78 percent responded that they either actively seek free shipping deals or won’t purchase without it. Retailers should consider offering a temporary free shipping promotion, a reduced shipping rate, or a lower free shipping threshold. Any of these approaches, particularly in conjunction with a limited-time offer, will help increase customers’ average order values.
These offers should be aggressively promoted on retailers’ websites and through social media channels. There are many other strategies that can be successful this holiday season, but the best seasonal retail strategies will drive more traffic, reduce resistance to purchase, and encourage customers to spend, spend, spend. What other quick-fix strategies have you seen improve retail sales during the holidays? Please leave a comment and share.