The new breed of empowered consumers honed its shopping skills during the recession. Now, these consumers are taking full advantage of e-commerce sites, smartphones, and social media to save money and make more informed purchase decisions, says Jeffrey Grau, principal analyst, e-commerce, at eMarketer.
These finely tuned shopping skills are most evident during the hectic holiday shopping season. But digital marketers can't wait until the end of the year to plot their online strategies for reaching these increasingly savvy consumers. Now is the time to kick your year-end promotional planning into high gear.
But where to start? Grau sat down with iMedia Connection to discuss the latest patterns and trends driving online holiday shopping behavior. Consider these insights as your plan your year-end online strategy.
Jeffrey Grau is principal analyst, e-commerce, at eMarketer.
iMedia Connection: Most marketers recognize that the rise of online shopping has drastically changed the way consumers spend leading up to the holidays. But what is one surprising insight or data point regarding this shift that you don't think most marketers are privy to?
Jeffrey Grau: U.S. consumers seem to have an insatiable appetite for good deals, as evidenced by the increased popularity of digital coupons, daily deals, and flash sales during the holiday season. But make no mistake about it. Many of the online deal hunters are not people on a fixed budget. There is plenty of research showing that online coupon users tend have higher income and a higher level of education compared with users of newspaper coupons and the general population. Marketers should keep this in mind when targeting their promotions.
iMedia: When it comes to holiday marketing online, what channel seems to be giving brands the biggest bang for their buck? Why do you think this is?
Grau: Email does not get the attention of social media or mobile commerce as a digital channel for reaching customers. But it is a very effective and cost-efficient way to deliver promotions. Customers prefer to receive promotions via email much more so than through the mail, social media, or mobile phone text message. What's more, consumers often share promotional emails with friends and family.
iMedia: What role does mobile currently play in the holiday shopping experience? In other words, to what extent (and how) are consumers using their mobile devices to search for and make holiday purchases?
Grau: Last holiday season, a number of retailers noticed more orders coming from smartphone users. But in the big scheme of things, smartphones are mainly being used by consumers to complete shopping tasks (like finding stores or checking orders) and research products. Few people actually use their mobile phones for serious e-commerce.
The real impact of mobile phones this holiday season will come from shoppers who bring their smartphones with them into a store and scan product barcodes to get competitors' prices, customer product reviews, and see a larger assortment of items than what is available on the shelf.
iMedia: What online holiday marketing opportunity is currently the most overlooked by brands? In other words, where should marketers be investing that they're not?
Grau: Comparison shopping engines (CSE) drive a sizable amount of traffic to retail sites, and they are enjoying an additional boost from mobile shoppers. To take advantage of this opportunity, retailers need to diversify across many engines -- including the new generation of engines like TheFind, which are growing fast and taking market share from the old guard sites such as Shopzilla and Shopping.com. Retailers also need to monitor the effectiveness of their CSE program and analyze their ROI.
iMedia: What company really seems to "get" online holiday marketing? Tell me a little bit about what it's doing that other brands should take a lesson from.
Grau: Zappos stands out for what it does not do: largely avoiding discounts and price-based promotions. The retailer stays at the top of its game with year-round preparation and continuous iteration on the site's user experience, features, navigation, product assortment, inventory management, and marketing. Its social media stance is also contrarian. While other retailers push sales messages, Zappos prefers to use Twitter and Facebook to portray its culture.
iMedia: What common faux pas do you see brands regularly commit when it comes to holiday marketing and selling online?
Grau: Google and Bing continuously experiment with search engine enhancements. Retailers need to keep abreast of these changes to in order to get the greatest exposure during the holiday season. Sometimes retailers undermine their presence on search engines by sending data feeds that do not have the right information.
iMedia: Beyond what we've discussed above, what is the single most important insight into online holiday shopper behavior that you wish all digital marketers were aware of?
Grau: More Facebook users will look for deals and promotions on the site. But retailers should not get carried away by placing a bunch of coupons on their Facebook pages. What a brand's loyal fans really want is an entire brand experience. They want to feel part of a community with other customers and the brand. They want to be heard and kept apprised of marketing and merchandising plans.
Lori Luechtefeld is editor of iMedia Connection.
On Twitter? Follow Luechtefeld at @loriluechtefeld. Follow iMedia Connection at @iMediaTweet.