Adobe articles, featuring Omniture technology
To Marketers, Holiday Lockdown Is No Longer Relevant
There's an old saying that no battle plan survives once the first bullet has been fired. And I would argue that no holiday season merchandising plan, no matter how well-informed, survives once the first product has been purchased. So why would you firm up a plan in advance, without ever knowing, for sure, just what will happen once the "battle" commences?
Marketers are already beginning to gear up for the holiday buying season, and for many, that means they're putting into place a merchandising calendar: We're planning which promotions we'll offer. We're deciding on what date we'll stop offering free shipping. And we're nailing it all down now, because we know that, come November 1, lockdown begins and we will not be allowed to make any unplanned changes to the site.
Instead of planning testing and targeting tactics that will maximize conversions and purchases, tactics that will take advantage of the special buying behavior consumers exhibit just prior to Christmas, we're preparing to hunker down and hope for the best.
I'm going to let you in on a secret: Those of us who plan their holiday season this way are taking an enormous risk. We are potentially leaving countless dollars on the table by forcing our customers into a game plan that may not even work. And we're doing it during a season of utmost potential.
Lockdown Once Made Sense
Please don't get me wrong. I know that lockdown was once absolutely necessary. Back in the late nineties, when just keeping the site up and running during the holidays was a challenge, even minor changes were risks. And in 2001 and 2002, many online retailers were still struggling to keep the appropriate amounts of inventory up; they didn't have time to worry about maximizing returns.
But now the technology exists to make constant changes -- to test and tweak and test again -- with no risk whatsoever to the function of the site itself. The technology exists that allows marketers to keep the site just the way it is except for small "content slots" (what we call mboxes) that we can change depending upon the various parameters that we place upon it. We can practice testing, targeting and personalization, in order to give consumers exactly what they want when they want it.
Because that technology exists, resistance to using it is nothing more than resistance to maximizing returns.
Why Testing/Targeting Only during the Off-Season Doesn't Make Sense
What many marketers will argue is that they practice targeting, testing and personalization during the rest of the year. "We test variations on promotions, content and merchandising prior to the holiday season," I have heard over and over again. "Then, we use what we have learned off-season to better serve our customers during the holidays.
That sounds good -- except for two basic (and enormous) flaws in the thinking:
- Flaw #1. "My holiday consumer is the same as my non-holiday consumer." Though you may have many of the same customers during the holidays as you do prior to the holiday season, those customers behave drastically differently. On October 30, a consumer is likely to be purchasing for himself. Price is likely to be an issue. On November 1, he is likely to be purchasing for someone else, and price is less likely to matter. In addition to your usual customers, you are also guaranteed to draw new visitors -- and different types of visitors -- during the season. A site that receives a predominantly male customer base off-season will draw more women shoppers during the holiday as they seek gifts for the men in their lives. People who find your site too expensive the rest of the year may throw caution to the wind after Halloween. Then there are the different levels of urgency to consider -- how eager is a shopper in mid-July compared to a shopper on December 22?
- Flaw #2. "Visitors are visitors: they're the same throughout the holiday season." In the same way that customers behave differently pre-season and during the season, their behavior actually continues to change during the holiday season itself. Free shipping, for example, matters a lot in late November or early December. If a customer doesn't like your shipping options, they have time to go to another site. They have the leisure to choose ground shipping. But by December 18 or 19, those options have shrunk dramatically. Free shipping may not matter anymore; they just want the gift to get there, no matter what they have to pay. But at what exact date does free shipping cease to matter? Guessing doesn't work -- it will be different in different years, for different websites. Only by responding dynamically to changes in user behavior and by targeting appropriately, based on that behavior, can a marketer know he is getting the best return. There are a number of specific areas such as this that you can explore during the holidays in order to maximize your return. For example:
- Target your visitors by traffic source: Where are you advertising? What keywords are visitors using the most often? By hypothesizing about the various groups of people who come to your site, and then testing those hypotheses, you can identify groups of visitors that behave differently. Then you can begin to exploit those differences by offering targeted content.
- Target by visitor behavior: You might show returning visitors their last-viewed items or land them on the category page that they visited last. You might show new prospects the most relevant merchandise based on their search term. When a prospect shows an affinity for a certain product by clicking on it, you can offer a promotion for that product and then reinforce the promotion on every page from that first click until the close of the sale.
- Test promotions If targeting sounds like more than you're ready to take on for now -- if you haven't yet experimented with tactics that allow you to show different content to different visitors -- begin by planning to test and optimize promotions. For example, test the cut-off date at which free-shipping ceases to matter: Create content slots on the appropriate pages in which you place the free shipping offer. Show the bulk of your traffic the version with free shipping. But show a small portion of your visitors the pages on which the content slot does not include a free shipping offer. In early December, conversions will certainly be higher for those who receive the free shipping offer. But at some point, the free shipping conversions will begin to align with those who don't see the free shipping offer. At that time, you'll know that free shipping has ceased to matter and you can save your money -- or, test another promotion, such as a percentage off vs. a dollar amount off. (You can also test at what threshold a discount works best: on orders over $50? Orders over $75?)
Throw Caution to the Wind -- but Safely
I know of a major online company that does all of its testing and optimization during the holiday season. Now, marketers schooled online during the heyday of holiday lockdown will find that mindset to be just short of insanity. But in truth, it's the smartest thing a company can do. "It isn't the time of highest risk," company executives told me. "It's the highest period of opportunity."
Rather than setting up a rigid merchandising plan for this holiday season, devise a fluid and flexible testing and targeting plan. Choose a variety of areas to explore. Stop leaving money on the table and make it a game to see how much you can improve conversions. Optimize every penny of the increased revenue that the holidays bring, and enjoy your highest volume of holiday sales ever.