Guest Blog Contributer: Michele Romanow is a serial entrepreneur, board director, venture capitalist, a TV personality on Dragons' Den and has been recognized with several awards. She co-founded Clearbanc.com, SnapSaves (acquired by Groupon in June 2014) and buytopia.ca. She is currently a director for Vail Resorts, Freshii and SHAD Valley International. Clearbanc is an Authorize.Net partner. Authorize.Net merchants can accelerate their marketing plans to increase sales with easy access to Clearbanc’s Marketing Capital product. The partnership will begin in USA and Canada and will be rolled out internationally over time.
From Cyber Monday through to Christmas morning, consumers across the U.S. and beyond are in buying mode during the holiday season. It’s an easy enough trend to understand - year-end sales garner attention, gift-giving celebrations are in full force, and holiday bonuses pad disposable income. All in all, most ecommerce companies can expect a 50-100% bump in revenue between Black Friday and Christmas.
What’s the difference between a company that sees a smaller increase to one that doubles sales in November and December? Often, it comes down to planning. The top-performing ecommerce companies know what this critical time of year is all about, and are prepared to capture their share of the holiday rush.
With Americans poised to drop $720 billion on retail goods during this holiday season, every online retailer should be thinking about how to increase their cut of this market share. Here are three strategies that can impact how your business benefits from the holiday season.
Strategy #1: Be prepared for some serious holiday marketing.
For almost every ecommerce store, the holiday season brings the best return on investment for online ads. Gone are the budget-conscious browsers of the summer; in their place are holiday shoppers with a list of loved ones and a credit card at the ready. A few dollars worth of Facebook ads can be the difference between a shopper checking out from your store rather than a competitor.
Of course, maximizing your holiday advertising ROI requires some money to invest in ad spend. This is where it gets tough - many ecommerce vendors prepare for the holidays by upgrading websites and ordering inventory, leaving limited cash flow for advertising. Pausing digital ads for a few weeks while you catch up can seem tempting.
The problem? That pile of inventory won’t sell itself.
As a serial entrepreneur and investor, I’ve seen digital businesses approach holiday cash flow challenges in a few different ways. For example, bank loans could work for those who have preapproval, or you might have access to Venture Capital funding. However, these options often come at a cost: banks often need personal guarantees, investors require equity before writing a check, and funds from either source can take far too long to show up in your bank account.
After facing this challenge in my own companies and hearing the same story from hundreds of other entrepreneurs, I founded Clearbanc, a company specializing in flexible and entrepreneur-friendly financing options for any online company accepting payments through a processor such as Authorize.Net. Online businesses can apply for Clearbanc’s Marketing Capital product to access funding between $5,000 to $1 million per month, which our ecommerce customers use to ramp up their digital advertising during the holiday rush and any other periods of growth throughout the year. We created Clearbanc to offer a few advantages for business owners, including approval based on company revenue history (no personal credit check), the ability to fund the business in as quickly as one day, and a structure where you only repay as you earn revenue. This type of repayment system reduces risk and allows you to better manage cash flow.
Bottom line: November and December is a time to focus on what you can make by the end of the quarter, rather than stressing about working with limited resources. Take steps to access marketing capital before the season starts to avoid getting caught in a crunch. If there is ever a time to double down on digital ads, this is it.
Strategy #2: Sell a great gift, not just a great product.
One of the unique things about holiday shoppers is that they often aren’t shopping for themselves. While you may market your product directly to the recipient most of the year, gift-friendly messaging is in order for November and December. Discuss how the product is the “perfect gift” or “a great fit for the [niche] lover on your list.” Use images and video of smiling people receiving and using your products to show how happy your items will make the buyer’s loved ones.
The gift-centric user experience should continue as people click through to buy. For example, give buyers packaging options that help with their holiday experience. If you run a subscription box service, perhaps offer a mini box with a note that can be wrapped under the tree. If someone is shipping the gift to a loved one afar, offer a gift receipt and wrapping options. These little touches can make a big difference in your holiday sales.
Strategy #3: Make it easy to complete a purchase.
Have you ever tapped to buy something on your phone, only to be greeted by a glitchy checkout that will only work on a PC? Or left an online checkout halfway through the process because the website won’t accept your preferred payment option?
For ecommerce stores, the average shopping cart abandonment rate is almost 70 percent. While you can't avoid some of those lost buyers, a clean checkout can save quite a few. Here are some ways you can improve the system and increase closed sales:
- Keep it simple - requiring an account to check out can get in the way of a purchase, especially for buyers who are seeking a present for someone else;
- Make sure your payment system appears trustworthy - a security guarantee can go a long way for wary online customers;
- Use a checkout that accepts all payment options such as Authorize.Net;
- Consider not charging a fee for credit card purchases - it’s often not worth the lost sales.
How to keep sales up after the holiday bump
After the dust settles on the holiday season, most ecommerce companies expect sales to dip slightly. But should they go back to the pre-holiday rates? Not if you play your cards right.
Remember, everyone who purchases something from you during the holiday season thinks your product is worthy of gifting to a loved one (or buying for themselves during a busy time of year), so you’re already one step ahead. The email addresses and ad performance data from these holiday buyers can inform your campaigns in the new year, allowing you to turn one-time gift buyers into brand evangelists.
For example, you can send follow-up emails with promotions to holiday buyers throughout the year in accordance with local email regulations. Your holiday analytics can clarify the regions where sales are particularly high, allowing you to double down on advertising in those areas in future ad campaigns. You can even brand your best-selling holiday item as a gift throughout the year, capitalizing on its popularity for birthdays, weddings and other occasions. Holiday sales and marketing data can provide knowledge and ideas worth that can impact your growth throughout the year.
Remember, if you see a boost in holiday sales, that means many more people - gift buyers, recipients, and people present at holiday gatherings - now know about your product. The holiday season isn’t just about getting a two month revenue boost, it’s also about increasing your visibility and gaining valuable brand awareness that you can tap into throughout the year.