Jolly Holidays
Businesses gear up in the hope that shoppers soon will be there.
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With consumer economic sentiment reaching near decade lows, it's fair to say that retailers are anxious about the returns on the holiday season. Unfortunately, a miraculous December recovery seems unlikely, but the positive news is that time and money spent improving the online customer experience is likely to be well-rewarded as shoppers move more and more of their purchasing to the Web. Research firm comScore Networks predicts an online Christmas $3 billion richer than last year's. Blue Nile, an online jeweler, expects to account for roughly $28 million of that total. "There are still a lot of people out there looking to get engaged and looking at gift-giving, and our business is growing where other people's are shrinking," says CTO Darrell Cavens. To help ensure the company's Web operations are up to the task of making large sales to its predominantly male, often impulse-buyer customer base, Cavens put an October 15 deadline on major systems changes, ensuring that no last-minute introductions could compromise business as usual. Blue Nile also recently added a backup bandwidth provider in what was originally planned as a seasonal move, but which will become part of the standard operating budget. "The cost is minimal, so we have decided to go forward with it," Cavens says. Active-gear retailer REI went through a major overhaul to its IBM WebSphere e-commerce platform, which the company wanted in place to be able to offer faster searches and streamlined checkout in time for the holiday season. The Web site's business has sustained double-digit growth this year, says Joan Broughton, vice president of direct sales, and she expects that to follow into the Christmas season, helped along by an enhanced recommendations engine. Broadly speaking, e-tail outfits, regardless of whether they are pure-play or are connected to an established retailer, have done a solid job of lowering the barriers to shopping and of reassuring customers that they will get their gifts on time and on-budget, says comScore Vice President Michelle David Adams. "[Offering] free shipping with minimum purchases, we've definitely seen a lot of that this year," she says. Click-and-mortar outfits have made more strides to integrate the returns and fulfillment processes, with in-store pickup gaining in popularity. Now in its seventh Christmas season, REI.com has merged its branding and layout to look more like the store and catalog presentation. To make it more convenient for customers to order and receive catalog/Web-exclusive items, REI now offers in-store kiosks where those items can be purchased and picked up at the store, saving on residential delivery charges and hassle. Despite growing attention to cross-channel marketing and a depressed ad market, not all online players are looking to expand their reach to traditional media. Kristian Chronister, vice president of marketing for jewelry wholesaler Andin International and its jewelry.com retail portal, explains that reaching online buyers on the Web still makes a great deal of sense. "Some people might say you're approaching the lower-hanging fruit, but I'd say that you're reaching the audience that you know is already online," he says. "Last year I did a good number of magazine ads, but I have backed off for this year. I've elected to stick in the online arena, because the reduced cost gets my message out that much more." Blue Nile aggressively forwards negative customer feedback throughout the organization over the course of the year so improvements can be made before they become widespread problems. "It's ensuring that we don't have anything that will trip us up for the holidays and result in a flood of phone calls," Craven says. The numbers and the e-tail ramp-up don't indicate any sort of panic about the strength of the season. About the only thing that has analysts worried is the timing of Thanksgiving: Roughly two thirds of all online purchases are made from work; only the period between Monday, December 2, and Friday, December 20, provides buying opportunities for most online holiday shoppers. ComScore considers that a very short online buying season. Even with just 15 business days to work with, those responsible for closing deals are convinced they are holding up their end of the bargain. "Shopping online is a great convenience for customers, and we do better when we're able to provide faster performance, and make it easy and trustworthy for people to be able to order online," says REI's Broughton.
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