Holiday first look: Merchants brace for competitive season

If the first 2013 holiday forecasts are accurate, merchants are in for a tough but potentially rewarding battle. Overall retail sales growth is expected to be tepid, with store traffic measurement firm ShopperTrak predicting revenues will increase just 2.4%. That forecast is in line with the patchy results reported for the back-to-school season, which saw merchants using deep discounts to boost purchasing even as August sales fell short of estimates for leading mass merchants.

As with past years, eCommerce promises to be a bright spot, with eMarketer’s forecast predicting online sales growth of 15.1%.  Merchants themselves are bullish, with close to a third predicting eCommerce sales will grow more than 20%, according to a survey conducted by the E-Tailing Group and reported by eMarketer.

While these preliminary estimates tend to be highly speculative, when combined with the overall trend of a maturing eCommerce market and resulting increased competition for existing customers, the takeaway for merchants is that they must prepare to compete harder than ever for consumers’ attention and dollars this holiday season. As the final countdown to the season begins, merchants should fine-tune key components of their strategy to maximize potential sales. Among the last-minute to-dos:

Get your house in order when it comes to free shipping. Given that shipping discounts are highly sought after by consumers, nearly 49% of merchants report they’ll increase their free shipping offers this year compared with 2012, according to the eMarketer forecast. Free shipping with no threshold was by far the most successful promotion merchants offered in 2012.

That doesn’t mean merchants must join the crowds and offer unrestricted free shipping — but it does mean they need to offer shoppers alternative ways to keep shipping costs down and compensate for the lack of free shipping by spotlighting brand value — a central tenet of our year-long “” series. Merchants should take the time now to tweak promotions and content design to highlight these alternatives.

Win followers and subscribers now for repeat engagement opportunities later. Merchants should find ways now — before the holiday clamor has begun — to encourage shoppers to stay in touch with brands. They should position email signup invitations prominently and devise incentives for following brands on social media, such as MarketLive merchant Ulla Popken does with a double offer on its home page. Shoppers who follow the brand on Facebook are entered in a drawing for a $250 gift card, while clicks on links shared via social networks or email earn followers and the friends who do the clicking a 20% referral discount.

Tune in next Wednesday, October 9, at 10 a.m. PDT for a webinar covering the results of the MarketLive/E-Tailing Group pre-holiday consumer shopping survey. And stay tuned to the blog for further holiday forecasts, research and last-minute tips. Meantime, what are your top last-minute tweaks in advance of the season?