Tag Archives: q4

A Great Article on Prepping for the Holidays from Stores Magazine

27 Jul

Christmas (Buying) in

Christmas (Buying) in

From Jul 2011 | By Fred Minnick |

Preparing for those stocking-stuffing
consumers, e-commerce retailers are making holiday planning a top priority.

Holiday sales from November to December rose 5.7 percent (to
$462 billion) last year compared with 2009 — the largest seasonal percentage
increase since 2004, according to the NRF. These figures have retailers
wondering if they can improve results even more this year.

The holiday matters
Eric Best, co-founder and CEO of online tech firm Mercent, works
year-round with retailers to prepare for the holiday season. Mercent has built a
strong track record for improving e-commerce sales and expects to deliver its
typical results this coming holiday season.

What’s typical? Using Mercent Retail solution, which optimizes
paid search campaigns to drive sales for every SKU and merchandising offer,
Gardener’s Supply, headquartered in Burlington, Vt., increased return on
advertising spending (ROAS) 500 percent. Year-over-year sales for FootSmart, an
online retailer specializing in foot and lower body healthcare products,
increased more than 400 percent, with gross profits rising substantially. REI
used Mercent’s on-demand platform to automate and optimize the company’s data
feed marketing efforts, while SitStay.com’s sales on Amazon.com increased after using Mercent.

As these and other clients look at their holiday planning,
“They are becoming more risk-tolerant as they get more comfortable with
year-over-year growth, with a trend line that is now up and to the right,” Best
says. “That is giving the retail planners some level of comfort that they’re
going to have another successful year.”

Despite a solid January, 2011 started off slow, and some
retailers are looking for holiday sales to make up for soft early quarters
impacted by the Japanese earthquake and tsunami, a late holiday and bad

“We actually saw a steady decline in February and March,” Best
says. “Our clients were starting to feel a little jittery by the end of the
first quarter, just based on their year-over-year sales comparables.

“Part of that March softness, it turns out, was related to a
late Easter holiday,” he says. “January, February, March was decelerating
growth. April and May have been accelerating again, getting us back in May to
effectively where we expected we would be in terms of our forecast at the
beginning of the year.”

Best says the trends point to a positive holiday forecast – and
that forecasting itself is becoming more accurate. This allows companies to have
aggressive targets in terms of their space capacity as well as their staffing
expectations in the customer call center and the warehouses.

Some Mercent clients “are actually playing around with moving
some inventory over to Amazon’s warehouses in advance of the holiday, using
Amazon’s warehouses as contingent square footage,” Best says. “This allows them
to handle the peak holiday volumes without having to necessarily make permanent
infrastructure investments in warehouse space.”

Big holiday spend & buy
One of Mercent’s clients, a Midwest-based children’s product
retailer, is using 47 percent of its total 2011 ad spend in the fourth quarter
to capture holiday shoppers.

“The holiday is definitely one of our more exciting time
periods,” says a spokeswoman for the company. “We always see the greatest growth
during this time period and we get to showcase a higher amount of SKUs to
fulfill the demand.”

Her company’s 2010 holiday assortment was conservative, she
says, but “this year we have quadrupled our holiday gear and are thrilled about
that because we usually sell out rather quickly.”

In August, this retailer will create holiday search, display
and affiliate ads to hit around October. “The reason we start earlier is due to
our large product assortment push, as well as wanting to keep the same ‘voice’
prevalent throughout all our text ads,” the spokeswoman says.

On the buying side, children’s department store CookiesKids.com is planning holiday buys earlier
than ever, says founder Al Falack. Beginning in February, he says, the company
started importing goods directly from manufacturers.

“We also plan on sending a high percentage of our toys to be
fulfilled directly by Amazon.com,” Falack says. “Our primary goal is to complete
buying by June 25th, with deliveries no later than October 15th. We think that
if we could get a head start with receiving the inventory we will have more time
to focus on aggressively marketing and selling versus chasing

Amazon.com is the company’s biggest channel for the holiday
season. Therefore, “in addition to following and keeping up with trends in terms
of popular games and toys, it’s imperative we understand the mindset of Amazon
shoppers — how they discover, evaluate and ultimately purchase products,” he
says. “This impacts the way we market, promote and sell products through this

Possible holiday trends
There’s clearly a focus on the social influence for this year’s
holiday planning, Best says, with retailers paying particular attention to
Facebook and mobile shopping trends. “There are questions and a lot of
investment occurring in mobile shopping,” he says, “which, in some ways, has
potential to impact traditional bricks-and-mortar retailers even more than the
pure-play e-commerce companies, because you can tie in-store shopping behaviors
to digital information that you can syndicate on these devices.”

And holiday planning is no longer just a
domestic proposition; even for the smaller-scale retailers, there’s planning to
capture international markets. Firms like FiftyOne, which helps domestic
retailers with offshore fulfillment, have filled smaller retailers’ desire to
meet international demand.

Best says people are focused on Europe and Australia because of the exchange rate. “Some of it is
the fact that you have cheaper, higher capacity shipping options for actually
drop-shipping product overseas,” he says. “And some of it is that there are
software tools that are available that make it easier to do current [currency]
conversion and handle international fulfillment.”

Another 2011 shift is that consumers’ capriciousness is being
indulged through private sales sites like Rue La La, Gilt, Groupon and
LivingSocial. “[These sites] have implications for the holiday,” Best says. “We
saw it last year. From October [2010] to January, we had a big U-shaped curve
where December and January represented a spike. There’s always the peak selling
days of December 12 and 13, but in the aggregate the days following Christmas
and heading into early January actually contributed more volume overall than
those peak selling days.”

Best believes this new consumer behavior is a reflection of the
Groupon and LivingSocial deals.
“Consumers are doing exactly what retailers
are training them to do, which is to either take advantage of those early
door-buster discounts or wait until December 26 to take further advantage of
discounted pricing,” he says.

For retailers that have yet to complete their holiday planning,
Best recommends locking down promotional calendars while becoming more front-
and back-loaded than in years past.

“The overall holiday sales volume is going to occur around
Black Friday, Cyber Monday and post-Christmas,” Best says. “By August, you
should have variable capacity to be more responsive to last-minute opportunities
that are presented either through your advertising programs or through your
supply chain.

“You should be thinking about what happens if sales
significantly outpace or under-pace your expectations,” he says. In other words,
“What are your contingency plans?”


Want To Be a Toy Seller On Amazon?

14 Jul

With most of the country in a record heat wave, I know Q4 seems like it is a way off, but it is only 10 weeks away! I was speaking with a category manager at Amazon today about an unrelated matter and we started to talk about a RC airlplane I had just purchased off of Amazon and she reminded me about Amazon’s toy category cutoff. For those unfamiliar with Amazon’s holiday policy; all would be toy sellers on Amazon must have a sale processed before Oct 1. And knowing how long Amazon contracts and integrations can take, the time to get on that is now. If you have thoughts on doing CBA (checkout by Amazon) or FBA (fulfillment by Amazon..get those 2 extra selling days in!) then the time crunch is even greater!

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