Digital River Provides Insight on Merchant Strategy for Holiday Season

The upcoming holiday season presents a fantastic opportunity for merchants to take advantage of the $10 billion plus spent by consumers this time of year.

By properly promoting and creating a certain buzz about your product, you put yourself in pole position to profit greatly from the hectic holiday shopping season.

One of the primary goals for merchants according to Digital River should be seeking long-term consumers by way of brand or product loyalty. The customer experience is beginning to take center stage, and merchants need to be cognizant of the importance of customer satisfaction in order to produce loyalty.

Payment Week had the opportunity to speak with Brad LaRock, the Vice President of Client Marketing at Digital River, the global commerce provider, to discuss the upcoming holiday shopping season:

Why is the holiday season such a potentially profitable time of year for online merchants?

According to Statista, U.S. holiday sales as a percentage of industry sales in 2014 amounted to 19.3 percent. In fact, the winter holiday season accounts for more sales than Mother’s Day, Father’s Day, Valentine’s Day, Halloween, Easter and St. Patrick’s Day combined. That’s one of the many reasons merchants take a deliberate and prescriptive approach to the holiday season – a season that marks a return to profitability for many retailers. In recent years, we’ve seen a major shift in consumers’ holiday shopping habits. Instead of shopping in brick-and-mortar stores, they are spending more time shopping online. Retail ecommerce sales in 2014 grew by 12.7 percent and represented $53.3 billion. This double digit growth demonstrates that more and more consumers are eager to avoid the crowds and long lines, and trade that in for the comfort of shopping from their own homes, coffee shops or anywhere they can connect.

Why is it so crucial for merchants to be up to speed on the latest trends regarding consumer tendencies?

Consumers are in the driver’s seat when it comes to ecommerce. Understanding and paying attention to detail is what consumers expect from brands. Brands that meet those expectations will win. But how can this be done and executed? The answer – use advanced analytics to optimize the approach. The more we understand online consumer behavior, the better we can predict what shoppers need – or in some cases don’t need. For example, with the help of analytics we’re able to predict which website visitors value live chat – and which ones don’t. That means we can manage the expense of offering the service where it’s not wanted and provide a service to end users who are looking for an incremental engagement to help them with any additional questions before they click the buy button.

A word of caution: it’s easy to get lost in all of the metrics and lose sight of how important the customers’ online shopping experience is. By looking at the data along with best practices, brands can gain a deeper understanding of the user’s experience, make meaningful improvements to the way they sell and better meet consumer expectations.

How necessary are mobile platforms for merchants? Especially during the holiday shopping season?

Optimizing the shopping experience for mobile users is indispensable. According to research from our partner Adobe, almost half of all traffic to U.S. e-tail sites now happens on smartphones or tablets. While nearly three out of four online purchases are still made from desktop computers, smart retailers are relying on responsive design to provide online retail experiences that work seamlessly across all platforms, screen sizes and devices — effective and continuous from smartphone to tablet to desktop and back again.

Are there any dramatic shifts in trends anticipated for the 2015 holiday season?

The single biggest shopping day in 2014 wasn’t Black Friday, of course—but it wasn’t Cyber Monday, either. Surprisingly, it was Nov. 11, when Chinese shoppers spent a staggering $9.3 billion on Singles Day. This new world record shows just how dramatically the holiday landscape is shifting. Beyond the significant local opportunity that’s at stake, holidays are now transcending international borders. We’re seeing traditionally Western holidays moving East – think Black Friday and Cyber Monday making a significant impact in the U.K. – and traditionally Eastern holidays moving West. Last year, U.S. merchants closely watched the results of the Singles Day in China and some even participated. This year, we expect to see may see even more participation from U.S. merchants on Nov. 11, capitalizing on the momentum of Singles Day.

Who are the “deal seekers” and how will merchants attempt to turn them into loyal returning customers?

Holiday shoppers are accustomed to merchants offering deep discounts – thus attracting the “deal seeking” consumers, the ones who are after the best deals and the deepest discounts. Under pressure from discounters and marketplaces, branded manufacturers—even those with strict pricing policies—are competing more aggressively on price, upping the overall value package and bringing it to their loyal shoppers earlier in the holiday season than ever before.

Once you’ve converted a customer with a spectacular holiday deal, how do you build a relationship that delivers rewarding lifetime value? Turning holiday bargain-seekers into loyal year-round customers is a challenge—especially online, where competition is fierce and attention is scarce. For smart branded manufacturers, building lasting relationships with customers is a matter of listening and learning. The most thoughtful merchants are listening not just through their own channels, but everywhere else shoppers are talking, including review sites, forums and social networks. And they learn by investing in analytics that let them understand and even anticipate their customers’ desires. Armed with these insights, brands can deliver a truly optimized and personalized online shopping experience that keeps consumers coming back for more.

How strong is the correlation between a good customer experience and a customer’s loyalty to a specific brand?

Good customer experiences are the currency of loyalty. When consumers encounter positive brand experiences, they are much more likely to come back for more and invest their time and dollars in that brand. To be sure, experiences that aren’t well cared for will undoubtedly result in a lost customer and risk potential negative social backlash. However, when companies invest to ensure a positive brand experience, consumers will repay with loyalty and some will amplify that brand via their connected networks – helping brands reach even further.