Third-quarter results are in for the MarketLive Performance Index, and the data indicates that merchants are heading into the holiday season with strong growth potential — even as reaching new customers poses a real challenge.
Top-line revenue growth topped 13% on traffic growth of nearly 20%, signalling that shoppers flocked online through the autumn to take advantage of back-to-school and pre-holiday promotions. That strong traffic growth originated from an increase in direct visits to the Web site (e.g. from those who typed in the URL) and visits from email. Both of those marketing channels are typically associated with existing customers, or at least those already connected with the brand: typing in the URL suggests familiarity with the brand, and clicks from email are usually coming from those who’ve already subscribed to marketing messages.
Of couse, improvement in retention is good news. Returning customers currently are responsible for an outsized proportion of total eCommerce revenues: while repeat customers represent 40% of Web site visitors, they bring in 61% of total online sales, according to technology researcher Forrester. Heading into the peak holiday season, merchants should do their utmost to continue appealing to these valuable shoppers with personalized offers that reflect past browsing and buying behavior. (This topic is so important we’ll dedicate an entire holiday-themed post to it; stay tuned.)
But the Index data also suggested a more challenging trend for merchants for the holidays, with declines in traffic from social media and both paid and natural search. Since those sources are often considered acquisition channels for new shoppers, the Index results suggest that merchants may have an uphill battle when it comes to standing out from the crowd to win new business.
Any number of factors could be at play to drive down the incoming traffic from search and social — the difficulty of winning prime natural search results real estate, especially on smartphones; the steadily rising costs of paid search placements (including PLAs, or product listing ads), changes in Facebook’s news feed algorithm, and more. The sheer competitiveness of the marketplace is also a factor; according to our number-crunching, the top 10 merchants in Internet Retailer’s Top 500 account for more than 50% of total eCommerce sales, leaving the vast majority of the online marketplace to compete for their share of the remaining revenues.
This environment poses a special challenge during the holiday season, when over half of consumers are open to new brands and 41% actually purchase from a new brand, according to Google. To take advantage of that opportunity, and to buck the trend suggested by the Index data, merchants should consider circumventing “traditional” modes of winning referral traffic to engage shoppers effectively. Among the options:
In-social “conversion” opportunities. Whether or not merchants opt to experiment with the “buy” button now offered on social networks, they can offer visitors to their brand outposts more than scrolling status updates. By enabling consumers to connect with live chat, subscribe to email promotions, and even purchase gift cards without leaving the social environment, merchants avoid requiring a transition to the eCommerce site to engage more deeply with the brand.
MarketLive merchant Marc Jacobs Beauty invites visitors to its Facebook page to become “LoveMarc Member”s by signing up for email updates. Filling out the brief form results in a thank-you message displayed within Facebook that includes an instant offer code.
Visibility via online influencers. Merchants should actively seek out and court bloggers, haul video creators, and Instagrammers who have significant followings among the brand’s target audience, and participate actively in their communities. In doing so, merchants build visibility, credibility and interest in their brands, while also evaluating whether it’s worthwhile to approach content creators with paid placement or partnership offers.
Amped-up referrals. To boost the already-considerable power of word-of-mouth recommendations, merchants should follow the example of flash sale sites, Amazon Prime, and other cutting-edge sellers to incentivize referrals with cold, hard cash. Formalized referral programs that earn benefits for the referrer as well as discounts for the new customer both introduce the brand to potential new customers and invite repeat business.
MarketLive merchant Cost Plus World Market offers $10 off to referrers whose friends go on to make a purchase, and those customers receive $10 off a $50 purchase. The simple sign-up form requires only a name and email address and offers shoppers the means to invite friends via social media, email, or using a direct link.
Download the full Performance Index report for more data, including results by industry, and read the official press release for further details. Stay tuned for further holiday advice and results throughout the season — and meantime, let us know: what techniques have been successful in earning new holiday business?