Coupon Hoopla

You’ve been there. You’re at the grocery store to buy one single item. You have your groceries on the counter, your cash in your hand. But the person in front of you has a never-ending stash of coupons. The cashier enters in code after code. You start looking for an open clerk, cursing the customer ahead of you.

Well, coupons aren’t nearly as annoying online. Frugal shoppers can save money in the privacy of their own homes, redeeming as many coupons as their hearts desire. And it doesn’t slow other shoppers down one bit. Everyone wins. Especially people like Mike Allen.

Allen not only has an eye for a bargain, he loves to offer good deals to others. “I saw that coupon codes sure could save you a lot of money,” says Allen, who speaks in a slow, soft Southern accent. “But they sure are hard to find.” That’s why he decided five years ago to devote an entire Web site to online coupons. Shopping-Bargains.com features 500-plus merchants.

Coupon sites say their revenue varies widely month to month, but some gross more than $10,000 a month and the ones contacted by Revenue say they’re expecting a whopper of a holiday season. EdealsEtc says months in the fourth quarter sometimes result in six-figure revenue.

“Q4 is always good for us,” agrees Joel Comm, who runs DealOfDay.com. “But 2004 is gonna be the best year for coupons so far.”

The uncertain economic outlook combined with a long-running trend toward value shopping has created vast opportunities for affiliates to promote sales by providing coupons to people who just can’t live without them. In 2002, according to Forrester Research, consumers downloaded 242 million grocery coupons, coupons they print out and take to brick-and-mortar stores. That’s almost one coupon per American, and that’s just for groceries.

A raft of online coupon sites exist. Large sites like CoolSavings and CouponCart.com let you print coupons to redeem in offline stores. Others like FatWallet, UPromise, Spree.com, eBates and KeyCode offer cash-back incentives or rewards to shoppers. If a merchant gives an affiliate, say, a 5 percent commission, the affiliates might pass on 2 percent of that to their customers.

But even the sites that offer savings on online purchases range from small niche hobby sites to larger companies like CouponMountain, which employs eight people in Los Angeles, has 750 merchant partners and does a lot of marketing. And with about two-thirds of the US households now online, there’s still plenty of room for affiliates who can build a site that rises above the crowd.

Adam Schwartz and Craig Nelson were eating sushi in San Francisco and saw an ad on the window that read: “See our coupon on the Internet!” They thought online coupons were a great idea and started CouponSurfer in September 1998.

Brad Wilson started DealsDuJour.com with his brother Campbell in 2001. The 20-something brothers bought things, mostly electronic gadgets, online and when they scouted a good deal, they told their family and friends about it. Their hobby started as a pastime, soon blossomed into an email newsletter and then later became a business.

How many sites are devoted to online coupons? A lot. DealzConnection tries to list destinations for online bargain hunters. It lists 42 with forums, 41 that have price comparisons and 232 other bargain sites, plus 104 dead sites (not all coupon sites survive).

Site Design

As in many other areas of affiliate marketing, design is critical. Having a home page that is fresh every day is a great start. The best coupon sites list the deals in a variety of ways so that consumers can easily find what they want.

Many have current deals ranked and listed by popularity. New coupons occupy their own space; expiring coupons are placed somewhere else, so users can find deals before they’re no longer valid.

Many sites let you search alphabetically by merchant to find the store you prefer. And most have a category breakdown, so you can scan that to find a coupon for a gift for your Aunt Hilda’s birthday, whether you are looking to get her a karaoke system or a trip out of town.

Affiliates need to think more about aesthetics and the user experience. “Sites aren’t making it appealing and clean and idiot-proof,” says Wilson. “I sit my mom down. She is absolutely useless online. I see if she can make it through the user interface and if she can navigate, then we go with it.”

“A simple interface that has agreeable color schemes is important,” agrees Travis Bowman, president of EDealsEtc.com. “You also need to optimize for speed and test for speed and multi-browser compatibility. A good logo is also critical.”

But design and navigation aren’t the only considerations. Deals are ever-changing, and keeping up in the coupon biz definitely isn’t for the faint of heart.

Update Your Deals

“You cannot neglect it for one minute. You have to be on top of it,” warns New Yorker Abe Rapaport of JumpOnDeals .com “There are merchants whose coupons are expiring. Others are putting new deals out there. Customers contact us with their concerns. We have to keep up with all of them.”

Keeping up and using legitimate coupons is a full-time job. There’s nothing more frustrating to consumers than taking the time to pursue an offer that already expired. Burn your customers, and you’ll burn yourself.

“You need to link deals into a searchable database,” offers DealOfDay’s Comm.

Shopping-Bargains.com’s Allen and his wife revamped their site and hired ColdFusion programmers to help make the static site dynamic with a database that automatically schedules coupons to expire. Since they relaunched in January, keeping the site updated has been “dramatically easier,” says Allen.

“Users expect accurate and current deals,” says Allen. “They want a comprehensive listing. It’s very hard work to keep merchants happy and users happy.”

But once you have a site that is designed well and is updated regularly, you’re ready to tell people about it.

Marketing Moxie

Sites that focus on online deals must do a lot to separate themselves from the pack. Wilson says his goal is to give consumers the better things in life at a better price. The company’s motto: “Shop smart, live rich.” Wilson says it still takes a lot of work to get attention.

“Paid search can work but you really need the right metrics,” says Wilson. “Search engine optimization is incredibly competitive but it’s always worth the effort.”

Many of the affiliates contacted by Revenue simply love search engine optimization. Tagging pages properly isn’t easy, and getting someone with expertise to help can be expensive. Bidding keywords and buying PPC advertising – Google has a 5 cent cost-per-click minimum; Overture has a 10 cent minimum – are also tested tactics. But they aren’t for everyone.

“Keyword placement is too expensive for this niche,” argues Comm. Instead, he’s syndicating content. That way, his site gets double the exposure, and search engines are twice as likely to pick up his pages.

A few sites like PhatDeal.com and eDealsEtc.com say they are even considering buying offline advertising -newspaper ads, billboards or radio time in their local markets to attract traffic, a tactic described in Issue 3 of Revenue (Beyond Search Engines).

The smart coupon sites also let you sign up for an opt-in newsletter that gives shoppers links to popular deals, turning first-time visitors into repeat buyers. And many use “Tell a Friend,” which lets users click on a link and do the viral marketing for them.

“The best is when an affiliate manager recommends us to other merchants,” says Bowman. “Word of mouth works for consumers as well as retailers.”

A few sites have added email notification systems that help convert browsers into customers. Bedford, Mass.-based CouponSurfer.com has set up a “Coupon Butler” service that informs users when a particular product they are interested in is available at a discount. Such newsletters and notices help.

But the best means of attaining visibility? Word of mouth. “The goal is for people to have an easy experience, become repeat visitors, sign up for emails and tell their friends and family about us,” says Wilson. “One of these visitors is worth five of the other kind.”

Everyone loves loyal customers. That’s why many sites encourage visitors to click a link to bookmark their sites as a favorite, sign up for an opt-in newsletter and tell a friend.

DealsDuJour.com recently received the Titanium award at the LinkShare awards ceremony, which Wilson says has helped it to garner a lot of positive attention. Mentions in the press don’t hurt either. Dan Baxter founded DealCatcher.com, which gets 3 million page views per month and promotes more than 500 merchants. He says appearances in the The Wall Street Journal, PCWorld and USA Today have been boons to his business.

But even if you get the best media attention and the greatest industry awards, you are still going to have to work hard. Your challenge is to get people interested and coming back. Content is important, too.

“You have to save your members either time or money or both time and money,” says CouponSurfer’s Schwartz. “You have to offer them value.”

Thinking about your audience is the key to success in the discount game. Luckily, online retailers are always trying to invent and offer new promotions. DealsDuJour.com’s Wilson has witnessed an increase in merchants in 2004 getting their holiday marketing plans in place earlier this year.

Work With Merchants

“I’ve been impressed. Merchants were already concerned in July about Q4,” says Wilson. “The usual suspects think ahead. Overstock.com and those guys are really focused on affiliate channels.” Then again, Overstock.com has 10 people focused on affiliates (see story page 40). But other merchants would be wise to think about offering discounts and disseminating deals.

“Merchants mistakenly think people will buy no matter what,” says Rapaport. “But if you aren’t offering deals, your competitor is. So you really need to offer coupons to people.” Rapaport suggests giving visitors a variety of coupons from which to choose – whether it’s a dollar amount off, a percentage off or free shipping. “Test and see which codes do better,” he says.

So what sorts of deals perform the best for merchants? Rapaport thinks free shipping offers are better than no special offer at all, and JupiterMedia’s Patty Evans hails them as a great deal to offer, especially this time of year.

“Free shipping is the master plan. It is consumers’ top concern; they react to it better than other discounts, even if they aren’t saving as much as they could with different offer,” says Evans. “It’s tangible and definitely priority around the holidays.”

Work Around The Clock

“It’s a juggling act,” says Joel Comm of DealOfDay.com. “It’s nearly impossible to keep up with all the offers. There are so many merchants and there’s so much competition.”

Maintaining a coupon site is so much work that Mike Allen realized last year he needed to make a choice between his job as a marketer and his job as a governmental training specialist at Mississippi State University. So he quit his university job and devoted himself full time to being an affiliate this year. Because he has four kids at home, he had to rent office space. “It’s too noisy at home,” he laughs.

And the business has ups and downs. Online savings affiliate sites see their business fluctuate with retail cycles. It’s not predictable income, and you have to be prepared to work when the shopping fevers strike.

“This is the hardest easy money you’ll ever make,” says Allen. “It’s only easy because you aren’t sweating.”

Keep in mind if you want to dance in the discount disco, you better be ready to work your tail off. There’s no break in this business. Says Rapaport: “We will be here on Christmas and the day after doing the after-holiday sales.”

DIANE ANDERSON is managing editor of Revenue.

Affliates Wanted

With 8.2 million Americans looking for jobs, Jeff Testerman isn’t worried about losing his. He’s co-founder of brokerhunter.com, a job site for the insurance and securities industries that features affiliate links to everything from resume writing to trade journals.

“Hiring started to pick back up in the last quarter. ” Hiring is definitely in the forefront now and in the future,” Testerman says with confidence, and he may be right. Analysts predict the first quarter of 2005 will be the best time for job-related Web sites, with some predicting growth of up to 15 percent.

Jupiter Research found that online job postings accounted for $923 million in revenue in 2003, and it expects revenue will climb to $1.1 billion for 2004. And a wide variety of job sites are offering affiliate programs, including the big three: Monster, CareerBuilder and HotJobs.

In the struggle to be No. 1, both CareerBuilder and HotJobs are revamping their affiliate programs, adding new benefits and promotions for affiliates to drive traffic their way instead. It’s a good move, considering the underlying level of power that affiliates – a virtual salesforce of thousands – can have on a company’s bottom line. To compete, less recognized sites are strengthening the additional services they provide to job seekers, most of which offer additional commissions back to affiliates.

Beneath it all, a new type of online job search strategy is emerging. A few sites are offering all-in-one service: Job seekers post their resumes there, and the site will use its advanced technology to almost instantly repost the resumes, in correct format, to every related job site, corporate recruiting site or job board out there. Consequently, it’s never been a better time to be a job-search-site affiliate.

“I’ve seen our network grow from 60 partners in February 2000 to more than 1,500 Web sites that drive traffic through Commission Junction (CJ) and another 400 integrated partners that we have today,” says Amado Izaguirre, CareerBuilder’s vice president of affiliate partners. Some of those 1,500, he said, are making more than $10,000 per month. “We have created an environment on CareerBuilder .com and all our affiliate sites that encourage users to search for jobs and apply online without having to register on the site or deposit a resume into a database,” Izaguirre says. “We want users to concentrate on finding the best jobs. In turn, our affiliates benefit because CareerBuilder users are encouraged to perform the activities that they are compensated on.”

Through CJ, CareerBuilder pays 50 cents on applications rather than resumes; job seekers can send as many applications, for free, as they like. Affiliates are paid $1 for job alert sign-ups, $50 for one job posting and $175 for four. They can also post any article the company owns, like ones on writing great resumes, top interview mistakes, coping with a bad boss, starting a job search or managing your career. CareerBuilder also occasionally runs special affiliate promotions.

HotJobs, meanwhile, has seen double-digit percentage increases in resume postings each year. “I think we’re going to be the big one when the dust settles, because we’re the only one that is wholly owned by one of the biggest brands in the country and one of the leaders in search,” says Marc Karasu, HotJobs’ vice president of marketing. Its new union with Yahoo gives it a big leg up in the name recognition department: HotJobs is featured in an “Inside Yahoo” box above the paid listings on a job-related Yahoo search.

Ads Trumped

HotJobs is also doing a lot of conventional advertising these days: from TV ads to billboards. In September it launched a two-season co-branding campaign with The Apprentice, the hit career television show featuring Donald Trump. Applications and behind-the-scenes footage can be found at the HotJobs site, and fired contestants get into a HotJobs-branded cab at the end of each episode. Cabs sporting HotJobs toppers have also rolled into service in eight urban areas: New York, Miami, Washington, Boston, LA, San Francisco, Atlanta and Philadelphia.

“We’re thinking of ways to pull parts of our affiliate program into The Apprentice promotion,” Karasu says. HotJobs pays $1 for resume postings and pays $50 for employer job postings. It’s now focusing on building strategic affiliate relationships with sites that are focused on health care, information technology and human resources.

Despite losing its planned purchase of HotJobs to Yahoo, Monster.com has retained the top position among job search sites. It offers worldwide job search capabilities, centered around Asia/Pacific, Europe and North America, and boasts more than 490 of the Fortune 500 companies as clients. Of the big three, Monster.com has the most commissionable items. It pays $50 for job postings, $1 for resume postings, 70 cents for Monster Networking Accounts and $15 for Networking VIP membership, all through CJ.

Then there are those sites that aren’t yet a household name but provide solid services and have good affiliate programs. There’s FlipDog (encroaching on the big three), SoloGig, Brass Ring, Jobvertise, Job.com, Vault, Freelance Work Exchange, The Ad Net, Employment911 and many others with products and commissions across the board. FlipDog, which searches corporate sites and claims it has “five times more employers each week than other job sources do in a year,” pays 50 cents only for visitors creating a FlipDog.com membership.

Jobvertise.com, on the other hand, focuses on employer listings. “Turn your Web site into an instant community jobs board and charge others to post jobs to it!” it pushes on its site. “Anyone browsing your Web site can enter job and credit card information for instant authorization – the jobs are automatically posted on your Web site.” Affiliates decide how much they will charge users. Jobvertise handles the entire transaction and, once total commissions top $50, cuts quarterly checks for 50 percent of the total revenue.

Employment911 has perhaps the widest selection of commissionable career-related services. It started as a small, 5,000-circulation magazine for employers in 1997 and moved to the Web later that year. Today it’s still a homespun site, but its internal software gives Employment911 the searching and resume posting capability to make it one of the largest job posting networks online, pooling from 7,000 employer Web sites and employer-industry-specific news groups. So, although it’s not a Monster, it does provide strong services for job seekers and employers. Affiliates are paid between 12.5 and 25 percent, based on volume, for job seekers buying its resume writing services, resume distribution service or resume blasting tool. They also receive a payment per job posting and 25 to 50 cents per resume posting lead. “Web people are earning substantial revenues just by promoting our resume posting,” says owner Jake Fannin. Employment911 also has free job search articles for posting and an HTML job search box that can be put right on an affiliate’s site. Searches not only cover Employment911, but also 21 other sites, including the big three.

“Anyone who has a small amount of traffic, of any type of targeted market, should receive at least $100,” Fannin says. Employment911 has 5,000 affiliates and counting. Its top affiliates have earned more than $5,000 a month, and up to $9,000. “Those are people that have a real targeted audience, they have prominent links or they’re in a co-branded relationship with us.” Employment911 affiliate BrokerHunter.com, for instance, generally pulls 30 cents or more per click.

Job Securities

Recently voted by TopJobSite.com as the No. 1 securities industry job site in the US, BrokerHunter.com runs its own insurance and security industry job list with 40,000 job seekers and a couple of thousand job postings from security and insurance companies all over the US. Its affiliate income then, comes from auxiliary services, like Employment911’s resume writing. It promotes resume writing in a banner at the bottom of its home page, and includes a pitch for the service in its monthly newsletter to 70,000 insurance industry job seekers (its 40,000 members plus 30,000 more that have come to the site and opted in). “The services go hand in hand,” says Testerman, from BrokerHunter. “We’re such a niche job board, that it’s really of benefit to the job seekers out there. Being able to put their skills effectively in a resume is why this is such a good fit.”

There’s also the new breed of job search sites that don’t post jobs at all. Instead, they send users’ resumes to the sites that do. “ResumeRabbit will post your resume to over 100 job boards,” says Lee Marc, president of ResumeRabbit parent company eDirect Publishing. “If you’re looking for a job, you probably should put your resume on Monster.com, HotJobs, CareerBuilder and a hundred other Web sites that employers and recruiters search every day to find candidates. What ResumeRabbit does is one-stop resume posting to 100 career sites.” ResumeRabbit.com pays $20 for every order.

What sites benefit most from this type of service? “Clearly sites that are catering to job seekers are a natural fit,” Marc says. “However, we find that there are a lot of sites on a variety of topics that seem to promote ResumeRabbit solely because there are a lot of people in the world that are looking for a job or are unhappy with their current one.” It’s posted more than 1 million resumes for more than 100,000 time-crunched job seekers since 1999. “And they’re all real happy,” Marc says. Interested in email or longer copy? Just ask for it. ResumeRabbit has 3,000 affiliates through CJ, and consistently ranks in the top three for CJ’s career category commission in terms of revenue per click.

Insiders say that it’s fairly easy to make the most of job site affiliate programs. After all, nearly everyone who visits any Web site is a potential user. CareerBuilder’s stats show that 2 percent of a site’s front door traffic will engage in some sort of career activity, if it’s offered and if the banner is at “the top of the fold.” “Above the fold” was once a newspaper-only term, describing the part of the first page that’s seen at newsstands. It now holds true online as well. If you want conversions, make the job search option one of the first things site visitors see. HotJobs even suggests an L rack or “monster-sized” banner.

Productive affiliates send confirmation emails to job seekers, outlining merchant offerings they may have missed at the site. And they have a dedicated following of visitors loyal to their cause, employment related or not. “The more niche you can carve out for yourself, the more successful you become,” Testerman says. The best sites are industry-specific sites, focused on nursing, accounting, IT or any variety of professional topics. Those easily convert, say insiders, with just the addition of a “Career” page with an article on finding careers in that profession and a link to a tracking merchant site. But even general sites can tap into the 2 percent conversions by adding a career section.

When it comes to creatives in this industry, “banners alone don’t work,” Fannin says. Instead, draw users in with articles provided by merchants or job seeker testimonials, and convert using text links. “This provides content for search engine optimization and provides the best possible method for sales and conversion rates,” Fannin says. Affiliates who do the best take the time to study their merchant’s sites to really understand the product – it doesn’t take much time – and find a way to describe it in their own words for their own audience.

While many people are looking for jobs around the country, many people are also looking for a job around the block. Research from Belden Associates found that 65 percent of job seekers check their local newspaper sites, while only 55 percent hit Monster.com. Hence, the industry is responding by “going local.” Yahoo’s new Local product, in beta testing, will roll out HotJobs postings specific to a city or region. Other programs are expected to follow.

The online market for job-related services is going strong, and some would say it’s booming. Merchants and affiliates are starting to think long term. Rather than focusing solely on short-term metrics such as clickthroughs, registrations and purchases, they’re tracking long-term metrics such as predictive behavior, referrals and branding. This should play out as increased traffic and better conversions for affiliates. In the interim, the big three – Monster, HotJobs, CareerBuilder – will continue to fight it out to be the biggest job site out there. With Yahoo’s HotJobs scooping up top search engine placements, one might ask if there will be room for new entrants. “There is absolutely room for new entrants,” says Karasu at HotJobs, which doesn’t prohibit its affiliates from buying search words in its category.

And analysts predict further consolidation among the second-tier sites. “In the meantime,” says Fannin at Employment911, “we’ll just continue to try to produce good results.” It’s a motto echoed throughout the burgeoning online job search market, and one that will serve affiliates well.

JENNIFER MEACHAM is a freelance writer who has worked for The Seattle Times, The Columbian, Vancouver Business Journal and Emerging Business magazine. She lives in Portland, Ore.

E-Tailing Wrap-Up

SIX WEEKS. That’s all it takes for many merchants to make or break the retail year. From the day after Thanksgiving – Black Friday – to the Friday after Dec. 31, the holiday rush generates a major part of year-round sales. That translated to $135 billion in gift sales last Christmas, according to the US Department of Labor. An estimated 8 percent of those sales occurred online, leaving affiliates with a superb opportunity to give themselves a nice little holiday bonus.

Take toy and apparel affiliate SchoolPop.com. "The gift buying season has a significant impact on our sales," says Mary Beth Padian, the site’s vice president of merchant development. "Toy merchants are in our top 50 merchants throughout the year. Every fourth quarter – especially with Disney and eToys – they are in our top 10."

SchoolPop is a donation site that encourages buyers by promising to return a portion of each commission to a school or nonprofit of the buyer’s choice. Yet even it doesn’t rely on feel-good power alone when it comes to cashing in on the holidays. This year, it’s publishing a holiday edition of its new triannual magazine, distributed to 1 million parents through partner schools. "Our editor is writing an article about the hot toys and gadgets for the holiday season, and she’s talking to merchants to get a sense of what is really going to be hot this year," Padian says. "The product impact, especially when it’s contextual like that, should show us a significant lift in our sales over last year." Of course, holiday sales aren’t reserved for toys. Electronics, apparel, music, movies, books, airline tickets and collectibles are all huge holiday categories, often offering deep discounts to help promote holiday sales. For example, top affiliates for Ross-Simons, which promotes itself as selling "life’s luxuries for less," saw their sales double during last year’s holiday season and the company is hoping for a similar experience this year, said affiliate manager Felicia Lesnett. To encourage affiliates, Ross-Simons offers commissions of up to 10 percent for top affiliates during the holiday season – that’s double the program’s base commission during the rest of the year. Affiliate sales make up about 20 percent of the company’s total online revenue.

Just two years ago, the Internet was still viewed as a relatively high risk channel for Christmas shopping. Who can forget the horrors of Christmas past when sites crashed, orders weren’t processed and Santa missed the big day? The cybermalls have gained a lot of respect since then, according to Patrick Gates, AOL’s senior vice president for e-commerce. "We are finally seeing a true shift from offline to online," he says. "The pie isn’t getting bigger; people are shifting share."

ComScore Networks estimated online sales increased 35 percent to $18.6 billion in 2003, up from $13.8 billion in 2002. Sixty-four percent, or $12 billion, of that was made between Nov. 1 and Dec. 23. "November and December are humongous, humongous months for us," said Jennifer Willis at ShopForChange.org, the affiliate sales site for Working Assets. For the past few years, it has promoted its seasonal clothing – things like books through Powells.com and apparel through LandsEnd.com, of which half of the affiliate commissions go to nonprofit causes – through a holiday newsletter. The newsletter is stocked with listings for merchants, descriptions of promotions, free shipping options and a reminder to shop there first. This year, even without a newsletter, its now-established reputation as a site for gifting means that if people need to do holiday shopping "they sort of know to click over to us at ShopForChange," Willis says.

Certainly, Internet shopping is cutting into department store sales thanks to such features as convenience, wrapping and shipping. But the online market itself is also shifting. Home entertainment and travel are heating up while apparel and toys are losing share. Gift cards, offered by nearly every major merchant, are a dominant trend. Now that merchants have seen the strong improvement to their bottom lines as a result of gift cards, the push is on for holiday 2004. But watch out: Some merchants offer little or no commission on gift card sales.

"Gift cards were a $20 billion business last holiday," says Lauren Freedman, president of The E-tailing Group in Chicago. "No one returns a gift card." And when you sell these, chargebacks can become a thing of the past. You can increase dollar amounts on card sales by pushing specific cards for specific uses, such as an entire January back-to-school wardrobe from Old Navy or a complete computer system from Office Depot. You can also promote gift cards as "the perfect gift for the undecided."

The Humbug Factor

Although the 2004 gift buying season looks strong, sales may still be affected by the economic outlook. When times are tight, so are wallets. That’s why comparison sites are predicted to be the biggest winners during the 2004 holiday season. Affiliate Ben Chui predicts sales through his comparison shopping site BensBargains.net will be "huge" in November and December because of his reputation as a bargain hunter. "I find the best price on any particular day on numerous products, and that resonates well with people right now," Chui says. "If you go into a store and everything there is the cheapest you’ve ever seen it, I guarantee you they will be coming back." He doesn’t have a newsletter, doesn’t send out emails and doesn’t pay for search engine placement. His firsttime visitor traffic is driven by natural search, message boards and word of mouth. The rest comes from people that have his site bookmarked. Yet he’s still able to pull in an excellent income from the work he does finding promotions and searching for best prices by hand, without the aid of software. Although he holds a master’s degree from Berkeley, he’s now "doing this full time."

Even with the uncertain economy, the number of first-time shoppers on the Internet continues to grow with the richest households expected to register the largest increases in holiday expenditures. "Here we’ve got, now more than ever, more people familiar with how to buy online and more ways of doing it than ever," says Carol Baroudi, an analyst at Baroudi Bloor International in Arlington, Mass. "More and more people see less and less reason to go to the mall in a crunch."

The way to a holiday shopper’s heart is in the details. Holiday Retail Strategies 2004 from Packaged Facts, a publishing division of MarketResearch.com, concludes the things that will help e-tailers are: unique products, wide variety, a strong reputation, a holiday atmosphere and a consumer confidence in their ability to take orders securely and ship them in time for the holiday.

Shopping For Shoppers

Of course, getting people to your site takes work, but try the five key strategies suggested by Packaged Facts. Differentiating your site can be done through links or landing pages specifically for your audience. "We help people find science fiction and fantasy books that are hidden in plain sight on the merchant’s site because they don’t know how to get there," says Olivier Travers, owner of Portugal-based SciFan.com. December is SciFan.com’s peak selling month. "We spend a lot of time hunting for books in a series, and finding the reading order. That’s information you hardly find anywhere. It’s very important for us not to just be another price and comparison tool, because we think you can find that in other places. What we want to do is provide some context on the books that you can’t find in other places." This brings up another differentiation strategy: offering products not readily found elsewhere. Your site could either be the only one with a hot toy, for instance, or the only one that still has it. "A lot of times what happens is shoppers buy the hot product early, and it starts to sell out," Freedman says. "When it gets down to Christmas, you could be the little guy that has it."

Try to develop a decidedly holiday atmosphere. Change site background colors or selected text to red and green, or apply other holiday color themes like white and silver or gold. Create a catchy gift-oriented phrase to use on the home page and all email/newsletter promotions for the holidays. Add themed art such as wrapped gifts, big red bows or evergreen foliage. Place decidedly holiday merchandise on the home page, and replace year-round merchant banners with new ones that focus on the holiday theme. World-Luxury.com is one affiliate that has seen better sales after adding holiday products and services to its home page, ranging from ornaments to Christmas teddy bears. "I start to feature newly released, especially limited edition [holiday] items on my home page as soon as they become available," says Marilyn Olsen, publisher of World- Luxury.com, American-Luxury.com and French-Luxury.com. "Last year I started in September and had good sell-through immediately, particularly in the smalledition, hand-crafted items." Olsen uses product photos provided as affiliate creatives at Gumps.com and Macys.com, which also takes the holiday theme one step further for its affiliates. "Our whole site will have a holiday theme, with gifts being the main focus," says Alison Zemny, Macys.com’s director of marketing. "We’re known for our in-store Holiday Lane, hundreds of different trees decorated in different themes. This year, we’re taking that online, with holiday dinnerware and servingware, ornaments, decorations and home décor – even more selection than we have in the stores."

Increase selection beyond one product category. In books, add upsell items like bookmarks and reading lights. In apparel, offer ideas for ensembles down to jewelry and shoes. In home, offer complete holiday table settings from napkin rings to centerpieces. In electronics, cater to every age group on the gift list. Macys.com took this suggestion. This holiday season it has added several new merchandise categories, many not found in its stores, including MP3 players, TiVos, DVD players, a wide selection of children’s apparel, toys and gourmet food gift baskets. "What we will be working on with affiliates is some sort of special holiday gift promotion for them that focuses on our holiday gift assortment," Zemny said.

Lesnett, the AM for Ross-Simons, says her top affiliates smartly position her links in multiple categories, which makes sense because the company sells a wide range of gift ideas ranging from tableware to jewelry. "A lot of times, opportunity is missed because affiliates think you’re only in one particular category. So we’re looking at where we’re placed on their sites and we’re trying to optimize their sales, and our sales," she says.

Build consumer confidence. How do you get it? The merchants you work with will obviously need to use a secure server for the credit card process. They’ll also want to have a posted shipping policy and a reputation for shipping on time. You can check out how consumers have rated shopping sites at Shopping.com’s Epinions section or BizRate.com’s "Store Ratings" search drop-down option. "Merchant ratings can really be a factor," Freedman says, noting that if there’s "a product that’s $50 cheaper, but from a site that’s rated only one star, then consumers don’t want to chance it."

Consumer confidence also comes from having a site that’s easily navigated and quick to respond, with merchants who offer the same. "We have to pay more attention to the behavior of a site at peak; if people get frustrated, they leave," said retail analyst Baroudi. "Seconds count in terms of transactional fortitude." Make sure the site is optimized and graphics are at the lowest DPI or the most effective resolution. Mitigate extremely heavy traffic by bringing functions closer to the user with intelligent routing software such as Akamai’s EdgePlatform, or by allowing seasonal capacity with on demand infrastructure from providers like IBM or DEA. "This is the season that makes or breaks," Baroudi says. "If you can’t handle the peak load in season, you may as well not bother."

Another factor to consumer confidence is guaranteed pre-Christmas delivery. Macys.com, for instance, guarantees Christmas delivery if ordered by midnight Dec. 21. "We’ve worked very hard with our fulfillment centers so that the customers can order up to the last minute," Zemny says. Consider posting holiday shipping cutoff points by your merchant links, then capitalize on late buyers by posting which sites offer express shipping. Consumers will be looking for that.

Customers also use a slew of other factors to judge whether they’ll shop your site or your merchants’ sites for gifts. These factors are product availability, gift wrapping, good return policies, Web research, informational pieces, whether or not they get help with gifting ideas and shipping options. One e-tailing study found only 30 percent of gifting merchants offer gift wrap or boxing.

"Make your suggestions, merchandise by price point and recipient type and have an aggregated gift center on the site, so there is one specific location for gifting," Freedman says. "Then it gets down to things like gift cards and gift wrap, but that really depends on the merchant."

Establish your site as a destination for gifting. Gap.com did that with its 2003 theme: "Get it. Give it. Gap." Barring a snappy slogan, there are a number of ways that affiliates can effectively lure gift buyers. The biggest producers use "gift idea" newsletters, gift suggestion pages on the site and the purchase of gift-oriented keywords in major search engines. Eighty percent of the gifting merchants in a recent E-tailing Group study already had gift centers and provide gift suggestions. This year, even sites like SciFan.com may take advantage of this feature.

It’s considering the addition of an online "gift list" of science fiction books site regulars could buy to introduce their children to the genre. It also helps to affiliate yourself with sites already known for their gifts. Affiliates for The Sharper Image, a quintessential gift buying destination, "tend to give us premium placement during the holiday because it pays off," says Roger Benton, its senior vice president of marketing. "And because we have an eclectic assortment that covers many shopping categories, we often get multiple placements."

You can also build your reputation as a gifting site, and your email list, with automated or personalized messages – similar to standard refer-a-friend features – that let buyers send notes to recipients alerting them that their gift is on the way. Seventy percent of the gifting merchants reviewed by E-tailing Group already offer this service, but affiliates have been slow to take advantage of this opportunity.

Another idea is to change the text on your search bar to "Gift Search" during the holidays. An E-tailing Group survey of 10 well-known gift-oriented Web sites found that all 10 had a keyword search, six offered advanced search and six also specifically offered gift search. If you don’t already have a search bar, consider adding one. Many merchants now offer them as part of their creatives. Search bars that will look for related text on the site can be downloaded for free or at minimal cost online. If you are building your site in FrontPage, Microsoft also includes a search option as part of the program.

Your sales don’t have to conclude when you reach Dec. 23. Thanks to gift cards, January is a huge month for continued sales. Packaged Facts reports that price points aren’t as big of an issue during this time, because gift cards are often treated as "found money." Drive traffic with "Use your gift cards here" promotions, and make it easy for your visitors to redeem their cards by grouping products by standard gift card price points: $10, $25, $50, $100. Hunt your merchant sites for markdowns and any after-Christmas shipping or discount promotions. Some merchants are even getting ahead of the game by feeding discount codes for after-Christmas sales to you. The Sharper Image just instituted a program called "Hot Deals," which feeds its coupon affiliate sites with closeout offers on specific "end-of-life" products. It also offers closeout deals in its outlet store at SharperImage.com.

The weeks after Christmas aren’t just a time for closeout sales. It’s also a time for fresh merchandise. Found money, after all, often goes toward trendy items – and trendy translates to hot merchandise not offered pre-Dec. 25. For instance, AmericanEagle.com rolls out its spring merchandise on the day after Christmas – a savvy and intentional move to capture gift card sales from the trend-conscious set. "The most important thing is constantly updating, usually daily, and featuring the best that I find on my home pages," says Olsen, who maintains three luxury apparel and gift sites. That also means removing any out-of-stock items.

Whatever type of site or categories of product you have, the same rules for successful 2004 holiday sales still apply. Those sites that want to improve holiday sales will have: different products from their normal year-round assortment and their competition; a gift destination identity; a decidedly holiday atmosphere; multidepartment gift participation; and customer confidence in an affiliate’s site and their merchants.

SchoolPop, meanwhile, is already taking these lessons to heart. It launched its first gift-themed section for Mother’s Day, followed by back-to-school. It’s the same tab at the top of the page, but with the title and content changed for each promotional period. "So far this promotional page has worked really well, so I’m excited to have it for the holidays," says Mary Beth Padian from SchoolPop. "For anyone running around shopping for the holidays, it’s always good to have some place to go to get ideas."

 

JENNIFER MEACHAM is a freelance writer who has worked for The Seattle Times, The Columbian, Vancouver Business Journal and Emerging Business magazine.