Despite the gloom hanging over the holiday shopping season, affiliates can boost sales by giving consumers what they crave: value.
Last year, Kim Berry gave her husband Dennis a miter saw and a massage chair pad. He gave her a high-end juicer, a DNA test for their mixed-breed dog and jewelry. There were also plenty of smaller gifts under the tree, and they spent $1,200 on gifts for their parents, a grandmother, brothers, sisters, nieces and nephews.
This year, Kim, a corporate writer, moved to a different company and took a 20 percent pay cut. Her husband’s IT job was outsourced overseas.
"Where we once had two professional incomes, we are now living on 80 percent of my income," she says.
This year, she and her husband will exchange gifts worth less than $100, and Kim’s sisters and their families will get nice greeting cards. For his large family, the’’ve agreed to keep the budget below $250.
"We’re not sure how we’re going to divide that yet. We may not be able to buy things for the nieces and nephews this year," Kim says.
Welcome to the holiday shopping season, 2009 edition. Expect a replay of last year, when consumers kept their wallets zipped until the last possible moment and spent less when they finally spent. Despite recent assurances from Ben Bernanke and other economists that the worst is over, there’s plenty of gloom among consumers, who are facing the highest unemployment rate in a quarter century.
Research firm eMarketer forecasts that online retail spending will stabilize by the end of the year, that is, growth in sales will be zero year-over-year. But that’s no growth from a memorably bad quarter in 2008. "Last year was very disappointing, there was a real contraction. It’s going to continue to be tough for the rest of this year," says Jeffrey Grau, eMarketer’s senior retail analyst.
And that’s the good news. According to the U.S. Department of Commerce, ecommerce sales in the second quarter of this year fell 4.5 percent year-over-year. Optimists called that a slight improvement from the 5.8 percent year-over-year decline in the first quarter.
Indications from the back-to-school season are another indicator of a challenging gifting season. According to the National Retail Federation, spending on kids’ clothing and school supplies was down 7.7 percent from the previous year, which was also bad. Consumers seemed to have trouble letting go of their hardearned dollars. Less than half of families with students in K–12 or college completed their shopping by early September.
"Back to school happened late this year, and we expect to see the same with the holidays as we have the same short shopping season as we did last year once again," says Mark Kirschner, LinkShare’s CMO.
At the same time, coupon-clipping and bargain hunting intensified. Ebates, one of the top 2 percent of affiliates in terms of sales and merchant revenues, benefited from this. Spending at its back-to-school stores was up 133 percent. This example shows how affiliates who respond to the public’s deal-seeking mood can grow their market share.
"Shopping lost its fun last year. It used to be, ‘One for you, one for me.’ Last year, purchasing was more focused," says Kevin Johnson, CEO of Ebates.
According to LinkShare, the price-conscious mentality may not be a temporary response to a slip in the economy, but a lasting cultural shift. A study by the performance marketing network and gsi interactiveSM found a new kind of online shopper: the value hunter. Certainly, the ability to find the best price has always been a feature of e-commerce, but, according to the survey, price now beats brand – and it may even change what people buy.
Okay, kill the gloom. Most folks will still buy gifts, and slightly more of them will buy online than last year. Says eMarketer’s Grau, "There are consumers out there that are unhappy with traditional stores. They’re up for grabs."
Here are some tips that will help affiliates maximize the effects of holiday promotions — as well as their revenue.
Add Value
According to the LinkShare survey, 63 percent of value hunters will buy something online they normally wouldn’t have purchased because of a special offer. This is an opportunity for affiliates to step up and differentiate themselves through value-based products and promotions. While you can’t control product pricing or selection, think about what you can add to make a purchase feel worthwhile.
Today’s consumer can’t afford to make mistakes. "They’re looking for confirmation that they bought smart," Kirschner says.
Good content is a cost-effective way for an affiliate to add value, according to industry consultant Lisa Riolo, formerly of Commission Junction. One of the benefits of shopping online is that consumers have access to a broader selection of merchandise and better information about not only price, but customer service among merchants.
"One opportunity an affiliate has is to provide true comparisons that are relevant to the consumer. Instead of showing the alternatives, provide content, comparing and contrasting the different brands, styles and merchants they’re buying from," Riolo says. The more information you include to help fire the purchase decision, the better. For example, one merchant may price an item higher but offer free shipping.
Building a site that’s rich in media can be another powerful tool. "Rich media has been a tool that can drive results, as have video and interactive widgets, as long as they are designed to drive a sale, and not just to be interactive for the sake of being interactive," according to Kirschner.
Cozy Up to Merchants
One of the most important things you can do is to make sure you stand out to the affiliate managers, whether they’re at a large network or working for one of the brands you sell. Although they don’t like to talk about it, there are special deals available for super affiliates and rising stars.
The best way to stand out is to be proactive, says Matt Enders, founder of mgecom, a company that manages affiliate programs: "If you really want to capitalize on the fourth quarter, make sure not to wait for affiliate managers to contact you. Don’t be afraid to contact a manager and pitch them," Enders says. Instead of looking at yourself as an extension of the brand’s business, he advises, remember that you are running a business yourself.
You can see how this works for Vistaprint affiliates. This year, as always, the online printing shop will feature holiday cards and calendars for the new year, along with discounts and, as it gets closer to the final shopping countdown, free shipping offers.
The most successful Vistaprint affiliates add a truly personal touch to these offers, according to Donald Schamber, manager of affiliate marketing. Many build custom holiday pages, many of them specific to Vistaprint. They might also do some blogging, or send out emails and newsletters.
During the planning period for the holidays, Schamber does quite a bit of direct email communication with the company’s top-tier affiliates, letting them know about the top offers and making sure they understand new ones. Vistaprint will even adapt an offer to work better for a valuable affiliate.
It also offers holiday-themed, co-branded landing pages on the Vistaprint site. These pages, although hosted by Vistaprint, carry-through the look and feel of the affiliate site that referred the shopper. Schamber says testing has shown improvements in the conversion rate and an increase in the size of the average order when the affiliate’s brand carries through to the actual transaction.
"For some affiliates, this is 60 to 80 percent of their business. It’s such a short window of opportunity that we try to be really responsive to them during that time," Schamber says.
Tricia Meyer, founder of Sunshine Rewards, uses photos and videos to provide a personal touch that appeals to her members and to affiliate managers. For example, last year, she posted a video of her and her mother in front of a Christmas tree, bickering over a box of Ghirardelli chocolates. She also featured her daughter singing, "All I Want for Christmas Is My Two Front Teeth." Says Meyer, "The program managers we work with treat us really well. Even if we don’t send a ton of traffic to them, they know we’ll go the extra mile."
Watch for Trends
It’s great to be offering some of the hottest holiday gifts. It’s stupendous to be among the first to have hopped onto a meteoric trend. Marketers who stand out from the year-end madness have well-developed campaigns ready and waiting when a product hits big. Trend-spotting, formerly the purview of large, rich research companies, has become accessible to everyone, thanks to the search companies.
Keeping an eye on Google Trends, Bing xRank, Yahoo Buzz Index (buzz.yahoo.com) and Alexa’s What’s Hot will show you the current most popular searches. You can also put in your keywords — or any term — and see a graph of its popularity over months. These services can help you find the moment when the popularity needle begins to quiver. To keep up with the blogosphere, monitor Technorati. For truly immediate insight into what we’re all talking about right now, Twitter provides a list of trending topics on its homepage.
As you look at trends, Riolo advises that you keep in mind how the economy may influence them. She says, "For example, entertainment products remain hot this holiday season, but consumers are interested in things they can enjoy at home with the family, instead of spending money going out."
Customer Evangelists
Word-of-mouth has never been more powerful or ubiquitous, thanks to Internet sites that let you rate everything from your toothpaste to strangers’ tuchuses. "Reviewing is the new advertising," says Reinier Evers, CEO of trendwatching.com. His consulting firm recommends offering customers the ability to post product reviews on your site. You should also make it easy for them to post reviews of your products and your site to third-party sites.
There are a couple of advantages to enabling reviews on your site. First, Evers explains, it’s the best way to keep track of what customers are saying — and to quickly and visibly respond if a review is less than stellar.
"Engaging in conversations from an early stage on will often help defuse a potentially damaging, angry thread with others jumping in," he says.
To help your site visitors understand just who is doing the reviewing and why they should listen to them, Evers advises that you provide context for reviews by letting people set up profiles and then adding the profile information to their ratings.
"Consumers are not as accepting of advertising any more. They are more conscientious about researching products," says eMarketer’s Grau. "They’ll buy from the retailer with more information in the form of user ratings and reviews, and personalized recommendations."
With some additional work, there’s another potential bonus for installing reviews: awesome SEO. In May, Google introduced Rich Snippets, a search feature that Evers calls revolutionary, and here’s why: Rich Snippets could get your site reviews into the top organic search results.
First, you need to add some new markup to your review pages; the search giant provides information on how to do this in its Webmaster Central Blog. Then, if Google’s search algorithms deem your reviews to be relevant to someone’s search, a link to the review on your site will show up in the results. Your Rich Snippet link will include the overall product rating, review count, and a snippet of actual review text, making it eye-catching and highly attractive to searchers.
Conversion, Not Price
Once you get into the mindset of today’s consumer, you realize that it’s not all about getting the rock-bottom price. Riolo advises you try to segment both your advertising and your offers to appeal to veteran online shoppers and newbies, as well.
For example, if you normally merchandise "Gifts under $100," try "Gifts under $50" to appeal to bargain hunters. Appeal to time-starved, convenience-oriented shoppers by emphasizing quick shipping.
"Discounting is a vicious game. To lead with a discount can kill you," says Grau. "Instead, give them a reason to come to your site, and then sweeten the deal. To ensure they make a purchase on your site, you offer them an incentive."
A coupon offered at point of purchase is an excellent deal-sweetener. Riolo notes that many affiliates find consumers abandoning shopping carts to go in search of coupons. Then, they convert on the coupon site instead of where they made the purchase decision. Even if you don’t normally work with coupons, you should. She says, "If a coupon is available, every type of advertisers needs to do that, not just the coupon sites."
Avoid the Google Rush
Keyword prices skyrocket in the run-up to the holidays, as major marketers throw their weight into search marketing.
"They dominate the market and drive cost-per-click so high that affiliates can’t compete anymore, even for what you thought was an obscure keyword. They have teams of people looking for those same obscure keywords," says Shane Donnelly, an account manager for eZanga.com, a meta-search engine.
EZanga.com claims that keyword prices on its search service average half the price of the big four. Donnelly adds that, while eZanga.com’s network of second- and third tier search engines handle around 12 billion searches a month, compared to Google’s 70 to 80 billion, it offers plenty of scale for most affiliates.
"During the holidays, when you can’t afford the cost-per-click on Yahoo, Google or MSN, second-tier search engines are the place to go," Donnelly says.
The Tried and True
In 2007, holiday sales through Sunshine Rewards shot up, thanks to a Disney cruise contest. Members got an entry for every purchase they made through the cash-back and coupon site. Even if they didn’t win, people who booked the cruise on their own could earn Disney gift cards to use on the voyage.
In 2008, Sunshine Rewards founder Tricia Meyer wanted to make her holiday promotion even better. For starters, instead of one big contest, she hoped that a series of smaller ones might give her site a steady stream of publicity. It also seemed like a good idea to branch out from the Disney theme, in order to reach a new audience.
Both ideas backfired. Bloggers weren’t excited about the smaller contests, and Meyer found out just how many of her more than 13,000 members were Disney fans.
"Now, we realize those Disney fans are our bread and butter," Meyer says. "In this economy, we’re better off playing to our strengths."
In this economy, that goes for all of us.