Cyber Monday was an utter fabrication of the retail industry—an artificial attempt to create a cultural phenomenon akin to Black Friday, the long-standing nickname for the shop-'til-you-drop day after Thanksgiving. An event to get people excited about e-commerce shopping.
And it worked.
Over time, the buzz around Cyber Monday took on a life of its own. On that single day in 2010, in fact, consumers spent more than $1 billion, representing a 69 percent increase since comScore started measuring the results in 2006, and a record-setting figure e-commerce. In addition, last year roughly 88 percent of retailers offered Cyber Monday promotions, and 70.1 percent of Americans shopped online from work for holiday gifts, according to the National Retail Foundation.
On A Quest
What those impressive numbers fail to address, however, is an essential piece of the e-puzzle: consumer mindset. For marketers and retailers, that understanding could mean the difference between a gentle lift from the tide and full-out riding a wave. Experts say that shoppers behave differently, including how they shop digitally, at this time of the year. Grasp their key behaviors, and you can create a strategy for a winning season.
"Buying for yourself, versus buying for someone else, is such a different mindset," said Mahender Nathan, vice president of direct business at New York City-headquartered Godiva Chocolatier, in an interview with CMO.com. That shift in intent deeply affects how consumers use digital resources, which have increasingly become their primary research tools.
GfK Interscope analyst Alison Chaltas identified a category of consumer she calls "extreme shoppers." They make up 37 percent of all holiday buyers and cross all demographics; that percentage has been growing as people spend more time online.
"They are committed to a series of behaviors in a way that is totally different than everybody else," Chaltas told CMO.com. About 52 percent of these buyers research products online in advance of a purchase, versus 24 percent of "non-extreme" consumers. "Ninety percent of extreme shoppers say shopping online is more efficient versus 50 percent of the others," she said. In addition, three-quarters said they feel in more control of their shopping, compared to 55 percent of other consumers, Chaltas added.
Efficiency is the major driver for digital shopping. When the e-tailing group, a Chicago-based market research firm, recently surveyed consumers about why they buy online, 79 percent cited saving money as one of their top two reasons; saving time, for 77 percent, came in second. "They have a list to get done," said president Lauren Freedman, in an interview with CMO.com. "Their degree of being digital depends on what's most convenient at the time, and what helps them save money and save time."
According to Kit Yarrow, department of psychology chair at Golden Gate University, an important shift in how consumers approach digital shopping has occurred. "Last holiday season, we saw it was an explosion," she told CMO.com. "That was shoppers willing to do different things because they were desperate for bargains." However, uncertain economic and political times have caused consumers to seek confidence and control through obtaining the lowest prices on what they want. "They've moved from using these tools in desperation to actually enjoying them," she said.
Three shopping phases.
Still, for digital businesses to be effective, they should serve as far more than an order-taking mechanism. "What that means for digital is really thinking about a calendar that doesn't just center on Cyber Monday anymore," said David Brussin, CEO of e-commerce testing and targeting vendor Monetate, in an interview with CMO.com. The digital holiday season already started in September in the form of research—the first of three purchase-process phases. The subsequent two phases, product selection and transactions, will continue through mid-January.
During product selection—online or offline—customers need help sorting through the varieties of products, especially when they don't know which gifts will please their recipients. Digital shopping becomes even more vital.
"I am hearing constantly how disappointed consumers are that stores don't have inventory," Golden Gate University's Yarrow said. Digital offers some great answers, like kiosks in stores to help people see more products than fit on the shelves. But digital helps only when it’s done right.
"[Consumers] need. . a different kind of content," Brussin said. They need to sort through products in a natural way. For instance, someone looking at boots might want to choose between square or pointed toes. Descriptive categories are important. Fitting guides, sizing, detailed product descriptions, rich video and photography, and peer-generated content, like user reviews, can provide the information consumers seek.
The advice isn’t just for retailers, either. Fuller Brands, the Great Bend, Kan.-based owner of the 105-year-old Fuller Brush Company, expands its direct-offered products for the season, adding imported kitchen items and housewares it doesn't otherwise carry. Online stores of retail partners also become important showcases for customer research.
"We're selling to HomeDepot.com," said Fuller CMO Vinnie D'Alleva, in an interview with CMO.com. "We're not selling a lot online, but we found that the majority of traffic is not about buying, but about understanding the product." The chain's site becomes an educational tool.
Moving Among Channels
Although businesses can try to look at a digital class of consumer, most shoppers are still using multiple retail channels. Even among heavy digital users, "there are social and traditional elements to shopping in-stores that consumers will not abandon," Yarrow said. A smart digital strategy enables customers to move smoothly among channels.
"The consumers' expectations [that companies will] be able to operate across channels more seamlessly and transparently with them is only increasing," said Chris Davey, global head of the commerce practice at SapientNitro, the interactive marketing division of Sapient. If retail operations were confusing before, they have hurtled toward chaos for the unprepared. Mobile Internet access via smartphones and tablets—the latter of which researcher Ipsos this week said increases the frequency of mobile shopping and improves the purchase experience—are a fine example.
"Today, your mobile phone is both an opportunity to create interest or advertise as it is a fulfillment mechanism," added SapientNitro CMO Bill Kanarick. It is also a mechanism that mentally transports customers out of a store as they compare prices and perhaps place an online order to be shipped from elsewhere. Tactics like creating bundles with other products or matching prices become necessary to avoid losing business.
But then staff would either have to be observant enough to notice someone peering into a phone, or the store would need an advertised policy to match price. Physical retail locations must come to grips with mobile commerce. For example, Sapient's Davey told CMO.com that for each mobile transaction, there are 64 store location searches. Unless a company has made locations and even product availability visible through major search engines, the consumer will increasingly go elsewhere.
In short, no matter how powerful new technologies might seem for the holidays, they all start with the minds and behaviors of customers. Follow them, and the entire merchandising and sales process will become more natural and effective. Don't, and those mobile and e-commerce systems could become nothing more than an expensive waste of energy.