Like many eTailers this holiday season, you’re likely looking for some fresh e-commerce ideas to take you through the next few weeks. We recently spoke with Lauren Freedman, president of the e-tailing group and a visionary in the field of multi-channel retailing and e-commerce. She recently completed the 3rd annual “Mindset of the Multi-Channel Holiday Shopper” survey. In this interview, she shares some survey highlights and significance for this holiday season and beyond.

ATG: OK Lauren, so what IS the state of the retail industry this holiday season?

FREEDMAN: There is no question it’s a tense time for both retailers and consumers. Traditional holiday ’08 sales are expected to be up a meager 2.2 percent versus the 4 percent we saw last year. Accessory and home goods retailers will face particularly difficult times, and every day there are new surprises, so it’s hard to predict. The good news — and we certainly don’t want to forget about the good news — is that online sales are expected to grow 9.0 percent in 2008. While that may be slow by e-commerce standards, it’s still a lot stronger than total retail sales, so this is where the opportunity lies and the investments are still taking place. The reality is that the number of new customers coming online has really slowed down. So retailers need to ensure their customers are loyal not only during the holidays, but throughout next year. It’s more about retention than acquisition now.

ATG: What were your study’s key findings about today’s multi-channel holiday shopper?

FREEDMAN: For the first time, the Web has surpassed the store as the preferred way to buy holiday gifts. We believe that the customer understands the Web and once she’s hooked, she invests more time and does more shopping this way, because ultimately it saves her time.

There are a lot of different online customer types out there, and it’s essential that we understand who they are so we can market to them effectively. Whether it’s the cross-channel shopper who prefers to research online and purchase in a local store; or the convenience-seeker, who’s saying to herself, “It’s crazy busy this holiday season and the Web is just so convenient.” We also have that last-minute customer. He’s certainly out there. Every year, our merchants tell us that people are going to shop earlier in the season, when in fact, the week before Christmas garners the greatest share of wallet. From a surgical shopper point of view — it’s all about efficiency, and online tools help them make the right decision. From a gifter perspective, they really need the right tools to find the right products and the other little touches that simplify their life. Retailers need to make sure that they put those in place. If not for this holiday season, then for 2009. Lastly, from an enthusiast’s perspective, they want to know what’s new and what’s hot. That means bringing new products forward, and keeping that customer coming back throughout the season, letting them know what’s new, what’s available – and even what’s recently been marked down.

ATG: What’s most important to online holiday shoppers when it comes to gifting?

FREEDMAN: Every year, people say it’s going to be about money, but at the end of the day, the reasons for buying are mostly saving time for 88 percent of the folks. For many of us, avoiding the crowds at the mall and just being off the highways in general, are also huge benefits. Free shipping is also a customer favorite, and once we put it out there, it’s very hard to take away.

Gifting tools were also important to consumers. Gift certificates and gift cards, the gift methods, the convenience of knowing that you can type a personal message when you’re placing your order, are all important. But not all gift messages are created equal. The ones that get sent on your order forms aren’t as engaging as the ones that take a more customer-friendly approach.

And as time starts running down, we all get a little bit crazed. At the end of the season, customers really want to know what’s hot, what they need to buy, and when they can expect to receive it. The customer expects that the products advertised online are in stock and that they’re going to receive them in time for Christmas gifting.

ATG: With the focus on convenience, what other capabilities are online shoppers looking for?

FREEDMAN: The customer likes a little bit of hand-holding, and our job online, I think, is really to replicate the best of an in-store personal shopper experience.. As I mentioned earlier, consumers are spending more and more time researching products online. In fact, 72 percent said that they plan to research some products online prior to purchasing a gift. So retailers really need to ensure that their site is up to speed and that the shopper has access to the information they need. Many of us don’t really have the time to go from store to store. So we’re doing our homework online before we go to the store. Merchandised search results and sorts are essential. Many times, particularly with gifting, people want to sort by price point. They might say, “I have 25 dollars. I’m going to sort lowest to highest.” And then if they’re still unsure about their purchase, the ability to compare products side by side is a real value-add.

ATG: Lastly, based on your study’s results, how would you advise retailers to make the most of their promotional efforts this season?

FREEDMAN: Tough times mandate promotional creativity and I don’t think it gets any tougher than what we’re facing today. I think it’s going to be interesting to watch and monitor what happens with free shipping, the customer’s favorite. Sales and specials are another favorite among the merchant community. We’re already seeing a lot more of those earlier on this season and would expect this pattern to play out throughout the remainder of the season. And don’t forget about returns’ handling. Allowing online purchase and in-store return really plays into customer convenience. Plus, customers don’t like to pay for shipping twice.

Combining early calls to action with conditional free shipping is another area that consumers respond to. For example, “Spend 49 dollars or more, you’ll get free shipping and you can tackle your entire holiday list.” Deliver deferred payments is another hot area this season – especially given the economy.

Relevance is also important in these tough times. The ability to suggest multiple products and integrate them into the same shopping experience is the kind of relevance that gets shoppers to add to their shopping carts.

And finally, don’t forget about the stores. With 93 percent of the business still being done in retail stores, driving traffic there is still essential. You can really take advantage of e-mail promotions to drive both online and store traffic. For example, some retailers encourage online consumers to shop at their stores right after Christmas for special sales. Others do a nice job of letting consumers know it’s not too late. They can still shop online and pick up their order at their local store in time for the holiday.

Happy Holidays from the e-tailing group!

This week we announced the expansion of our eStara Connections services, to include online video advertising with eStara Video Connect. This new product makes Internet video ads actionable by allowing viewers to engage and interact with the video advertiser in real-time before, during and after viewings.

Although overall spending for online advertising is down – interactive video is actually on the rise. According to a recent report from eMarketer, 67 percent of all Internet users are viewing some form of video advertising at least once a month. The report also discusses that the audience for video ads has reached critical mass as a viable video advertising market has grown. But, even with the increase of video advertising viewers have mostly only been able to passively engage. That’s all about to change. Now with the launch of eStara Video Connect advertisers can take advantage of the market trend and ensure the monetization of video with active participation.

Beginning today, we will be demonstrating eStara Video Connect at ILM 08, the Kelsey Group’s annual conference devoted to digital media with a local focus. Also at the event will be Dallas-based Media Distribution Solutions, one of the first companies that have already implemented eStara Video Connect. If you’re attending the ILM 08 event please feel free to stop by our booth – #122; we’d love to give you a live demonstration!

In the meantime, check out some of our recent coverage:
Direct Marketer Magazine
LocalBizBits
Online Video Watch
Xconomy

eStara Video Connect

[Quick note: Forrester Research, GE Money, and ATG are holding a Webinar on Tuesday, November 18, 2008 to discuss how financial firms are maximizing online interactions in a difficult market. Click here to learn more and register]

In today’s tumultuous times, we’re seeing financial services firms being more creative in their need to acquire new customers and – even more importantly – retain existing ones. The clever firms are now proactively reaching out to their customers to calm their fears and reassure them.

Many of their interactions follow the general flow of this scenario: An online stock trading customer facing a hectic day ahead summons up the courage to take an early peek at her plummeting portfolio. She logs on to her trading account and sees that she’s lost another 8 percent before the morning bell. Knowing logically that she should take the long view and remain calm, she can’t help but feeling a bit panicky. “#$@%#!!!”

Recalling a friend’s perhaps misguided advice, she hastily decides to sell all her stocks and transfer the equity to a certificate of deposit on her checking account. With a few keystrokes, she sets up the online transfer order and punches in all the details. As she stops for a split second to think about her decision, the following message pops-up:

Our wary, unsure investor decides she has nothing to lose by speaking to a financial advisor. She clicks on the button and seconds later is talking to a financial advisor, who actually knows the details of what this investor was about to do. He offers to discuss other options and after a few minutes, has convinced her that now is the time to invest in some down stocks. He also recommends signing up for a special low risk investment plan. The investor agrees to hold off on selling her portfolio, signs up for the new plan, and ends the call feeling reassured.

What just happened?
This hypothetical firm, and a growing number of real world organizations, realize that online customers might be inclined to make hasty decisions in today’s tough economic climate. And they’re taking advantage of available click to call and click to chat services to interpret their online customers’ keystrokes and clicks to proactively offer a human interaction when appropriate. Passing details about the investor and her actions to the financial advisor makes the conversation that much richer and more apt to pay off. By bringing this human connection to the Web, financial services firms are going far to allay investors’ understandable concerns, and most importantly, helping them make sound financial decisions.

In our last entry Allison talked about some of the cool features on American Eagle Outfitters’ Web site, particularly the new 77E entertainment destination that blends social networking with music and video. We always like to keep an eye on what AEO is up to, since they’ve been a pretty cutting edge brand when it comes to e-commerce. So after working through a few blog glitches over the past week (and moving to a new hosting service and the newest WordPress version) we’re happy to bring an update today, acknowledging AEO’s newest move.

Recently, American Eagle Outfitters launched a brand new retail concept called 77kids by american eagle. While some see this as an especially bold move given the current economic state, we think it’s great they chose to introduce a new online-only line. Not only does it demonstrate confidence on AEO’s part, but it also clearly demonstrates they know what their customers want – both moms and kids – and they respond accordingly. Moms want to buy their kids clothes that last…and since they might be tempted to hang onto their cash a little more closely over the next few months, it’s a smart move to offer an apparel line whose major selling point is its guarantee to endure 77 washes without breaking apart. Consumers are already more apt to head online than jump in a car to go shopping, since they save time and gas and can readily sift through dozens of options looking for what they want at just the right price. It doesn’t hurt that 77kids.com is offering free shipping and returns, either.

Of course, AEO didn’t shy away from incorporating interesting and unique social shopping features on this portion of their Web store, either. Taking a page from the success of their primary teen brand site, 77kids.com offers functions like the ability to send e-gift cards and there are already promotions for a Web-exclusive Jonas Brothers concert. What better way to win over both kids and moms than by providing free entertainment from a hugely popular, family-friendly band? Visitors can even add a quick Jonas Brothers video clip to their Facebook pages simply by clicking on a “share” button.

We’ve said it before, we’ll say it again: despite the down economy, there are opportunities to beat the competition by maintaining a serious, creative strategy when it comes to the Web. If everyone’s competing for fewer dollars…the sites with the best overall experiences are the ones that will earn customers. So from everyone at ATG – kudos to American Eagle Outfitters… we can’t wait to see what’s next!