The end of the year is always a period of high sales and growth around the world. Of course, many focus on Black Friday and Cyber Monday weekend. And for good reason - BFCM 2021 totalled $33.9 Billion in ecommerce retail sales in the US. $6.3 Billion of those sales were just through Shopify.
However, the holiday season for US ecommerce totalled $211.41 Billion. That’s a pretty big jump up.
The reason? Gifting.
While BFCM is a driver for increased sales and order volumes, people are still shopping after the clock strikes midnight on Cyber Monday. That means there is a lot of opportunity remaining. And unlike BFCM, customers don’t expect promotions and deals.
It’s no secret or surprise that people are buying gifts right up to the end of the holiday season, it’s pretty obvious in fact. But if you want your store to continue that high growth and high performance through December, you’ll need to have a solid strategy in place.
That strategy should involve a really close look at what your customers’ needs are in the run up to the holidays, and how you can provide the best possible experience. In doing so, you’ll set your store up for not just for the holiday season, but post-holiday retention.
Let’s get started.
#1 - Focus on solving common gifting challenges
Selling your products is, in part, about problem solving. In designing your product, you think about how it solves a problem your target customer has. That “problem” doesn’t have to be something big or serious, it can be as simple as a customer wanting to drink high quality coffee at home because they don’t want to spend the money to visit a coffee shop every time. Or they need a new t-shirt that lasts longer, or they want to spruce up their bedroom decor. Gifting is even more about problem solving, and especially around the holiday season when they’re likely buying more than one gift.
That means if you want customers to buy gifts from your store, you need to solve the common issues your customers face when buying a gift. It goes beyond just your products, because there will be varying levels of product knowledge and brand awareness. Think about your store can solve different issues, and prevent dead-ends that result in customers leaving for a competitor.
Problem: Customer doesn’t know which variant to buy
Solution: Allow them to send the product as a gift, which will then allow their recipient to choose the variant they’d prefer.
Problem: They don’t which product to buy at all
Solution: Make sure you have a really strong gift card option that allows them to personalize it the way they would any other gift. Display this clearly throughout your store.
Problem: The variant or product the customer wants to buy is sold out.
Solution: Give them an easy alternative by displaying the option to purchase a gift card right from the product page.
Problem: The customer is purchasing the gift at the last minute
Solution: Promote gift cards and other gift products like subscriptions that don’t require physical delivery.
These are just some of the challenges your customers face when buying gifts online. The more solutions you provide, the more likely they’ll be to not only make a purchase but come away with a positive brand perception. This in turn can make retention all the more likely, extending the value you get out of gift customers.
#2 - Create a memorable gift subscription experience
A truly successful subscription service is often the result of the experience it offers. Easy account management, a memorable unboxing, focused and personalized engagement, etc. If you offer subscriptions already, you’ll have that experience planned and perfected for a regular subscriber. But what about a subscriber who received the subscription as a gift?
This presents some unique challenges. They didn’t buy the product, and they may know little to nothing about it or your brand. They don’t have that same brand buy-in as a regular subscriber. You need to work a little harder than normal to establish that and build the relationship. Luckily, you’ve got a big advantage on your side in that the subscriber is essentially getting a “free trial” of your service. So you need to make their experience a really great one so as to encourage them to carry that subscription forward.
That’s going to start right from the moment the original customer purchases the subscription. That process needs to be simple, straightforward, and require little additional effort on the part of the customer. Typically, a customer purchases the subscription and it starts right away with their details, requiring a hand-over process. Instead, make it possible for them to purchase the subscription as a gift. In other words, the subscription is delivered much the same way as a gift card for the recipient to redeem whenever suits them best, and allows them to create and manage their own account.
Once the subscription has started, it’s time to think of ways to enrich the experience for the gift recipient. Customers increasingly look for a more personalized experience, so you could use quiz flows to learn more about the recipient’s preferences for products, communication, and more. You can then use this to tailor both the subscription, and any email/SMS communication. They may need more brand education than a normal customer, so use email and SMS to automate the process with an onboarding workflow specifically for gift recipients.
#3 - Develop a plan for post-holiday retention
The rush of orders and new customers over the holiday season is something that every merchant loves to see. Although, that success is fleeting if you don’t plan for what comes after the holidays. It’s not enough to think about your retention strategy come January when things have settled down, it needs to be in place as soon as a customer places an order.
Post-holiday retention can be challenging, as there will be a portion of customers who buy a gift with little interest in your products or brand. We’ve all bought a gift related to a family member or friend’s interest or hobby which we don’t share. So what will bring that kind of customer back?
The answer lies in the customer experience. Make it straightforward for the customer to find and purchase gifts, and to customize those gifts such as adding notes to gift cards. Offer proactive customer service as well as self-service options to make it faster and easier to get the information they need. They’ll come away with a really positive perception of your store and products. In the coming months, you can then send them information about gift products as different key gifting periods come up.
Gifting also unlocks a unique retention opportunity in the gift recipient. The original customer believed their recipient would like your brand, so you already have an advantage to build on. Especially if the product was sent digitally such as a gift card or gift subscription, you’ll have a direct channel to engage with the recipient via email. If they’re new to your store, give them a great onboarding experience with brand education, product recommendations, information about your loyalty or membership program, and more. Send reminders to redeem their gift, as well as if they have remaining balance to spend after their first order.
There will also be existing customers who receive gift cards over the holiday season. In one survey, 83% of respondents said they’d received a gift card for a brand they’d previously tried. For these customers, you can really personalize their gift experience. Use your store data to personalize emails and SMS they receive, for example recommending products that complement those they’ve purchased before. You could also provide suggestions based on their browsing history, or even offer some kind of reward for them coming back, e.g. bonus loyalty points, free shipping etc.
#4 - Have a holiday-specific returns and exchanges strategy
It’s just a fact that with higher order volumes over the holiday season comes higher returns come the new year. Whether that’s a customer ordering the wrong size, or the order not arriving in time for the holidays. Returns and exchanges can be frustrating, however there is opportunity in this process. 92% of customers said they would consider buying again from a brand that made the returns process easy.
There are some simple ways you can make this process a positive experience for your customers:
Make it easy to initiate a return - if there’s a form they need to fill out or a link they need to follow, include this in order confirmation emails, and display it clearly on key pages such as your FAQ.
Be proactive - Send emails in the new year with information about your returns and exchanges program; how it works, options, etc.
Offer a variety of fulfillment options - E.g. buy online return in-store, buy in-store return online, print-at-home shipping labels, courier drop off or pick-up etc.
Provide different solutions - Don’t just default to a straight cash refund; there will be customers happier with an exchange, or even store credit. Prioritize options which minimize the impact of returns on your business.
- Plan for returns made by a recipient - If a customer ships a gift directly to the recipient, how does the returns process work then? Think about how you can make this easy for the recipient i.e. having a separate option for “gift returns” and offering store credit as the default option. This prevents the situation where the money is refunded to the original customer, when they’d likely just prefer the recipient to choose a new item.
It’s also valuable to understand why a customer wants to return an item. This can not only allow you to improve your experience, but to offer the right solution to their issue. For example if they say they’re returning due to an incorrect size, offer an exchange or store credit first so they can select a different item. If you see a lot of returns due to incorrect sizing, then it may be worth looking into adjusting your size guide or making it more prominent on product pages.
Bonus - Prevent specific return reasons with giftable products
The best case scenario is that a customer doesn’t need to return an item at all. That’s why it can be beneficial to preempt the return by offering better solutions for specific gifting problems. Take the example of a wrong size shirt - if the customer had a way to order the right size while still giving it as a gift, they’d likely take that over the frustration of a gift return.
Govalo offers a “giftable products” feature which enables customers to send a product as a gift. This sends the recipient an email much the same as a gift card, with a link to redeem their gift. They’ll then be given the option to select their preferred product variant, and enter their shipping details. The original customer is then provided with a link to a prefilled checkout page, where they can complete the purchase as normal.
By using this kind of feature, you can prevent customers from ordering the wrong variant of a product but they still get to give it as a gift with no need for returns.
Black Friday weekend is a big opportunity for ecommerce merchants, but so too is the rest of the holiday shopping season. By solving common gifting issues and providing a better customer experience tailored to the holidays, you’ll not only bring in more sales but welcome new customers to your brand. This will turn what is usually a low point for sales in Q1 into a high as you re-engage customers, foster loyalty, and build a strong foundation for the new year ahead.