Past Performance Predicts Proper Preparation

My mother is a bargain shopper who believes in shopping early and often. So, she has been busy preparing for this year’s holidays for months now–or maybe she started last millennium. Either way, online retailers should follow her lead and be thinking ahead. Right now, if you haven’t already, start mapping out a strategy to insure a successful Q4. You can now watch a recording of a recent webinar where I reviewed 2010 performance and provided a series of tips on how to maximise sales and achieve a great ROI. Or you can read this post and a series that will continue over the next couple of months, where I’ll review last year’s performance and provide tips for how to get ready for the holidays this year.

Get organised, stick to your plan, and be prepared to make adjustments.

Screen Shot 2011-08-24 at 11.48.13 AM Frankly, I’ve never been more excited about e-commerce than I am this year. The weak US economy does not change the fact that paid search continues to grow rapidly. In the UK, Europe, and Australia, we are seeing continued explosive growth in ecommerce and paid search. Nevertheless, taking advantage of this opportunity requires skill, perseverance and a focus on what matters.

As George Santayana said, “Those who cannot remember the past are condemned to repeat it.” So, a historical review is imperative to building a foundation for success during the 2011 holidays.

At ChannelAdvisor, we pay close attention to the performance of our retailers year over year. In particular, we look at how the same stores revenue changes. So far, 2011 has been a banner year, with paid search growth averaging 39% and some verticals seeing more than double that growth. Since we expect this to continue through the holidays, this means adjusting budgets, keyword bids and inventory stock levels with this growth in mind.

Make changes in anticipation of growth, rather than in reaction to it.

Of course, every retailer is different, and our clients have benefited from our technology and services helping them achieve this impressive growth. But if you are not seeing growth then you should be taking a hard look at your paid search strategy and making adjustments now.
Not all retailers or verticals see a huge spike in sales during the holidays, but for those that do, growth is rapid and strong. In the table above you can see the kinds of typical growth from early October to the peak week in December.

Q4 Paid Search Growth Use your actual growth this year and then you can use this table, or last year’s metrics, to set budgets and revenue goals. Look at last year’s ROI, and review which promotions worked best. Keep an eye on key dates, or better yet, put them on a calendar, so you are preparing for Black Friday well ahead of time. Do you know which products or product categories were hot? If so, can you predict what will sell this year? Look to products that are frequently given as gifts, are holiday related or are used in winter.

Over the coming months, we’ll cover more strategies and tips for making the most of this growth, and for continued success in the holidays.




Written by Jason James, Paid Search Product Manager