Shopper Experience

Tips to help your ecommerce store shine for the 2022 holiday season

Wix VP of Online Stores Oren Inditzky details strategies that will build an advantage, including attracting repeat customers, network effects and gift cards.

2022 holiday shopping predictions for ecommerce and retail
(Photo by Amy Shamblen on Unsplash)

In the retail world, the holidays are high season.

Gift-giving around Christmas, Hanukkah and Kwanzaa means shoppers are out browsing for others. As they look for unique items, they often want something new, and retailers are there to meet them with the latest products. As they’re shopping, many also buy for themselves or their families, helped along in their decisions by the many deals across the landscape.

It’s a time when brands and retailers can maximize revenue, but it’s important to plan ahead. Everyone in retail rolls out their best offers during the holidays. Preparation will be key to understanding the shifts that are taking place, and capitalizing on opportunities to stand out.

The convenience of ecommerce, coupled with events like Cyber Monday, have also turned the holidays into a prime time for shopping online. In 2021, 32% of total online sales for the year were recorded during the holidays, according to the Adobe Digital Economy Index. Heading into the 2022 holiday shopping season, 58% of shoppers said they plan to increase ecommerce shopping this year, according to Radial. Couple that with October holiday kickoff deals that are moving the start of the season earlier than ever, and there are plenty of opportunities to reach customers throughout the final three months of the year.

With fixed dates and traditions, the holiday season has a cadence to it that is familiar in many ways. But the progression of consumer behavior, trends and the economy means each one is unique. This has been especially true in recent years, as the approaches taken by retailers have been shaped by evolving ecommerce capabilities, and economic shocks surrounding the pandemic. This year, 40-year-high inflation is playing a big role in shaping the environment, centering prices in the minds of many consumers. To understand what’s important to focus on for small businesses this year, The Current spoke with Wix VP of Online Stores Oren Inditzky. Here’s a look at key items that growing brands can add to their preparation list to stand out alongside larger retailers in a market of growing competition:

Returning customers are the gift that keeps on giving.

One reason the holidays are a unique time for shopping is that consumers are often stepping out of their usual habits. They’re willing to visit new sites as they shop for others. It’s a time when efforts by brands and retailers to capture the attention of new customers can have maximum impact to bring in revenue.

It’s also important to recognize the opportunity to take those holiday shopping conversions, and make them last all year, Inditzky said.

With so many new customers arriving, the holidays are a valuable time to attract repeat customers. New customers in December can be a brand’s best customers down the line: Existing customers are 50% more likely to buy from a store again, according to Wix, and they spend an average of 31% more than new customers.

Centering retention provides a few advantages heading into 2023, Inditzky said. For one, the work of attracting a customer, making them aware of your offerings and allowing them to experience a sale is already complete after an initial purchase. That’s important work, since it costs 6-7 times more to acquire a new customer than to retain an existing one, according to Wix.

At the same time, the democratization of ecommerce tools is making it easier than ever to build an online store, which is in turn growing the number of brands and increasing competition. The ability to keep customers coming back is a differentiator. Retention is also particularly relevant during a time when inflation is driving prices up, as existing relationships can drive decisions to keep spending with a brand at a time when shoppers may be pulling back on purchases.

Once a brand has made the decision to center returning customers, it’s important to measure it. That means not only planning to track how many customers arrive on a site, whether they convert and how much they spend through metrics like revenue, return on ad spend and average order value for the season.

It means paying attention to what they spend over time. This can be achieved by adding customer repeat rate to KPIs. This metric accounts for the purchases by customers who come back to a store. As they get ready for the holidays, brands and retailers can take steps to benchmark repeat rates for their particular consumer category.

Since new customers will also be arriving during the holidays, there are also important steps that businesses can take to ensure that new customers that are acquired during the season will keep buying in the future.

Here are a few key areas to focus on to maximize customer eturn rate, according to Inditzky:

Email marketing can be a powerful tool to drive repeat purchases. There’s a reason it’s a tried-and-true approach. It provides an opportunity to meet customers where they are – in their inbox – and remains a cost-effective strategy, Inditzky said.

A retention-focused email marketing strategy has several different tactics. A welcome email following a purchase can help to familiarize a customer with a brand. Wix has seen open rates ranging between 50 to 60% for welcome emails, Inditzky said.

“The customer came in and saw your store for the first time during the holiday season,” Inditzky said. “That's the time for you to reach out back to them and tell them what your store is about.”

Cross-sell emails and upsell emails that recommend complementary items are also effective tools.

Heading into the 2022 holiday season, Inditzky said brands should consider the content email as an especially powerful tool. This email isn’t built around marketing a particular product. Rather, it offers content that is relevant to what a brand or retailer sells, and provides additional value to the customer who reads it. For instance, a store that sells camping equipment could offer recommendations for trails and outdoor excursions in an area, or hacks for a great camping experience. Give customers a reason to follow your brand and build trust with them. As a result, they will come back, Inditzky said.

Social media is another area to meet people in an area where they are already spending time online. Along with creating a presence, offer content that has value. Building a following on these channels is another way to create repeat touchpoints with customers, and create brand awareness.

Customer service is an important area when it comes to retention. This can feel like it is on the operations side, but the internet makes it a customer-facing function. Customer service is often seen as the province of big brands who can hire many people to staff call centers, whereas newer brands often run lean. But there can be a big payoff as a result of investing resources in it.

“This is exactly the opportunity for you to set yourself apart, especially if you're a small brand,” Inditzky said.

Providing information and service after a purchase shows customers that a brand is willing to go above and beyond the transaction to ensure a great experience. It’s also a chance to solve problems. A customer may have received the wrong item, having a question about delivery times, or wonder about the return policy. Making it right shows that a brand cares.

For a lean business, tactics like adding an FAQ to a website and implementing chatbots can add capabilities digitally, and fit within a lean resource model. Overall, be proactive. Another approach is to check up on someone after their purchase, and ask them about the item and their experience. Taking an extra step out of the ordinary is a chance to potentially surprise, and create a memorable moment for the customer.

“We remember when it was a delightful experience. We trust that brand,” Inditzky said. “And trust is almost everything in this business, especially for small businesses operating online.”

Loyalty programs are another addition a brand can make to its offerings to encourage repeat purchases. To execute this, set aside a specific area on a site to capture key information, and make it seamless to sign up. It’s important to communicate the value of the program in a simple, clear manner so that customers understand what they are getting if they purchase again. Customers want to know what they will receive. Communicating it and delivering can create a transparent relationship from the start.

Oren Inditzky. (Courtesy photo)

Network effects build loops that can’t be copied.

By setting the stage to attract customers and keep them returning all year, the holidays offer a chance for a brand to shine. But in order to do so, the reality is that many have to find ways to stand out. Everyone is bringing their latest and greatest approaches, so brands are searching for an edge.

But don’t mistake: Having the flashiest presentation isn’t the only way to break through. It can show up in how you’re built.

Among the major benefits of an ecommerce business is its flexibility, which allows store owners to adapt quickly. However, there is also some risk. Competitors can use these same advantages to easily copy successful products, user experiences and sales tactics, and launch them in a hurry.

The key to creating long-term barriers to competition is to tap into network effects, Inditzky said. Network effects describe the idea that the value of a product or service grows as more people use it. This has long been a powerful principle in consumer software product management, but Inditzky said it can apply to ecommerce, too. Once a network effect is established, a business can operate on a self-fulfilling flywheel of new and returning users. This is difficult for another brand to recreate quickly, Inditzky said. If implementation begins in the lead-up to the holidays, there is time for one to take hold, or at least for the groundwork to be laid.

Inditzky broke these network effects down into four loops:

The viral loop: This describes products, services and experiences that are built to encourage people to share them with others. It’s not about having a widely-viewed TikTok or a simple “share” button on your site. Rather, Inditzky said this goes back to how the purchase experience is designed to encourage sharing. Inditzky offered the example of Groupon’s approach to group discounts more than a decade ago. The company offered coupons, but the discount would only unlock if a certain number of people signed up. This not only encouraged people to share, but provided incentive to do so. This loop results in continuous referrals, and repeated sharing of content to raise awareness.

The social loop: “The idea here is to generate participation, not just consumption,” Inditzky said. Create elements of a store that allow people to contribute. Bringing people in who are having a conversation or creating content around your products increases the value your online store provides to visitors. This is how social media platforms grew. Each new person sharing content made the platform a better experience. For brands, implementing reviews, creating forums and encouraging people to share information can help this loop to start turning. This creates a continuous flow of content, and builds trust with your audience. The content and sharing, in turn, helps to generate traffic, and then there can be opportunities for a brand to exist within this widely-visited experience. TripAdvisor is a destination for reviews, all powered by user-generated content, but they are built into a shopping experience.

The compulsion loop: At the heart of this framework is the idea that people keep coming back because there is always something new waiting for them that they know they will love. It’s difficult to implement, but can have a powerful impact. People return to social media and games because they know they’ve been surprised and delighted there before with fresh content and variable rewards. As a result, they want that experience again. In commerce, this can be achieved through tools such as merchandising and price. For instance, Costco will often keep the low-price staples that people come for in the back of the store, while discounts for more compulsory, unexpected items will be toward the front. People remember the delight they experienced when they found a giant package of a treat at a discount. This not only converts the impulse buy on the spot, but keeps them wanting to return. Well-placed items can also increase average order value, and inspire people to tell others and share what they found on social media.

“Whether it's through content, new products or new discounts, if you start generating that addictive habit within your customers, then they will just come back,” Inditzky said

The data loop: This is essentially a feedback loop in which every user interaction improves the experience for the next user, which means that a store can get smarter and better as more customers visit. If the right tools are in place to collect the data, analyze it and make adaptations in the online store accordingly, customers will enjoy a more optimized experience which will ultimately lead to better conversion. There are growing numbers of analytics, AI-powered apps and platforms that can help to implement this in specific areas.

Inflation will alter shopper behavior.

With inflation at 40-year-highs and talk of a pullback in the economy, consumers will be more price-conscious as they shop during the holidays. This could bring about two areas to focus on in particular, Inditzky said.

Cart abandonment could become an even bigger issue. This has long been a challenge in ecommerce, as about 70% of online orders that are started are eventually abandoned, according to the Baymard Institute. Even before the ecommece boom of the last two years, studies showed that more than $4 trillion worth of merchandise was left in online carts by customers that didn’t follow through on their initial desire to buy. Even the giants of ecommerce face this struggle.

Inditzky suggests working on the problem both from the perspective of prevention, and recovery.

When it comes to prevention, first take steps to understand the reasons why shoppers abandon carts. Some customers may balk at unexpected fees, so it’s important to be transparent. Others may change their mind during the steps of the checkout process, so it’s important to make that transaction flow as quick and simple as possible. Requiring registration before a purchase can also create extra steps that lead to a cart being left before checkout, so it's best to minimize.

It’s also important to understand how a cart is being used. With price pressure, more people may be looking to use the cart as more of a wishlist this season, Inditzky said.

On the side of recovering customers that have left items in a cart, there are tools available to help. Platforms have built-in tools that record every abandoned cart, which then can also generate automated emails to shoppers. Take the time to consider how those emails should be positioned for particular products. Adding coupons to them can also provide extra incentives to complete a purchase, Inditzky said. Or, try a multi-step approach. Sending several emails, spaced out over a certain period of time, can help to ensure that you engage consumers.

Gift cards could be more widely purchased this holiday season, as well. Many ecommerce platforms have the capability to offer these for online stores, and offer tools to personalize and promote them. They may be appealing to shoppers at a time of stretched dollars because they have a fixed price, and can be purchased for a custom amount that a shopper will be willing to pay. So if they have a budget of $50, a gift card ensures they can meet that amount, and no more. For businesses, a gift card offers another way to introduce your brand, even if a customer doesn’t buy a product. Plus, it means that a person who received a gift will visit your site later, as well as the original buyer. When they do, they may make another purchase while they are there. One customer becomes two.

A checklist for holiday success

Be prepared for the influx that is coming. While there are plenty of unique dynamics each year and it's important to prepare the latest launch, it’s still important to take time to put the building blocks in place to make the most of a period when many are shopping, and withstand the rush. For those seeking action steps to start, Inditzky offered a quick checklist:

Driving traffic: Generate urgency to give people a reason to visit your site during the busiest shopping times. Steps include:

  • Create campaigns that offer coupons via email, offer discounts that include segmented offers and get flash sales ready.
  • Run time-limited promotions during specific high-interest hours.
  • Ensure you’re on a platform that makes it easy to manage a catalog and online store in one place, and also extend promotions across channels to Amazon or social platforms.
  • Improve SEO by understanding the keywords in your category, and optimizing site content for Google and other search engines.
  • Spread the word through content marketing campaigns and working with influencers to generate word of mouth.

Operational Excellence: Before the sale, put the infrastructure in place to deliver for customers:

  • Inventory: Spend time to ensure that the right amount of product is in place to fill orders, but that you don’t have so much that it challenges profitability. On websites, implementing back-in-stock notifications and other features can help to communicate availability to customers.
  • Site performance: With flash sales driving traffic, ensure that your site can handle increased usage from the holiday rush, and continue to load quickly. Speed is important. According to Google, even a two-second lag in load time can drive 32% of visitors away without clicking. Another study by Akamai and Gomez.com found that a one-second delay in page loading can lead to a 7% drop in conversions. Wix has six optimization steps to take.
  • Customer service: As noted above, ensure that details such as FAQs and contact methods are in place so that customers can get their questions answered.

Site optimization: Customers will be visiting many sites during the season, so they will be looking to take in key information about a brand upon arrival. Make sure your site engages them quickly, and communicates what your brand offers while doing so.

  • Use clear call to actions (CTAs) that generate urgency, using words like “now” or setting time windows.
  • Add and edit videos and imagery. Great visuals go a long way toward generating trust and increasing confidence. According to a Brightcove survey, 48% of consumers reported that videos increased confidence in their online purchase.
  • 3D modeling is another growing visual tool that can be harnessed to show a fuller view of a product, and also increases confidence.
  • Content: Whether it is a homepage or landing page, make sure it is clearly organized, communicates the value and differentiates the brand.

New Research

How 300+ leading ecommerce brands are positioning themselves for growth.
Download the Report

Trending in Shopper Experience

We’re all navigating the changing ecommerce landscape together. Have a story idea? Want to write for us?
Drop it in The Cart
Retail Channels

Amazon touts 'biggest ever' Black Friday weekend

Plus, check out peak holiday shopping weekend results shared by Klaviyo, Wayfair and Ace Hardware.

brown and black floral box
Amazon under the tree. (Photo by Wicked Monday on Unsplash)

At Amazon, 2022 delivered the "biggest ever" Thanksgiving weekend to date.

ustomers purchased a record number of products from Thanksgiving through Cyber Monday, the company said in a news release Wednesday. Amazon did not disclose sales figures, while sharing that “hundreds of millions” of products were purchased.

Keep reading... Show less

Latest from Shopper Experience