This holiday season was predicted to be the best yet for online retailers – and it was. Fifty-eight out of 61 days drove over $1 billion in online sales, including every single day in November. Gray November, the month-long period of deep discounts, is now commonplace. But do people buy more or simply buy earlier?
This year, I wanted to find out how early discounts affected my own shopping behavior and see what lessons it might offer for retailers. So, I conducted a little experiment.
A Little Background
My yearly holiday shopping comes with a double whammy. See, my wife’s birthday falls one week before Christmas. After buying gifts for my wife and the kids, my digital wallet looks more like a countdown clock in an email message, getting smaller and smaller as the seconds tick away.
I traditionally draft my gift list a few days before Black Friday and then purchase over that weekend. But this year, I pivoted. Having tracked the Gray November phenomena over the past several years, I felt confident that the discounts would be just as strong prior to Black Friday weekend as during it.
You can’t write about holiday shopping (or conduct your own holiday shopping experiment) without addressing the elephant in the room – Amazon. Although I purchase from Amazon, I am not a Prime member. Am I allowed to say that? I guess the first step is admitting it. As a non-Prime member, here's what I was looking for in my shopping experience:
Could other retailers compete with Amazon for my attention and wallet?
Would I regret buying “early?”
Was Amazon the right retailer, or did someone else offer value or service that was better?
In the end, how much wallet share would Amazon nab, and why?
Let the Purchasing Begin
Although my very first purchase took place on November 13, my primary shopping started on November 16. I completed 75% of my shopping prior to Thanksgiving Day and 92% prior to Black Friday.
To Amazon or Not to Amazon?
HitWise reported that Amazon accounted for 55% of Black Friday sales and 45% of Thanksgiving Day sales. For the holidays overall, GBH Insights estimates Amazon accounted for about a 50% share of online revenue.
For me, 33% of my purchases were made on Amazon, accounting for 11% of my wallet. However, my November 13 purchase was a one-time, big-ticket item. By removing this specialty purchase, the adjusted wallet share Amazon earned from me jumps to 29%. Even though money spent is money spent, I view this adjusted 29% as a more accurate number, as it's based on my typical gifting habits.
One of the main reasons I chose Amazon was the convenience of buying many diverse products in a single order at a price that was comparable to or better than a competitor’s. When the price was comparable, I mostly leaned toward Amazon for value-add reasons, such as my confidence in their customer service.
But Amazon certainly lost out on a few of my purchases. Twenty-five percent of the time, the price was higher. Another 25% of the time, I was concerned about the quality of the Amazon offerings (particularly the private-label offerings), and 17% of the time, Amazon didn’t carry what I was looking for.
My Black Friday purchases all came from Amazon. I purposely shopped the items prior to Black Friday, placed them in my cart, and left them abandoned. The prices at this time were comparable to other sites, and I knew come Black Friday, I’d get a deal somewhere. Interesting enough, Amazon was the one that came through with the largest price drops.
Customer Service and the Consumer Experience
I had two notable customer service experiences while shopping. The first was from Amazon. For one purchase, I ordered a product that was fulfilled by Amazon. The product quantity showed there were six remaining. One full day after placing my order, I received an email from Amazon stating the item could not be fulfilled due to the product not being in stock. But the website still showed the product as in stock and ready to ship. Needless to say, I found this to be a very poor customer experience.
On November 18, I placed an order from a national omnichannel retailer. They had a 50% off sale on several items I was shopping for. However, one of the items on my list was not on sale. The question became: do I purchase now or wait to see if the other item goes on sale? I assessed the situation. Because they offered free shipping and free returns, I had nothing to lose. After all, if they discounted the item later, I could simply return the order and place a new one with all of the items on sale.
So I purchased, paying full price for the one item. The very next morning, the full-price item went on sale at 50% off. Because it was less than 24 hours since the order was placed, I emailed customer service asking if they would credit the difference. They declined to do so, instead instructing me to sign up for their emails so I don’t miss a future sale. Umm, OK. Instead, I let them incur the cost for not only shipping the new order but processing the return. This incident reduces my chances of doing business with them in the future.
These two experiences highlight a lesson for retailers: Be sure the product counts on your website are accurate and that your customer service policies allow you to meet customer expectations. In both cases, I had a negative experience. For Amazon purchases, I’m skeptical of the value of paying for Prime. For the other retailer, knowing they won’t address a simple price adjustment gives me little confidence that they would satisfactorily address a more complex customer service issue.
Final Thoughts
I’m just one shopper, but I feel confident my buying behaviors are fairly representative – customer service and value trump price. Don’t leave the success of your business dependent on discounts. If you're a retailer, spend the next six months forging stronger relationships with your customers. Review your customer service policies. When issues arise, don’t just say you’re sorry. Go out of your way to make things right! Communicate value-adds that are meaningful for your customers.
When it comes to purchasing from you or a competitor, give shoppers a reason to choose you. If you rely on price alone, you’ll eventually lose.
This article was originally posted on www.bronto.com