2011 Cross-Channel Trends: Clear Skies Ahead: Recovery and Growth Forecasted for 2011
As we ring in a new year, many retailers are wondering what's in store for 2011. With an economy that's still bouncing back from the Great Recession, it's hard to predict the future (yet we're going to try anyway). For many retailers, 2010 proved to be a year of recovery. They're hoping to continue down that path again this year. To help you get a feel for what lies ahead, Retail Online Integration surveyed leaders in the cross-channel and e-commerce retail space in the fall of last year to get their predictions for 2011. Here's what we learned.
A Positive Outlook
"We expect our business to continue the recovery that began mid-2010," said Spencer Chesman, president and CEO of igourmet, an online retailer of gourmet gifts, imported cheeses and specialty foods, adding that he hopes to see top-line results approach prerecession levels by the fourth quarter of 2011.
Richard Sexton, president of Carolina Rustica, a cross-channel retailer specializing in handcrafted iron and wood furniture, echoed Chesman's sentiments. "We're finishing up this year at about 30 percent over last year, and expect to see gains next year of about 20 percent to 30 percent."
Companies like igourmet and Carolina Rustica are increasingly turning to the web to continue the success and growth they enjoyed in 2010. Enhancing the user experience, leveraging social media and establishing an even better online presence were among the common themes the survey respondents hit on.
"We've really changed the way we think about our website," said Scott Drayer, director of marketing and business development at Paul Fredrick, a cross-channel men's clothing retailer. "We've placed a great deal of focus on what we can do to produce a better on-site experience for the customer.
"We've seen quite a bit of change in our customers' channel preferences and shopping behaviors over the past 18 months to 24 months, so the site, the user experience and the conversion of browsers to buyers is even more important to us than it had been previously."
A growing segment of Paul Fredrick's business involves consumers interacting with the brand via social media. As a result, the retailer added easily accessible links to its website so visitors can not only sign up for its e-newsletters, but also for its Twitter account, Facebook page and blog. These links are key to attracting new customers, Drayer noted.
"We feel as though we've positioned ourselves favorably with some strategic investments that have introduced new customers to the Paul Fredrick brand and allowed us to continue to grow our customer base."
Paul Fredrick also has a "coupon code" page on RetailMeNot.com, a company that provides links to and information about online coupons, coupon codes and discounts for a variety of retailers.
While Paul Fredrick's website already passes the user-friendly test — it integrates several different channels — the company is still looking for ways to improve it in 2011. "We've been aggressive on the customer acquisition front for years, but now we're constantly testing new opportunities and technologies that can introduce more people to our brand," Drayer said.
Mobile, Catalog Options
While igourmet plans to shift its efforts away from paid search and towards Facebook and video initiatives, The Golf Warehouse, a cross-channel retailer of golf equipment and apparel, will be focusing its efforts elsewhere. Despite the buzz surrounding the medium, focusing primarily on social media doesn't always make the most business sense. The channel doesn't impact all audiences or targeted groups, which The Golf Warehouse can attest to.
"Social media doesn't represent a large spend [for us] right now, and I don't see that seismically changing over the next year," said Brad Wolansky, CEO of The Golf Warehouse. "We'll spend more there incrementally as vendors enter the marketplace with solutions that make sense."
One channel that has The Golf Warehouse's full attention is mobile, noted Wolansky. "Mobile is more and more part of our mainstream radar, and will grow as a percentage of our spend in 2011." The Golf Warehouse's catalog will continue to be integral in the brand's overall marketing plans.
Catalogs represent the biggest challenge of the upcoming year for many cross-channel retailers. Paul Fredrick and The Golf Warehouse still plan to mail catalogs this year, but they'll be coping with the headache of rising postage and printing costs vs. 2010.
Cross-channel retailers got somewhat of a reprieve last year when the Postal Regulatory Commission (PRC) denied the U.S. Postal Service's exigent price increase request, which would have raised catalog postage rates by as much as 10 percent. However, the USPS filed an appeal on Nov. 23, with the PRC having until Jan. 14 to respond to the appeal. Retailers will have to sit tight in the meantime, waiting to find out the results of this ongoing battle.
Retailers don't have to sit tight on other channels, however. Begin evaluating what worked and what didn't in 2010. Continue the strategies that worked and keep improving on them; ditch those that didn't work. By constantly working at improving your website and integrating social media and mobile into your marketing mix, you might just continue on that road to recovery.
