Four Ways Retailers are Leveraging PLAs to Boost Holiday Revenue

By — 11.25.13

Holiday PLAs

Consumer behavior around the holidays has shifted dramatically over the last few years. When we look back at 2008, we see that the majority of shoppers waited until after Thanksgiving to make the bulk of their purchases. Retailers saved the best deals for the Black Friday/Cyber Monday holiday weekend and free shipping in mid-December was hard to find.

In 2012, we saw how the recession impacted consumers―shoppers had been trained to look for deals. With retailers offering promotions earlier and consumers waiting to buy until they found the right deal, the shopping curves flattened over the holiday season. What’s even more interesting is that people began to start shopping again as soon as the presents were unwrapped, leading to a quicker revenue recovery for retailers.

This year, Americans began shopping even earlier, taking advantage of early bird discounts. We can expect that consumers will also wait until the last minute this year, as 50% will finish their shopping in the last two weeks before Christmas (Source: Shop.org 2013 Holiday Strategy & Planning Guide).

So are retailers doing to capture both early and last minute shoppers―both online and in store? They are using product listing ads (PLAs).

Here are four ways retailers are leveraging PLAs for the holidays:

1.       Utilize local PLAs to drive traffic to store

Because consumers are willing to wait for a deal, many of them miss shipping cut-off dates. We know that 77% of mobile transactions are completed in store (Source: xAd & telmetrics), so brick-and-mortar retailers are taking advantage of local PLAs to target last-minute shoppers.

2.       Add promotions on the product level

It’s simple, consumers want free shipping. In fact, 47.7% of shoppers will leave a site with no free shipping and instead find the item on another site that does offer free shipping (Source: Google). Smart retailers are adding promotions to the product level.

Also, in order to appeal to promotion-hungry shoppers, retailers should invest in Google’s Merchant Center Promotions to keep coupons front and center on PLAs.

3.       Build a heat map to predict revenue per click

Retailers need to anticipate rapidly changing shopping behavior and execute their holiday strategy quickly and efficiently to make the most of the compressed shopping season. At Adlucent, we’ve seen holiday PLA conversion rates increase at a 155% average higher rate than text ads. Because PLA conversion volume ramps up so significantly, bid-parting strategies are critical.

Adlucent starts by studying a retailer’s previous years shopping behavior to create a heat map of each day and hour of the holiday season. It’s important to account for the shorter season and adjust the dates. Next, we develop bid parting strategies for text ads and PLAs. This helps to determine the times that people are most likely to buy and “bid up” during these periods.

4.       Use your top selling products as loss leaders

PLAs are your online store window. Make sure you’re stocking your online store windows by featuring the right products in PLAs. Smart retailers are using query data to understand intent, and then tying PLAs to merchandising strategies such as loss leaders, top sellers, high inventory, and more.

Because PLAs have a higher new customer acquisition rate than text ads, high investments in PLAs (with the right strategy) will lead to more new customers.

And on December 25th, just when you think you have a break, the shopping continues. Online spending increased 36% on Christmas day from 2011 to 2012 as shoppers redeemed gift cards and purchased accessories for their new gadgets. Don’t forget to keep the lights on!

If you’re interested in more PLA tips, download our complimentary report, Four Advanced Strategies for Google Shopping.

Best of luck this holiday season! Don’t forget that your entire 2014 strategy is just as important as your holiday one. We’d be happy to help you with it. www.adlucent.com

 


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