Google PLAs, Mobile, and Free Shipping Dominate the Holiday Season
If you turned on your television or browsed online news sites in the weeks leading up to Christmas, you couldn’t avoid the seemingly 24×7 coverage of the holiday shopping season. While retailers prepare for an influx of sales and new customers (the holiday season generates an average 30% of sales and 40% of profits for them), the media latches onto the stories of crazed Black Friday shoppers, delayed packages, and deeply discounted products. For us consumers, this season was all about the shopping experience. How can we fulfill our shopping lists in the easiest way possible, no matter where we are, and rest assured that we made a good investment?
This year we saw retailers cater to the needs of consumers by launching promotions as early as October, extending store hours (and even opening on Thanksgiving Day), improving the mobile shopping experience, and offering a variety of last minute shipping options.
When we reflect upon the season, a few key themes emerge―mobile, PLAs, and shipping.
Prior to the holidays, mobile only accounted for one percent of all commerce, but it continued to be a critical factor in sales as consumers use their mobile devices to research products, read reviews, solicit feedback from their social networks, locate nearby stores, find promotions, and more. In fact, 90% of consumers admit to using multiple devices before making a product decision (Google and IPSOS). Ahead of the holiday season, retailers made a big push to improve the mobile experience and increase clicks and conversions through mobile advertising.
We also saw more shoppers take to their smartphones and tablets than ever before. During the holidays, sales on mobile devices represented 28% of all online sales, up 40% over 2012. Mobile also accounted for an estimated 48% of web traffic (IBM). While there’s still more work to do to convert more mobile shoppers, it’s definitely a trend to watch out for in 2014.
2013 is the second year that retailers have leveraged Google’s Product Listing Ads (PLAs) as part of their overall advertising strategy. In fact, they were #2 on retailer’s top priorities going into the holiday season. Adoption, and competition, has grown significantly in the last year. The number of PLAs displayed in the month of November doubled over 2012 and the number of advertisers grew 55% to 8,700 (Jefferies). eBay, who refused to participate last year, accounted for 4% of all PLAs in 2013.
We saw PLAs continue to outperform text ads in impressions, clicks, and ad spend, while CPCs declined for both.
Consumers enjoyed an average 30-50% mark down on products during the 2013 season. While steep discounts were certainly an attractive offer, one promotion was the clear winner with online shoppers—free shipping. Over the Thanksgiving weekend (Nov 28—Dec 2), the most popular promotions on search ads contained a free shipping offer (38%), followed by a sale (34%) and free shipping with a minimum purchase (12%) (Search Monitor). In addition, over 800 retailers participated in Free Shipping Day on December 18th.
Adlucent data has shown that a lower sales price will typically outperform a free shipping offer for PLAs. In the case of paid search, a free shipping offer can provide a significant boost to click through rates when placed in ad text. If you’re offering free shipping for products appearing in your PLAs, try a test where you lower the product price by the shipping amount, and saving the offer for your text ads.
While the biggest holiday is behind us, the retail sales push will continue through January as consumers venture into stores to use their gift cards, exchange gift cards, and take advantage of deep post-holiday discounts.
As we saw this season, the retailers who succeed will be those who meet the needs and desires of each individual consumer. Over the years Adlucent has developed, refined, and extended its Applied Shopping Analytics platform, BuyerPath™, to help retailers learn more about their customers and apply these insights to today’s modern online advertising infrastructure. So how can BuyerPath help you in 2014? Visit www.adlucent.com to learn more.