Small e-retailers win holiday sales

December 30, 2011 09:53 AM

In an online holiday shopping season that generated at least $35 billion in sales for web retailers according to comScore Inc., not all of the revenue went to the big guys.

In fact, by concentrating on their best customers, using social media and offering highly targeted incentives, many smaller niche web merchants also closed out the online Christmas shopping season with a nice boost to their fourth quarter sales.

But to drive more sales over the holidays, smaller web merchants also had to be nimble and make constant updates to their marketing and merchandising plans, say e-commerce consultants. “For the smaller web retailers, the holidays were all about driving traffic and working on the advantage that they had the inventory and product knowledge that the bigger companies didn’t,” says Jim Okamura, managing director of Chicago retail consulting firm Okamura Consulting. “They had to constantly leverage their best assets to keep telling shoppers who they were and why shopping their boutique site was better than”

At, No. 446 in the Internet Retailer Top 500 Guide, the innovative use of social media tied to a new customer loyalty program helped holiday sales increase by double digits, CEO Howard Wyner says. Around mid-December, introduced its first-ever customer loyalty program. But in addition to rewarding customers who signed up for the program with points that could be redeemed at certain levels of accumulation for $10 off orders valued at $60 or $20 off orders of $100, the online fragrance retailer’s “Sentury Club” loyalty program gave members up to 10 additional points each time they included in updates to Facebook and Twitter conversations. In the first two weeks more than 2,000 shoppers signed up for the loyalty program and expected to end December with about 3,500 members. About 500 loyalty program members included in their holiday conversations while active on social media, Wyner says. “We thought it was important to reward members for being social,” he says. “As a niche retailer it’s important to try and stay ahead of the curb during the holidays.”

Other incentives such as offering free and reduced-rate shipping and sending targeted e-mail marketing messages to shoppers over the long Thanksgiving weekend also helped to increase holiday sales for, which expected  total e-commerce revenue for 2011 to remain flat at about $15.8 million. “We were pleasantly surprised by our holiday sales,” Wyner says. “There have been some tough economic currents to swim through this year, but we stayed focused this Christmas on price, shipping and our product selection.”

For other niche web retailers, including (No. 375) and (No. 460), the keys to a successful holiday selling season included the strategic use of free shipping and catering to early-bird shoppers. Normally,, which carries  more than 70,000 types of area rugs, wouldn’t start a big holiday sales push until the Christmas shopping season was in full swing. But holiday sales this year increased by nearly 15% in part because for the first time targeted online shoppers on the Friday after Thanksgiving, also known as Black Friday. targeted web shoppers earlier than ever before, after convincing several major rug manufacturers to offer steeper products discounts earlier. “Normally the discounts we could pass along to consumers averaged out to between 15% and 20% but we were able to get those discounts up to 35% to 50% for our Black Friday promotion,” says director of marketing Rex Creekmur. “Getting bigger discounts from rug manufacturers is very hard to do, but we were able to convince them that holiday shoppers are out there early these days and we had a chance to drive more sales by having a big Black Friday event.”

To generate traffic, launched personalized e-mail campaigns in the week before Thanksgiving and developed Black Friday paid search campaigns. The result of a bigger and earlier marketing push, coupled with steeper discounts, helped increase sales on the Friday after Thanksgiving by 40% compared with the previous year, Creekmur says.

Getting to web shoppers early and often, especially with free shipping, helped increase holiday sales in 2011 by about 16%, says marketing manager Laura Santos. In 2011 extended its offer on free shipping on orders of $250 and higher into November and December; in previous years, the company offered free shipping only in early fall, she says. To generate business with more of its repeat customers, also updated its Holiday Shop, a designated section of the site that features templates and options for holiday-themed printing orders such as envelopes, with more content on how to make the right selection. “We got the word out that we are the specialists in helping consumers and businesses prepare their holiday printing materials early and thoroughly,” Santos says.

In order to be successful this holiday shopping season, small web retailers needed to be unique in their approach to merchandising, says Danielle Savin, vice president of multichannel retail and marketing at e-commerce technology consultants FitForCommerce. “The niche merchants that drove the most sales over the holidays were the ones that really tried to mix commerce and content,” she says. “The big winners in sales showed online shoppers they had the prices, inventory and product knowledge that made them better to shop than the bigger brands.”

To stand out from other sites that sold staples such as coffee and tea, (No. 441) developed a merchandising strategy to offer more accessories such as reusable filters, cartridge carousels and storage baskets for coffee makers from Keurig and other brands., which expects its total web sales to increase about 15.6% to $18.5 million in 2011 from $16 million in 2010, also created about 10 holiday gift sets that web shoppers could purchase as last-minute gifts and stocking stuffers.

As a result of developing and selling new lines of accessories, holiday sales at increased by about 25%, says vice president Zachary Ciperski. “Our strategy this holiday season was to differentiate and not just sell a commodity,” Ciperski says. “We were successful by learning and trying new approaches.”




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