EXCLUSIVE INTERVIEW

Shopster CEO Explains Why Timing Is Everything in E-Commerce

In the retail world, Black Friday has long been a red-letter day on the calendar. The Friday after Thanksgiving, while not always the busiest shopping day of the year, is notable for kicking off the mad dash toward the finish line of the holiday season.

In the world of e-commerce, Cyber Monday has quickly become its own virtual landmark. The Monday following Thanksgiving is known as the day when millions of shoppers return to the workplace after the holiday and starting their online shopping.

Even Cyber Monday is proving to be a very movable feast[[moving target this year??]], however. Web analytics firm Coremetrics is forecasting the peak of holiday sales will come exactly a week later, on Dec. 4, a date the firm has dubbed eDay, though Cyber Monday may still generate the most traffic to online stores.[[remove some of these links?]]

In fact, Coremetrics predicts sales on eDay will outpace Cyber Monday by some 19 percent, and that Cyber Monday won’t even crack the top five sales day of the imminent holiday season, with Monday, Dec. 11, Wednesday, Dec. 6, Tuesday, Dec. 5 and Tuesday, Dec. 12 all clocking more sales.

Ready for Anything

The exact date of the highest sales total is less important than having merchants ready for what’s coming, according to Sarath Samarasekera, the CEO of Shopster.com, which lets entrepreneurs establish e-commerce storefronts, often to sell goods from third-party providers.

Shopster’s experience from a year ago provides insight into how e-tailers can make simple changes over the course of the holiday season to capture the most sales possible, changing along with consumer behavior to maximize revenue both before and after the holidays, Samarasekera said.

The CEO shared his thoughts on the impending holiday season with the E-Commerce Times, suggesting ways for merchants to predict and react to consumer behavior as online sales continue to mature and evolve.

E-Commerce Times: How is business at Shopster now that you’ve been around about a year?

Sarath Samarasekera: We are still young, so we are still growing very fast. It’s hard for us to identify trends in our own business because we’re still in that early growth phase. But we’ve seen what’s happened to the merchants using our platform and we are seeing another strong season.

ECT: With the holiday season looming, and lots of talk about when the surges in traffic and buying will occur, what do you see happening in the days right before and after Thanksgiving this year?

Samarasekera:

We’re already starting to see a re-emergence of trends we identified last year. Things are very steady in terms of sales up until Thanksgiving week and then about the day before, everybody takes off for the holidays and it gets very quiet. But even on the holiday and the day after, you start to see traffic pick up, as people start to investigate purchases — but few people are buying. The presumption here is that people are surfing around and then are waiting until Monday, when they head back to work. Then they’re ready to buy because they’ve already done some of their deciding. Everybody tries to get the shopping to start earlier, both online and offline. That’s what’s made Cyber Monday such a big day in the past.

ECT: There’s been a lot of talk about online research leading to offline buying, but you’re suggesting that consumers are doing offline shopping and then buying on the Web more as well?

Samarasekera:

We’re definitely noticing a lot more offline researchers ready to buy when they come online. They want to see things, touch things, test them out in person, but they want to use the Web to make the final purchase. The result is that when consumers come online ready to buy, you can see them just going straight into that buying mode.

ECT: In terms of buying times, are the trends in e-commerce making it more similar to offline retail as the online channel matures? How does the shipping time factor into that?

Samarasekera:

I really think the distribution of sales is going to start looking almost exactly the same when you look at the holiday season. Even the shipping lag tends to disappear with certain kinds of models, such as the local distributor model where products can be sourced very quickly. Some of our merchants can deliver products within 12 hours of the order being placed. They don’t promise it, but it’s definitely possible within certain locations to actually get what you ordered online that same day. Still, once that guaranteed shipping date passes, primary sales online all but stop.

ECT: Beyond the drop off after the shipping deadline, how else do shoppers change their behavior as the season progress?

Samarasekera:

The other thing you start to see is people are not as discriminating as you get further into December. I don’t know if you’d call it desperation, but they are more ready to buy. You might see them pop onto two or three Web pages before they buy rather than visiting seven or eight or 10. They will find what they’re looking for, check another page or two to get a reality check — just to make sure the prices are in the ballpark — and then they buy. You can just about imagine them sitting there with a very long list, thinking they have to get this done.

We have a line of products that only Shopster merchants carry, a brand of sunglasses, and there are several stores that sell them. It allowed us to see where people were looking for products. Before Thanksgiving weekend, we could see that almost of all of those Web sites that carried the product seemed to be getting hit by all those shoppers. After Thanksgiving, they were only looking at one or two. They still want to know the price is in the ballpark, but they just need a couple pieces of information before they buy. It’s a reminder that the consumer sometimes values time more than the dollar.

ECT: In that scenario, what can a merchant do to ensure theirs is the site the shopper buys from?

Samarasekera:

This is where the free shipping option really works. People are willing to pay more for a product than they save in shipping. People will actually pay more to get free shipping. It doesn’t necessarily translate into the best buy, but there’s a strong psychological edge for sites that don’t charge people for shipping.

ECT: In that hurried environment, what can merchants do to ensure they capture the maximum sales possible?

Samarasekera:

You’ve got to provide the information people are looking for, and then make the trip to checkout as short as possible. It’s best if it can all be on one page. If someone is buying an iPod, make sure all the accessories are right there.

Don’t crowd out their main purchase with other options, though, you might actually cause them to surf somewhere else. You can actually hurt your own market by giving them too much to consider. It’s easy to overload a consumer, with too much stuff on one page. There’s a push to maximize real estate on Web pages, but it’s a risk that you will maximize the real estate but minimize revenue. Show them how to get to checkout quickly. If you want to upsell or cross-sell them, look for ways to do it that don’t slow them down.

ECT: If you had one piece of advice for merchants heading into the holiday season, what would it be?

Samarasekera:

The worst thing a merchant can do this time of year is have a delay on a product that someone buys. If you say 3 days, you can expect an e-mail asking where it is in 3 days 1 minute. During the rest of the year, the consumer will put up with some delays, and a merchant can actually get points from a shopper by letting them know if there’s going to be a delay and giving them a chance to opt out. But starting this week, no delay is acceptable. You are actually causing them to fail in one of their obligations and making them look bad in front the people they care about.

ECT: Shoppers are seeking more than just products, is that what you’re suggesting?

Samarasekera:

There is a strong emotional factor with gift-giving. As a merchant, you are helping someone fulfill one of their major obligations, to find the right gift. People have a lot of personal pride riding on succeeding at it.

ECT: Back to the issue of timing. Analysts say sales on Cyber Monday won’t top the charts for the season, but you still see it as a bellwether day.

Samarasekera:

You can see it in all the traffic numbers, starting very early that Monday, around 5 a.m. on the East Coast, it goes a little crazy. I guess there’s something about the Thanksgiving holiday that really kicks off the holiday season. It’s like people go online with that list of 25 gifts to buy and they start trying to check them off. At times, shoppers almost seem like a conveyor belt, just checking things off their lists.

ECT: You mentioned the shipping date drop-off, but that doesn’t mean the sales opportunities end just because Christmas comes and goes, right?

Samarasekera:

Right at the guaranteed shipping date there is a sharp drop off and sales just about drop to nothing for the main, primary items. For instance, a site that sells gaming gear might see sales of Xbox 360s come to a complete stop. But immediately after that, accessories start to become very popular. You also see people buying for themselves.

All of a sudden, the different ship to and bill to addresses stop and you start to see people buying things for themselves. Maybe they know they’re getting a camera and so they go online to buy a case. That stays strong all the way through January. There really isn’t much time for rest.

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