Demandware 2010 Best Practices

©2010 Demandware, Inc. | www.demandware.com

Retail Practice Best Practices Guide


Executive Overview

Preparing for the holiday shopping season is an annual ritual that can’t be ignored by most retailers. To maximize results during this critical period, plans (and contingency plans) should be in place to ensure a positive user experience and financially beneficial interaction with each customer. Retailers should lever-age what’s worked in the past while taking into account important shifts in online customer behavior.

The 2009 online holiday shopping season was deemed a success by most of the industry. According to research by shop.org - eHoliday 2009: Post Holiday Survey Results - over 2/3rds of consumers made some portion of their holiday purchases online and over half made 50% or more of their holiday purchases online. Satis-faction with online shopping also remained high in 2009 with over 65% reporting being “very satisfied.” Most retailers reported positive key performance indicators as well. Site Conversion, Site Traffic, Email Conversion and Click-Through were all up while Cart Abandonment and Returns were either flat or down vs. 2008.

At the same time, the research revealed shifts in online shopper behavior that retailers should take into account for the 2010 holiday season.• Online customers were more deal focused and Average Order Values were down vs. 2008 – likely a result of the sluggish economy and consumers having less to spend.• Retailers saw more repeat customers than in previous years.• Customers placed their orders at different times than previous holiday seasons with more orders coming both earlier and later. There was also an increase in last-minute purchases – possibly driven by customers looking for late season deals.• Pricing and shipping were major factors in purchase influence as well.

Looking ahead to the 2010 holidays, retailers reported plans to invest in several areas to boost their results including:• Comparison shopping tools• Increased merchandiser assortments• Use of more planned loss-leaders to acquire sales• Deeper email segmentation• Increased usage of Social Media in marketing and promotion• New investments in mobile as a channel and marketing medium

This guide shares key considerations and actionable ideas to help you increase your opportunities for success in the 2010 holiday shopping season. Some are new and some are time-proven. You likely already have the foundation and infra-structure in place to implement most of them. A few may require additional up-front time and resources, but they will lay the foundation for important long-term gains. The key is to start preparing now. As always, Demandware’s Retail Practice team is available to discuss these opportunities and help you implement them.

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Planning and executing

the right promotions at

the right time is critical

to success in the short

window of the holiday

season.


Following are ten (10) critical considerations to help you prepare for the 2010 holidays. They range from promotion planning and merchandising to email and social media marketing to basic preparation. They are not all appropriate for every retailer, but there are probably several that can make a measurable difference this coming holiday season for every retailer. Find the ones that can impact your business and fit them into your holiday plans.

PromotionPlanning–TimingisEverything Planning and executing the right promotions at the right time is critical to your success in the short window of the holiday season. You need to balance recent history with new products and shopping interests. Below are some important considerations as you plan your promotions for the 2010 holiday season.• Look at your 2009 traffic and sales results. Which days were highest and why? According to shop.org, the highest grossing days for retailers overall during the 2009 holidays were Black Friday, Cyber Monday, Monday, December 14th and Tuesday December 15th. • Review your prior year promotions and strategies – what worked? Can you repeat the same strategies with success? What didn’t work? Why not? What can you change to increase your chances for success? • Highlight products with shorter ship times to extend the holiday selling period.• Free shipping is still powerful. It was the #1 reason for shopping online during the 2009 holiday season according to shop.org.• Highlight the advantages of shopping online during the holidays – especially those that provide you with competitive advantage: no sales tax, free returns, free shipping, free gift with purchase. These advantages can all be highlighted on your site using content slots.• Provide a bounce-back coupon in the shipment box; for example, for next purchase – online or in-store if appropriate. This offer can be included in your shipping confirmation email as well.

10 Critical Considerations to Help Maximize Sales and Profits in the 2010 Holiday Shopping Season

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• Free Shipping with Minimum Order threshold• Early Bird Thanksgiving Sales• Black Friday Sales• Cyber Monday Sales• Cross-Channel Promotions (e.g., $10 off your next in-store visit)• Promotions to encourage repeat visits (e.g., Gift Card with $75 purchase)• Weather related-conditions (use Demand- ware Active Merchandising® to customize

the site to promote specific products to shoppers in certain climate zones)• Charitable donation tie-ins where appropriate• Lunch-time specials• Loss Leaders to drive overall site traffic – use merchandising to increase average order value once on your site• Time-sensitive promotions to encourage sense of urgency

Holiday 2010 Promotion Ideas


• Start early and stay late – customers start holiday browsing in the fall. Give them a strong reason to come back when it’s time to select and purchase their gifts. According to shop.org, 33.9% of holiday shoppers made purchases in the last two weeks of December.• Have a backup plan. Not all your holiday promotions will be home runs and time is critical. Make sure you have planned back-ups that can be implemented quickly to capitalize on the increased holiday traffic. • Don’t forget about your Sale and Clearance section. Think beyond your standard product categories. Customers are still price conscious. This gives you the opportunity to liquidate product with the additional holiday traffic. KeyFunctionalitytoLeverageinDemandwareeCommerce:• Utilize the Demandware Promotion Scheduling functionality. Set it up in advance, test with the Demandware Storefront Toolkit, tune it in the Business Manager Campaigns and Promotions section as needed, let it run and forget about it. • Use Active Merchandising® to target your key customer groups – for example, provide exclusive promotions for past purchasers of a specific category or display a welcome banner for your top referring domains.• Geo-target – for example, have a promotion ready for inclement weather conditions. Create a content slot that displays based on the customer’s location.• Target Repeat vs. New Customers. Retailers saw an increase in repeat visits during the 2009 holidays. Through Active Merchandising and content slots, make the repeat customer’s experience more relevant; e.g., if the customer showed an affinity to sale products, display a sale promotion to them.

Merchandising-MakeGiftingEasy

Merchandising and gifting are important at any time of year, but never more so than during the holidays. Make sure you are doing everything you can to optimize your site for holiday gifting. GiftCenters/GiftGuides• Create Gift Centers specific to different recipient groups: For Him, For Her, For Teens, etc. Link to a dedicated landing page for each, or add a specific Gift Recipient filter for the holidays with a special price range filter.• Segment Gift Centers by price. Be prepared for price sensitive shoppers during the holidays. Overall spending decreased during the 2009 holidays. Make sure there is ample inventory in key products at key price points.• Highlight sale items, bestsellers and favorites to give customers gift ideas.• Promote Gift Centers on your homepage, in your emails and on other appropriate pages.

WishLists• Add a Wish List promotion in 2010.• Create a Wish List email.• Add Wish List to the Gifts page.

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2

Free shipping is still

powerful. It was the #1

reason for shopping

online during the 2009

holidays.


GiftCards/GiftCertificates• Promote on home page, in emails and “no result” search pages.• Create Gift Card promotions – e.g., Free Gift Card with purchase of specific items or a set minimum dollar amount.

SetsandBundles• Put together gift sets and bundles for ease of purchase. This can also drive up average order value and gross margin.

SiteSearchOptimization• Look at your previous year’s performance and your top products for this year. Test your top search terms to return quality results. Make sure you tune search to promote this year’s top products or forecasted products to the top. Make the most of your search tools in Business Manager (e.g. synonyms, search redirects) to optimize your onsite search results.• Review your “no search” results from last year. Use search redirects to point shoppers to special gift pages, new arrivals or special promotional products. Use synonyms and hypernyms to point shoppers to similar products, especially those you want to promote. Always show them something to keep them engaged on the site. • Make the most of the “no results” page to market your Gift Card and/or Gift Center. • Review your sorting rules strategy. Give prominence to your core holiday products in your search results and category pages.• Review your search results more frequently—even daily—especially at the start of the holiday period to identify trends early enough to capitalize on them.

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Demandware Product Compare feature

Demandware Storefront Tool Kit

Make sure you are

doing everything you

can to optimize your

site for holiday gifting.


KeyFunctionalitytoLeverageinDemandwareeCommerce:• Use Active Merchandising® to optimize and supplement your current sorting rule strategy. Better yet consider editing your global sorting rules to promote special holiday products.• Consider using Search Placement Codes and Search Rank to move all holiday promoted products to the top of both category pages and site search results.• Enhance your active data through Active Data feeds. For example, import your customer ratings to create new sorting rules or product collections. This will insure that the most popular products shoppers are buying will be highlighted everywhere on the site. • Utilize the Product Compare feature to make it easy for customers to compare items on your site to facilitate their decision making.• Utilize Sets and Bundles functionality to put together gift sets/bundles for ease of purchase, driving up average order values and gross margin.

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WhatConsumersResearchedandPurchasedOnlineDuringthe2009Holidays*

Item% Consumers

Researching Online% Consumers

Purchasing Online

Apparel, accessories, shoes / footwear 32.2 36.4

Music, video, DVD 32.1 31.4

Consumer electronics 27.8 17.4

Books 25.3 26.7

Toys 20.2 19.5

Video games and game consoles 18.0 15.1

Computer hardware & peripherals 14.4 7.7

Appliances and tools 14.3 7.7

Food, fruit, gift baskets 11.1 9.4

Jewelry 11.0 9.6

Gift Cards, Gift Certificates 10.6 12.2

Sporting goods and apparel 10.4 6.9

Fragrance and cosmetics 9.5 7.7

Home, garden furnishings 8.3 10.8

Computer software 7.5 4.7

Pet products 7.2 4.9

Event tickets 5.4 4.6

Using active data feed to create a Customer

Favorites sorting rule

Make the most of your

“no search” results

page – market your

Gift Card and/or Gift

Center.

*From the Shop.org eHoliday 2009 Study


SEO&SEM–SearchPays

Organic and paid search yielded half of paying customers to online retailers during the 2009 holiday season according to the shop.org post-holiday survey. Leverage this source of highly qualified shoppers in 2010.• Review your SEO (natural search) results from Holiday 2009. Which terms drove business to your site? What new terms do you need to consider for 2010? Create specific landing pages with SEO content banners to improve your rankings and results. • Update your SEO data with holiday-centric messaging. • Review Demandware’s SEO Best Practices. Make sure your site is verified, your sitemap is submitted to Google and your robots.txt file is in place.• Review your SEM (paid search) campaigns and results from Holiday 2009. Update with holiday messaging and promotional offers and create landing pages and special offers for the search traffic.• Add in holiday-centric keyword campaigns.

KeyFunctionalitytoLeverageinDemandwareeCommerce:With the catalog export feature in Demandware Business Manager, you can easily export your SEO data (save a copy), make changes to your top products, and upload. After the holiday, just upload your saved copy.

Email–Re-engageYourList

Email marketing can be a highly efficient and strategic way for online retailers to reach their customer base. The holidays are no exception. According to shop.org, email to existing house lists was one of the most effective marketing tac-tics for online retailers in the 2009 holiday season. There is no reason for this to change in 2010. To optimize your email efforts: • Segment your email list by geography, type of customer, interests, etc. to appeal to their different gift interests.• Encourage return visits by including offers in ship confirmation emails.• Highlight Gift Centers and Gift Cards in your holiday emails.• Have emails ready to target local events like the weather. If it is snowing in the Midwest, send an email to encourage shoppers to avoid the roads and shop from the comfort of their home or office.• Have back-up campaigns ready in the event an email doesn’t perform. • QA your emails! With the increased activity and number of emails sent, the chance of errors is greater. Have a CSR or resource in another department review and test your email links and copy for any issues. You don’t want to be the retailer with the “Oops! Our mistake.” email. • Review Demandware’s Email Marketing Best Practices.

KeyFunctionalitytoLeverageinDemandwareeCommerce:Utilize source code functionality to trigger email-exclusive promotions or price books.

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Mobile–AnEmerging ShoppingChannel

Mobile is becoming an increasingly important channel, especially with younger shoppers who depend on mobile media to satisfy their social, information and shopping needs. Ac-cording to ABI Research, in 2009, consumers spent about $1.2 billion on goods and ser-vices purchased via their mobile phones and the market is expected to reach $2.1 billion by the end of 2010. Many industry analysts expect extensive mobile campaigns for the 2010 holiday season. If you are considering leveraging mobile in 2010: • Focus first on using it to make your site more convenient and accessible for your customers. • Ensure a seamless cross-channel experience from online, to in-store to mobile.• Consider expanding your holiday marketing to include text messaging campaigns.

KeyFunctionalitytoLeverageinDemandwareeCommerce:The Demandware Mobile Cartridge is available on the Demandware XChange portal. Several Demandware clients have already used it to launch mobile commerce sites including Barneys New York, Columbia, Crocs and Nine West.

SocialMedia–EvolvingSlowly

Mainstream shoppers are slowly beginning to find retailers through blogs, Face-book, Twitter and other social media applications in 2010. This was not the case in 2009. At the same time, retailers are encouraging their customers to show off their purchases via social media to create buzz and word of mouth. They are also rewarding fans and followers with special promotions. Like mobile, the primary users here tend to be younger shoppers. They also have different usage patterns with social media than other online mediums. For example, prime time usage is 9 p.m. to 1 a.m. Retailers should evaluate how widely social media is being used by their target audiences and how well it fits their business model.

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Barneys New York Mobile Store

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6Many retailers leave

their sites vulnerable

to failure during the

holidays due to funda-

mental customer service

and performance

management issues.

Nine West Facebook Post


CustomerSelf-Service–IncreaseSatisfaction andLowerCosts

As in years past, consumers prefer self-service via site search and FAQs to other support options such as phone, email and chat. An effective self-service ca-pability empowers your customers to complete their online orders and answer questions on their own and is far less costly than even the most efficient agent-enabled phone call, email exchange or chat session. There are certain self-service capabilities that are more important during the holidays to streamline interactions for both the online customer and the retailer:• Provide order tracking information (including tracking number from carrier) to put the customer in control and reduce the number of calls into your customer service department.• Create easy-to-find Holiday FAQs. • Review your product content to ensure the customer has enough information to make a purchase. Include size charts, fit guides, and common customer feedback (e.g., “This runs big.”) on your product detail pages. • Create urgency and action with clearly stated holiday ship deadlines and Best Gift Tips; e.g., “If ordered today the items on this page can be delivered by 12/24.”• Promote Gift Wrapping during checkout. • Utilize Saved Shopping Cart and extend standard duration to increase customer convenience. • Have an online survey intercept – giving real-time voice to the customer instead of them calling to voice frustrations or not voicing at all. Use this feedback to identify customer pain points and site issues early. You can highlight successes as well.

KeyFunctionalitytoLeverageinDemandwareeCommerce:• Utilize content slots to keep customers informed of shipping deadlines. For example, each day schedule a content slot to show the remaining days for guaranteed holiday delivery.• Extend your shopping cart duration within Business Manager.

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Demandware clients and developers have access to an extensive library of integrations between best-of-breed third-party technologies and the Demandware® eCommerce Platform, including campaign management, imaging, order management, payment man-agement, personalization, PIM, product ratings and reviews, social commerce and more. Pre-built integrations remove the hurdles of development time and cost and accelerate time to market. These complementary capabilities can drive site traffic, influence purchase and can be in place before the holidays. Review the LINK marketplace for capabilities that can assist your efforts for the 2010 holidays.

Expand Your Site Functionality Quickly and Easily – Demandware LINK Partner Program


Post-HolidayPlanning-Don’tWait

The period immediately following the holidays is also important, but it’s easy to put plans aside in the rush to get ready for the holidays. Avoid last minute prepa-ration and sub-optimal results. Have your campaigns planned and ready to take advantage of shoppers that are on vacation, have time to shop and are anxious to use Gift Cards and Gift Certificates immediately following the holidays. Plan your site merchandising in advance and change your product sorting rules as appropri-ate to capitalize on opportunities to move high-inventory items.

TestYourReadiness-BeforeYourCustomersDo The holiday season is obviously of extreme importance to online retailers, yet many still leave their sites vulnerable to failure during the holidays due to funda-mental customer service and performance management issues. It is easy to get caught up in the planning and execution, but remember your customer. Take the time to test your promotions, top search words, and common paths. Make sure the customer has a seamless shopping experience - and that the experience is what you intended. If you are using Demandware eCommerce, you can use the Site Preview capability to preview the site experience at any future date per customer group.

Here are some additional items to keep in mind:• Test your promotions and QA your pricing. Inaccurate promotions and pricing will erode your margin and potentially cause significant call volume (in and out) for pricing mistakes. Like your emails, consider using an additional resource – like a customer service rep – to help QA pricing and promotions. • Staff up for your big online days – Black Friday, Cyber Monday, etc. Review previous years’ online traffic and sales history to hone in on your peak shopping days.• Educate your customer service department on all promotions, hot products, inventory stock-outs, etc.• Review technical stats to make sure the site is ready to withstand the increased load expected during the holidays. Anticipate performance issues. If you are already on the Demandware eCommerce platform, you don’t need to worry about these issues.

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Post Holiday Sale Additional 50% OFF

Organic and paid search

yielded half of paying

customers to online

retailers during the 2009

holiday season.


Planfor2011–While2010IsStillFresh Plan to conduct a post-mortem immediately following the 2010 holiday shop-ping season. Successes and stumbles are fresh on the mind - from promotions to workflow processes. Learn from yourself. This makes planning for the next holiday season easier and you can get started sooner.

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©2010 Demandware, Inc. | www.demandware.com 12

Summary

To maximize results during the 2010 holiday shopping season, look to leverage what’s worked in the past while taking into account important shifts in online customer behavior. Below is a quick reminder checklist for your 2010 holiday planning: • Time your promotions carefully. Online shoppers browsed earlier and bought later during the 2009 holidays.• Make gifting easy and visible for shoppers. Highlight Gift Cards and Gift Certificates. • Leverage pricing and free shipping to appeal to value-conscious shoppers.• Promote loss leaders to drive traffic to your site.• Don’t forget your existing customers. Re-engage with your email list and look for new ways to segment.• Update your organic and paid search efforts. Include holiday-centric keywords and campaigns where appropriate.• Evaluate ways to test and expand the use of social media and mobile in your marketing efforts. • Prepare for post-holiday shopping before the holiday season.• Test the readiness of your site before your customers do.• Start planning for the 2011 holidays as soon as the 2010 holiday season ends.

You likely already have the foundation and infrastructure in place to implement most of these ideas. The key is to start preparing now. • Share this guide with your colleagues. • Re-evaluate last year’s holiday results against the ideas in this paper.• Identify opportunities for improvement. • Plan and execute. • Contact your Retail Practice CRM at Demandware if you need more information.

Kristyn Levine is a Solution Strategist in Demand-ware’s Retail Practice Group. With over 14 years of experience in retail merchandising, online marketing, technology product management, and team develop-ment, Kristyn supports Demandware customers in the deployment and optimization of the Demandware platform.

Prior to Demandware, Kristyn served as the Ecommerce Marketing Director for Time-Life.

Her ecommerce responsibilities included vendor relationship management, online merchandising and marketing, operations, analytics, team develop-ment and strategic planning. Kristyn also held key ecommerce positions with Downtown Ecommerce Partners, Lillian Vernon, figleaves.com and GSI Com-merce. Kristyn has an MBA from Virginia Tech and a B.S. in Business Management from Auburn University.

About the Author


AboutDemandware,Inc.The trusted, global leader in on-demand ecommerce, Demandware revolutionizes how businesses deliver customized shopping experiences to consumers in the digital world. Only Demandware com-bines the on-demand ecommerce platform rated #1 by industry analysts, an open ecosystem of part-ners that extend the value of the platform, and measurable commitment by its employees to enabling client revenue growth. Demandware continually sets industry standards for market innovation and client satisfaction. Demandware clients include industry leaders such as Bare Escentuals, Barneys New York, Columbia Sportswear, Crocs, Frederick’s of Hollywood, Hanover Direct, Jones Apparel Group, Lifetime Brands, Michaels Stores, Panasonic, Playmobil, Reitmans and Theory. The Retail Practice team at Demandware is dedicated to helping clients grow their online revenue. Retail Practice has three key areas of focus: revenue growth, retailer advocacy and industry thought leadership. The team consists of ecommerce industry experts across many different verticals with more than 100 years combined experience. Retail Practice members are product specialists skilled in the features/functionality of the Demandware application and know how best to optimize for revenue growth. The group’s expertise also extends to defining end-to-end solutions which includes merchan-dising, marketing (acquisition and retention) and design. Retail Practice team members are champions for the long-term value each client represents to Demandware, and act as the conduit in and between Demandware clients and the community.

© 2010 Demandware, Inc.

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Demandware 2010 Best Practices