Drive and Convert (Ep. 044): How To Attract Customers This Holiday Season (2021 Edition)

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About This Episode:

The 2021 holiday season is here, but recent events have made it so that paid acquisition can no longer be considered the “easy button” when it comes to attracting potential buyers to your store. As a result, many brand owners are scrambling to figure out how to generate site traffic effectively and affordably.

In this episode, Ryan and Jon talk about the macro trends that are going to influence consumer behavior and what savvy brand owners should do to make the most out of their holiday campaigns. If you’re worried about supply chain issues, record-breaking ad prices, or increased competition from big retailers, then you should listen to this.

Listen to the full episode if you want to learn:

1. What economic trends are influencing consumer behavior
2. How to stay competitive as ad prices increase
3. How to separate yourself from big box retailers like Amazon and Walmart
4. Which strategies are going to drive qualified traffic to your site this year

If you have questions, ideas, or feedback to share, hit us up on Twitter. We’re @jonmacdonald and @ryangarrow.

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Episode Transcript:

Announcer:
You’re listening to Drive and Convert, a podcast about helping online brands to build a better e-commerce growth engine with Jon MacDonald and Ryan Garrow.

Jon:
Ryan, good to see you today as always, last episode you interviewed me about Black Friday Cyber Monday, and the chaos that is coming and how to kind of prepare for it if you will a little bit, and thinking about on-site experiences. And I really want to ask you today and have a chat about the traffic side of things, because talking about chaos, it has been chaos, all the iOS updates and just the trends and Amazon and Walmart hopping back into buying ads, screwing everyone else’s bids up. And so, I think there’s just so much to be thinking about that we had decided to split it into two episodes and so today it makes a lot of sense to talk about traffic. So, what’s the big storyline of holiday 2021? And your worldview?

Ryan:
I’ve wished there was a consistent, we know exactly what our storylines going to be but there are so many crazy variables, because normal prep for holiday is, “Let’s look at last year’s holiday. Let’s look at what we’ve done so far this year and figure, okay, so far we’re seeing this trend so we can probably project that onto holiday. And then we can generally prepare based on that”. You can’t really do that in 21. I mean, 2020 was generally pretty easy to make money. There was less competition, there were stimulus checks all over the place. Now we’re running out of stimulus money, there is a bunch of people that made money last year that are going to expect to make a lot of money this year. We have less money to spend and we have a lot more competition from very large budgets and then you compound on top of that.
Inventory issues, shipping issues. I mean it has all the makings of absolute e-comm chaos coming in. And so, I think every industry or vertical within e-commerce will probably have a little bit of a different storyline, but the punchline is, the biggest players are probably going to win this holiday season. If you’re a smaller business, you have to get very, very scrappy. So in a lot of the data we’re seeing, well we’ll make some assumptions, I guess for this, let’s just assume you’ve got inventory. Like if you’re listening to this podcast and you don’t have inventory, you’ve got problems and this probably is not going to have a lot of, help you much with getting inventory.

Jon:
Yeah. Hit stop now and go to China and start carrying stuff back manually, because you’re not getting a shipping container at this point. Right?

Ryan:
No. At this exact moment, when recording this because we are preparing a little bit for this, it’s point companies, if you’re a smaller toy company, you just can’t get a container right now. And Hasbro and Mattel have enough market share or pull that the shipping companies are paying attention to them and not smaller toy makers. So my wife and I are actually strategizing of how early we’re going to be buying toys and how do we make sure we get the right ones for kids not to be disappointed. So, it seems like every year in the e-comm world, generally in holiday, it gets earlier and earlier. And I think this year is no exception but it’s probably even accelerated. I was in Costco last week, this was in August where I was in Costco, Christmas stuff is up and kids aren’t even in school yet and they’re selling Christmas things. If I use Costco with my barometer of how early things can get. They usually jumped the gun early but I mean there’s not even Thanksgiving, I hate that we go from Halloween to Christmas and miss Thanksgiving which is my favorite holiday.
So all that to say, from a traffic perspective, you probably can’t be starting early enough. If you’re listening to this and you haven’t started, you’re behind at the end of the day, you need to be building audiences, you need to be incentivizing people to buy now versus wait. Last year we had USPS, UPS, FedEx, all completely maxed out as in, UPS and FedEx told some large clients of ours, “Sorry, we can’t take any more orders. We’re done.” Even if you had inventory, you couldn’t sell it or ship it out, you couldn’t get it to people. And so, there is every incentive in place to get a sale now versus wait. So my first point will be, go and be aggressive right now, wherever you’re hearing this go now, and don’t wait, just start advertising, leverage those email lists, right now.

Jon:
So are you thinking along the lines of driving traffic right now and spending your whole holiday budget or as much as you can afford to spend now, versus maybe just doing something like saying, “Hey, this is the best offer you’re going to get for holiday shopping” and just go all out now and say, “Hey, we’re not waiting for Black Friday Cyber Monday, we’re doing it now and we encourage you to do it now too” from a bystand point for the consumer and trying to get that messaging across. It’s interesting, I’ve been seeing news sites have articles up about, “Hey, do your holiday shopping early.”
So I feel like the message for the consumer is getting out there, but I’m hearing even from operators and news publications that are e-commerce specific. Right? So, one that I love to follow is 2:00 PM, as a director consumer newsletter, Web Smith is great and it’s interesting, he keeps tweeting like every week, have you bought your holiday gift show? If not, you’re late, get on it. So I think it’s really interesting. We’re going to see a lot of that type of stuff coming up and, but I do think consumers are hopefully getting the message, which there’s still FOMO though, that they’re not going to get the best deal because they’re waiting.

Ryan:
Yeah. So, I mean you’re basically at this exact moment you’re gambling. You’re either gambling that you need to get it sold now, or you won’t be able to sell it, or you’re going to flip that and say, “I’m going to bet on everybody else running out of inventory, so I’m the only one left at the end.” And you might be the only one left, December 17th, but if there’s no way to ship it in time, it doesn’t matter if you have inventory. You just can’t get it there. That’s the gamble you’re looking at. And so if it’s me, I’m worried about the large advertisers and their Powder Keg of ad budget, vaporizing me as a smaller advertiser later in the holiday season. The larger the company, the more rigid they are based on when they can spend their money.

Jon:
You’re saying that if you’re smaller, spend your money now because they already have a budget for Q4, but they’re not going to be willing to spend it now essentially?

Ryan:
Yeah. So the larger the business and brand, generally, they have to stick on their fiscal quarter budget and promotion schedules and those get decided a long time ago, and they can’t go back to the CFO and be like, “Hey, so that $2 million we were going to spend on cyber five, we’d like to spend it in October.” Say if I was like, “Sorry, that doesn’t fit in your budget. Can’t do it.” It’s staying there in that fiscal quarter so we can have our budgets aligned correctly with what our ad forecasts are. And then the promo schedule, that gets set in stone, you have marketing, it has to create all these creatives and do all these things that have to go on in order at these large companies, and there’s just not a lot of flexibility. So you know the big players have already decided, they usually decide in May, June with Google and all these other things in play, what their plan is going to be? When they’re going to deploy ads? What’s their expected return? All that stuff.
And so as a smaller advertiser, you have this flexibility to say, “Hey, I want to eat up the market before those things get deployed. And since everybody’s talking about it, in September, October, about by August by early, by early, by early. That wasn’t the case back in May when large budgets were decided. Well, January, they decide the budgets and then the cadence for holiday and the promos and everything get decided generally, May-June. That’s back when we thought everything was great and COVID didn’t exist anymore and the whole country was opening back up. We were all traveling and spending money on restaurants, now we’re back in lockdown. It’s just all kinds of terribleness right now with this Delta variant. So, leverage that to your advantage if you’re smaller advertiser. And small is going to vary for more people [inaudible 00:08:46] You’re small if you have the ability to change directions right now, as you hear this and say, “I want to put something together right now to execute tomorrow.” That means you’re smaller and you should do that.

Announcer:
You’re listening to Drive and Convert, a podcast focused on e-commerce growth. Your hosts are Jon MacDonald, founder of The Good, a conversion rate optimization agency that works with e-commerce brands to help convert more of their visitors into buyers. And Ryan Garrow of Logical Position, digital marketing agency offering pay-per-click management, search engine optimization and website design services to brands of all sizes. If you find this podcast helpful, please help us out by leaving a review on Apple podcasts and sharing it with a friend or colleague. Thank you.

Jon:
So for companies that have to drive traffic like these smaller brands, right? They don’t have the brand awareness that the massive ones do. What is that going to look like for them right now?

Ryan:
Competitive. So again, last year we had Amazon and Walmart, two of the largest advertisers on the internet, pull back on their ads, big time. I mean, Amazon couldn’t pump volume through their system, so they just said, “We have to take what we already have, we can’t add to it.” which they generally do on Google. I think, I don’t know exact numbers, but I’m pretty confident amazon is the largest advertiser on Google. They spent a disgusting amount of money. Well, they pulled back something through 19 to 20, over a quarter of their budget, and there was like four months, three-four months where they just didn’t even advertise.
They just couldn’t send anything through their system. They have now exceeded what they were spending before by a pretty big amount. Their numbers we’re seeing or looking at is somewhere around 30 to 33% up over 2020 as of right now, and they just keep getting more aggressive. Walmart is way up in their planning to pump more volume through their system to compete with Amazon. So when you have these large budget, large product inventory. Amazon also has a huge group of associates they call them, which is basically their affiliate network.

Jon:
Right.

Ryan:
They get paid to drive all this social and other traffic from around the internet to their system and they get paid for it. And so, you have massive influence in driving a lot of traffic. So there’s huge amounts of competition for eyeballs coming from very large players. And so, small players know that there’s a lot of increase in CPCs. We’ve seen anywhere depending on your industry from 20 to 50% increase year over year at this point, and then going into holiday, I expect that to ratchet up because you’ll have a lot of businesses that aren’t listening to this, that are not trying to capture early share of the holiday season, and they’re just kind of taking their last year plan and say, “Well if that worked well, let’s do that.” And that’s just not going to work. There’s not as much volume pumping through the system from an e-commerce perspective this year, we’re not going to be stimulus. I don’t think, I mean, I can always get surprised, but last year we had big stimulus checks and landed right in the middle holiday that really juiced it.
I think you had, the number I saw was 8% increase year over year for holiday sales. We might hit an increase in sales volume, but I think it’s more from an inflation perspective with less actual transactions happening online.

Jon:
Yeah. There’s still that child tax credit that’s been going out, I’m hearing a lot about. It’s only a couple of 100 a month in a lot of the cases, but it does hit every month. Right. And so, there is a little bit of stimulus there perhaps for a large portion of the US population, so I do find that interesting and I think that’s still the case out there, but I do think that you’re right and that the challenge is going to be the massive players. Amazon has planes, they have their shipping lines across. Right. I mean, that’s not going to be an issue for them. Walmart’s the same thing. They own the entire supply chain for themselves for the most part. So, really it’s you who’s relying on getting your stuff into a container and on a ship, that’s going to be an issue.
So, buying ads for that is really risky business at this point. I’m hearing from a lot of brands we work with, “Hey, we don’t know what we’re going to have for inventory and when we’re going to have it, because I don’t know when I’m going to be able to get my stuff off of a boat.” I heard something about one of the world’s largest shipping ports in China, now has something like 200 ships waiting to dock and unload and normally there might be one or two at most in line and they had to shut down because they had one COVID test in the docks, but they can’t maintain space with the dock workers, so they shut down the entire port for two weeks. And so, that’s creating a massive backlog at a really bad time for a lot of companies. And then I did hear that the Ever Given Ship, the one that kind of clogged up the canal and the whole shipping lines across the country, was going through the canal again, coming up here very shortly. So, we’ll see if that creates another issue. That will be funny [crosstalk 00:13:50]

Ryan:
The huge domino effect. Even like the largest port on the west coast is LA I think, and they’ve got massive backlogs of just things that were coming in for the summer, now those are coming in for fall. Like, okay, we need holiday things, not summer things. Lots of obvious issues that can’t be necessarily controlled from an e-comm brand at this exact moment. So, you’ve got your horse, you’re riding it. Facebook is not going to be the same as it was last year. I mean, iOS has for sure changed that at least for the foreseeable future and so-

Jon:
Which is interesting because I keep hearing from, I think I even heard it from you at one of our conversations, a few episodes ago that, “Hey, Facebook is smart. They’re going to figure this out. They have to figure this out.” We’re going on months where they still haven’t figured this out. So I’m not really sure what they’re going to do, but I don’t see a solution. They’re not saying, “Hey, we’ll have a solution out by this date.” They’re just silent, as far as I’m understanding.

Ryan:
Yeah. There’s been nothing [crosstalk 00:14:54] And we even have really high up relationships who we’re like, “Can you give us anything.” Like no, silence. And so, what I’m hearing from a lot of brands is, “Well, we’ve got to find new sources of traffic. We’ve got to get on TikTok, we’ve got to get on Pinterest, got to get on Snapchat.” So they’re seeing these shiny things out there in the e-commerce space like, “That’s the next one. We got to go get it.” And unfortunately they’re not there. I mean, Facebook is still going to perform better than TikTok for most brands. And if you’re going to go leverage influencers on TikTok, maybe you have a better shot, but just a cold like, “You don’t know me yet, but you’re on TikTok and here’s my cool video. Come buy something from me.” It’s not going to work. So a lot of brands, and this is not every marketing team and brand owner wants to hear this, but most brands rather than jumping way up the funnel into TikTok and just brand awareness, probably need to step on the gas on Google shopping.
And that might be something I say more often than most anything else. Get more aggressive, lower your return on ad spend and go on shopping, capture those people as they’re in their research phase, have a remarketing list. The more you spend on Google shopping, the more the halo effect hits your organic and direct traffic as well. So, push harder there because you step up that funnel. Yes, the conversion rate will generally lower as you get more aggressive, but they’re still going to convert at a better rate than a TikTok user clicking to your site on an ad. And so, understand where you fill the funnel and where there could be potential gaps within your marketing spend, if you will.

Jon:
Yeah. What kind of messaging are you seeing? Obviously with shopping, there’s little messaging you can do on Google shopping, but if you’re running ads or even promotions or things of that sort, what kind of messaging do you think would perform well? Do you think going back to the conversation a few minutes ago around, “Hey, this is the best deal you’re going to get throughout the holiday.” Are you seeing any of that stuff play out right now?

Ryan:
I haven’t seen it yet. Doesn’t mean it’s not happening. I think brands really need to leverage their existing database. So email needs to be hit very tactfully, but aggressively.

Jon:
So the owned data [crosstalk 00:17:14] the first part of the data that you don’t have to pay more for.

Ryan:
You know these people bought from you in the past. They’re more likely to buy from you again and you know what they purchased so you can somewhat be creative in how you’re getting a new product in front of them based on the past history. I would not be at all afraid of giving a discount in email right now because it’s going to be way less expensive than buying them on ,even brand terms potentially, on Google or Yelp. If they go to Google, you have a potential of losing them. Whereas, if they’re in your email, that much higher likelihood that they’re going to be buying from you.

Jon:
Interesting.

Ryan:
Leverage your audiences. And so, if you’ve got remarketing lists of audiences of people that have been to the site, that have converted in the past, just make sure you have your RLSA lists put in place on Google to be more aggressive on people that you know something about, that have more likelihood to buy from you because they bought in the past.
Many brands can spend money on high level brand terms when those people have already bought from you before. So if you sell water bottles or drinking vessels, and you’re a smaller brand, you might have to play on some longer tail terms like, double wall stainless steel black water bottle. Whether it’s very specific, you know you can compete on that because that’s what you have. Whereas if they’ve already bought from you in the past, maybe it was a year, maybe it was two years ago, even three years ago and they’re just looking for a water bottle. That term may not make sense as a smaller advertiser because there’s not as much intent around that, they’re just looking for a water bottle, you have no idea what they’re looking for, but it may make sense because of what you know about them already.
And there’s already an affinity for your brand because they’ve purchased from you before. So again, on that vein of getting more aggressive, you may be able to if you’re layering on email and really targeting past buyers, be able to do a special friends and family kind of Christmas in October type thing, that can try to get people early into the brand. I wouldn’t be at all surprised if like an Amazon did something like this. They pushed their prime day back into June, to try to hit numbers for Q2 and they still missed numbers. So I’m guessing Q3 numbers are not going to be great for them because they lost prime day this year. So it could be that they’re going to try to do something early Q4 to really get ahead of the curve and smoke some competitors in October. I mean, I wouldn’t put it past Amazon as aggressive as they are, to really aggressively go after people twice in one year.

Jon:
Yeah. Why not? Especially with the Delta variant in the lockdowns and things of that sort happening now. It’s quite interesting. So yeah, this is all to me, it seems like two things, if I could summarize. One is, if you’re a small player, use that to your advantage. Right? Use your nimbleness to your advantage and start thinking about what you can do to get around these big players who aren’t going to move, and who are going to just dump all this cash in Q4 like they normally would, but now you’re going to have a lot more challenges with that. So, use your limited spend in the best way you possibly can and be nimble about it.
And then second is, figure out your inventory because that’s a huge concern and it’s going to be a bigger issue and if you haven’t figured it out already, you might likely just be up to creek without a paddle, as they say. Right. So, I think there’s a couple of things to be thinking about for sure. And that’s really interesting to me that you suggested dive in into shopping. I think that’s something I hear from you quite often, but I don’t hear a lot of people promote in the same way. And so, that could be a really great angle to take as well.

Ryan:
Yeah. And I think when you’re looking at shopping, data feed becomes more important, especially as times get more competitive. And so you may have the same products, but if you’re just using the free Shopify plug-in, for example, it’s just taking your titles and descriptions from Shopify and making that your titles and descriptions in Google. That may work great for your site, but it may be terrible for Google shopping. And so you may need to test and manipulate that data to see if you can change the title. If you steal descriptions on Google shopping is the only place within Google that I know of where you can keyword stuff, legally, if you’re not doing that, shame on you. Take advantage of it. The simplest little changes on title can make a big difference on click through rate. So do some searches, look at what your competition’s titles are, because they’re truncated.
So you’re going to see certain things that maybe you can jump on your competitors just to have, they’re too large, or they don’t pay attention to their feed. The first 10 characters of their title on Google shopping, is not going to cause people to want to click on that. And so if you are the competitor with that same product and Google knows that your click through rate is higher, you’re going to get a big benefit from that. And so be testing and measuring that now to see what your click through rate is based on how you change your title. That’s all the title is going to do. It’s not going to impact your conversion rate. People don’t care what they clicked on three seconds ago, it’s the site that’s going to do that and that’s where you talk to Jon, but the titles are going to help on the click through rate.
Also images, your images if you have the same image as everybody else, you may be able to take some better pictures of certain products or different angle that’s going to stand out in a sea of everybody else has the same exact standard image from my manufacturer. That’s always something I would be testing to try to stand out as a smaller advertise. What are the things that you can do that maybe your competitors aren’t thinking about or that can possibly give you the slightest advantage? Because that small advantage can be magnified pretty extensively through Google and Google shopping.

Jon:
That’s great. So, Ryan, in summary, I heard you say earlier that Thanksgiving is your favorite holiday. What is your favorite dish?

Ryan:
It’s always a Turkey because I get to get creative because I get to do whatever I want to the turkey every year. And so, I’ve been smoking the turkeys lately. Man, that is just heaven on earth. I haven’t gone the deep fryer yet and I really want to try that, but I’m probably going to smoke one this year and put one in the oven and do just two different ones and then-

Jon:
I heard you paid as a turducken fan for some reason?

Ryan:
That’s just, I’m a simple man Jon. It’s just, maybe if there was a steak stuffed in there, like a little tenderloin stuffed in that might be something I can try. That may have worked.

Jon:
Well, Ryan, thank you for your time today. This has been great. Hopefully we’ve created a sense for folks to prepare for chaos, but hope for normal.

Ryan:
Yeah. And whatever normal looks like, it could be various things, different parts of the country who knows, but stay safe. There will be the key.

Jon:
Yes. All right. Thank you Ryan.

Ryan:
Thanks Jon.

Announcer:
Thanks for listening to Drive and Convert with Jon MacDonald and Ryan Garrow. To keep up to date with new episodes, you could subscribe at www.driveandconvert.com.