Online, seasonality doesn’t change – much The Internet is changing the marketing world, but one aspect it doesn’t seem to affect much is seasonality. Direct marketers with e-commerce channels are finding that their selling periods wax and wane in rhythms similar to those of their traditional businesses. That’s especially true as online consumers grow to resemble their offline counterparts. But it appears there are some subtle differences from terrestrial life when it comes to time and the Internet.
“I would say all indications are that they [online and offline seasonality] basically mirror each other,” says Sean Kaldor, vice president of e-commerce at NetRatings, Milpitas, CA, which tracks online traffic and sales.
Kaldor suggests that online sales seasons may be even more pronounced than offline because “you don’t have groceries [and other staples] to level it off. You’d find an extremely consistent pattern with toy sales online to toy sales offline.”
“As far as we’re concerned I don’t think it’s changed our seasonality much,” says Bob McNutt, president of Collin Street Bakery, Corsicana, TX. “We make a gourmet fruit cake, which is quite naturally in most demand at Christmas.”
McNutt says that the 104-year-old bakery does 90% of its business in the fourth quarter and that hasn’t changed in recent years. “We built up the tradition of holiday gift giving over many years. As far as sales are concerned that is the gift-giving season.” Collin Street has had what McNutt calls a “serious Web site” for three years, but an online presence for longer than that.
David Hochberg, vice president of public affairs for Lillian Vernon Corp., Rye, NY, says that the company’s big seasons are Christmas and Halloween and that remains so online.
1-800-flowers.com, Westbury, NY, has experienced a shift in its seasonality but for a singular reason: Because of the Web, the company has expanded its product offering so far beyond floral that for the fiscal year ended last June (when total sales were $385 million) 40% of its sales were for nonfloral items. (The tagline on its Web site is “Flowers are just the beginning.”) New items include candy, toy bears, jewelry, collectibles and gourmet gifts.
It is typical for a 1-800-Flowers phone representative to suggest to a customer a number of floral arrangements, but the Internet allows the company to display products. Director of communications Ken Young says the fourth-quarter holiday season “has never been on par with our spring quarter and now it’s right up there with Mother’s Day, which has always been our biggest quarter.”
The National Retail Federation/Forrester Online Retail Index measures, on a monthly basis, the growth and seasonality of online shopping and finds similar seasonality patterns online and off.
James McQuivey, research director of Forrester Research, Cambridge, MA, says that last spring he looked closely at Mother’s Day patterns and didn’t find any divergences. Online flower sales went from $49 million in April to $64 million in May, which is typical of their offline patterns. In another example, airline ticket sales jumped from about $680 million in October to $1.1 billion in November. “That’s completely correct, that’s commensurate with leisure airline ticket buying for the holiday season,” McQuivey observes.
Most marketers say that the Web has changed expectations in the sense that online buyers do tend to place their orders closer to the holiday. “The online business comes later and in a more condensed period,” says Jim Paschal, president of OmahaSteaks.com. “People procrastinate when sending gifts. Online is the ultimate for people who procrastinate. The good thing is since it’s online you can handle the volume as long as you have the infrastructure and systems built up.”
The Web has also changed the timing of the traditional marketers’ businesses in being able to contact their customers more often via e-mail. For example, when Omaha Steaks.com has extra inventory it can offer its customers a special deal in a matter of days, a tactic that would take weeks with regular mail.
“Online marketers may have more tools at their disposal to cost-effectively attempt to smooth their sales,” says John Prunier, president of Petsky Prunier, a New York-based investment bank focused on the DM industry.
Regina Brady, vice president in the Stamford, CT, office of e-mail service provider FloNetwork, says that her company’s major e-commerce clients’ e-mailing patterns to their customers appear to be more consistent than what you’d expect in postal mailings. For this year (benchmarking at the end of each quarter), second-quarter mailings were 17% above the first quarter; the third quarter was 32% above the second quarter; and the fourth quarter was 74% above the third quarter.
Brady suspects that this is happening because of e-mail’s cost effectiveness and because the lists are growing in size. Her clients are contacting customers about twice a month, she adds. She also sees heavier e-mail volume in the last week of the month – possibly to make up for any shortfall in that month’s sales.
Network
