Small U.S. online retailers used aggressive discounting, personalized advertising campaigns and social media to snag a healthy portion of the US$35B generated via online holiday sales, reports comScore

Allison Oesterle

LOS ANGELES , January 3, 2012 (Industry Intelligence) – According to market researcher comScore Inc., small online retailers snagged a healthy portion of the US$35 billion generated via online holiday sales in 2011 by using aggressive discounting, personalized advertising campaigns and social media, Internet Retailer reported on Dec. 30.

In order to combat larger online rivals such as Amazon.com Inc. e-commerce consultants reported that small, niche online retailers had to utilize responsive marketing and merchandising plans.

“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,” said Jim Okamura, a managing director with 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 Amazon.com.”

According to Howard Wyner, the CEO of fragrance retailer Scentiments.com Inc., Scentiments experienced a double-digit boost in its holiday sales, partly due to a new customer loyalty program that encouraged customers to promote it on Facebook and Twitter.

The increase in sales was also driven by targeted e-mail marketing campaigns and free or reduced-rate shipping. Annual online revenue in 2011 is expected to remain constant at roughly $15.8 million.

RugsDirect.com saw its holiday sales increase by 15% after launching a personalized email campaign, using Black Friday paid search advertisements, and offering steep discounts of up to 35% to 50% as part of its Black Friday promotion.

Laura Santos, a marketing manager with Envelopes.com, said that 2011 holiday sales increased by about 16% in comparison to the previous year, aided in part by free shopping offers.

Zachary Ciperski, a vice president with CoffeeForLess.com Inc., says that holiday sales went up by roughly 25% in comparison to the previous year.

CoffeeForLess.com’s marketing strategy included offering coffee-related accessories in order to distinguish the site from other e-retailers. Annual web sales in 2011 are expected to increase by approximately 15.6% to $18.5 million, up from $16 million in 2010,

“Our strategy this holiday season was to differentiate and not just sell a commodity,” said Ciperski, “We were successful by learning and trying new approaches.”

The primary source of this article is Internet Retailer, Chicago, Illinois, on Dec. 30, 2011.

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