Christmas in October: Pros & Cons of Early Holiday Sales

by Monica Eaton-Cardone on Oct 3, 2016 12:00:00 AM Digital Marketing, e-Commerce, Retail, Support Services

Christmas_in_October_Pros__Cons_of_Early_Holiday_Sales-484645-edited.jpgAt this point, it’s somewhat of a cliché to comment that “the holidays just keep getting earlier each year.”

This year, the holiday shopping season crept right up into the end of the back-to-school season, with Walmart releasing its “25 Hottest Toys for the Holidays 2016” list on September 1. Now we have to ask—what are the benefits to retailers to continue pushing holiday shopping earlier, and is there a downside?

Pros: Earlier Sales Mean More Data, Supplemental Marketing Techniques, and Increased Customer Loyalty

Retailers rolling out their holiday deals earlier in the fall have a greater opportunity to capitalize on the consumer bonanza.

  • Starting the sales season earlier gives merchants time to isolate developing trends in the run-up to the more high-volume months at the end of the calendar. This enables merchants to be better prepared in terms of inventory availability.
  • Early sales provide an increase in the amount of available consumer data. Analyzing this additional information regarding consumer preferences and behaviors helps merchants create more effective sales strategies later in the season.
  • Budget-conscious consumers appreciate the extended shopping season. These positive impressions translate into customer loyalty.
  • Merchants stand the chance of repeat purchases. Shoppers who buy early in the year have time to make additional purchases before the holidays arrive.  
As a result, we see the holiday sales creep earlier and earlier into the calendar each year. The pre-holiday sales begin right after Labor Day as a way to test the waters, with “Black Friday” transforming more and more each year into “Black November.”

Cons: Disguised Trends and Threats

While spreading the holiday season across a longer period of the calendar can offer more insight into consumer trends, it may also make other trends more difficult to spot.

Big shopping days like Black Friday and Cyber Monday are notorious for fraud attacks. Fraudsters capitalize on the high volume of transactions, hoping their activities will go undetected. Normally, merchants can anticipate these increased threats and plan accordingly.

In situations like these, fraud detection is often based on patterns; projections from the previous year can strengthen defenses in the current year. However, with the shopping season stretched longer, big sales deployed with less consistency across the board, and a dynamic sales cycle from year to year, it is more difficult to detect fraud trends.

Optimizing Fraud Detection During the Holiday Season

How can merchants optimize the holiday sales season while maintaining fraud detection vigilance with less consistent data?

  • Use Multi-Layer Fraud Protection: Everything from card security codes and address verification to delivery confirmation and 3D Secure can help defend against the various fraud sources.
  • Monitor Transaction Velocity: Be wary of a high volume of transactions coming from one particular IP address or cardholder, as this could be a sign of fast fraud. Criminals will try to hide a higher number of unauthorized transactions among the increased orders made by legitimate shoppers. Later, these high-dollar items will provide the most resell potential.
  • Take Note of Suspicious Sales Spikes: Of course, merchants’ transactions will increase during the holiday season; however, unexpected sales spikes could signal fraud.
  • Manage In-House Teams: In-house fraud teams may need to add additional workers to compensate for the increase in sales volume. Onboard these individuals quickly, but thoroughly. Make sure the customer service department is fully optimized with an intimate understanding of holiday specials, as well as the return policy.

Balancing Risk Versus Reward

There is no absolute answer as to when retailers should consider the holiday season officially “on.” The answer will vary depending on the merchant’s situation and needs, as well as what the merchant believes will be more beneficial in the long run for the business.

However, merchants who decide to embrace earlier holiday shoppers need to also embrace a fraud prevention plan, or else face risk factors from an unpredictable range of sources.

Photo by Supertrooper/FreeDigitalPhotos.net

Monica Eaton-Cardone is Co-founder and COO of Chargebacks911.com.

Monica Eaton-Cardone's blog
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The statements, opinions, and advertisements expressed on the ERA Blog and other online entities owned by the Electronic Retailing Association are those of individual authors and companies and do not necessarily reflect the views of the Electronic Retailing Association.