Massive Inefficiencies Will Disrupt Search Campaigns, Retail Holiday Sales

Thanksgiving Day store closures and an increasing number of mobile searches with fewer clicks to purchase could make it an interesting holiday buying season this year.

Some retail stores that have historically kicked off Black Friday sales on Thanksgiving Day have decided to remain closed, but one retail expert from Purdue University says this could have negative consequences on this year's holiday sales.

Closing the doors will force consumers to search for goods online, but from what I see not all retailers are ready to handle additional purchases and shipments. In addition, many consumers now rely on their mobile smartphone as the computer in their pocket, but mobile ecommerce has not caught up to desktop in terms of ease of use and convenience.

Marketers still have data in silos and many lack the attribution models required to pull together this complicated world of cross-channel targeting. One key findings from the Shopper Marketing: The New Rules Of Engagement study suggests that for marketers data strategies are still goals and not yet a reality. Some 35% of marketers admit their organizations have a data strategy in place, but it isn’t a embraced throughout the company, and 23% said no strategy exists at all. 

Research also confirms that consumers and their mobile phones have become inseparable, which continues to drive growth for paid-search advertising, but it also suggests the connection will slow growth for ecommerce holiday spending.  

Advertisers spent more for paid-search ads to run across mobile networks and serve up on smartphones, according to equity firm Raymond James, which points to third-quarter 2016 numbers from Kenshoo. In fact, spend rose 62% and clicks increased 64% year-over-year (YoY), representing more than a third (35%) of total spend. Overall, spend and clicks rose 11% YoY.

“While it may seem like a family-friendly and nice thing to do for employers to close or reduce hours, it is shortsighted and may have unintended negative side effects,” Richard Feinberg, a professor of retail management and interim head of the Department of Consumer Science, said in a prepared statement.

Feinberg argues that there is ample research to suggest that profit typically exceeds the cost of opening the store and that some employees like working extended hours during the holidays to earn extra money. Purdue research suggests this might apply to more than 50% of the employees.

A growing list of national retailers have announced that they will remain closed Thanksgiving Day, including Home Depot, Costco, T.J. Maxx, Lowe’s, Staples, Sam’s Club, Neiman Marcus, Barnes & Noble, Hobby Lobby, Dillard’s, Ikea, PetSmart, and Bed Bath & Beyond among others. Marketers can find a list here.

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