It makes sense that Christmas Central generates about 60% of its annual sales in the fourth quarter in the run-up to Christmas.
Roughly $14.3 million of the retailer’s $23.8 million total in 2016 web sales came in the final three months of the year, according to Internet Retailer’s Top500Guide.com. On Black Friday alone, Christmas Central generated $60,000 in revenue in one day. Three days later, on Cyber Monday, it had $108,000 in sales, says Dan Karyczak, the holiday retailer’s marketplace coordinator.
The retailer starts planning in March to gear up for its most important sales season.
In mid-June, Christmas Central launched its redesigned website, which included a new look and navigation structure. The retailer hopes it will boost sales as much as 10%.
The main update to the e-commerce site involved overhauling its site search. The search box now has predictive results that display keyword options and specific products as a shopper types. Because the retailer has more than 100,000 SKUs, navigation via categories can be extensive and shoppers tend to lean more on the search box, Karyczak says.
“It can be overwhelming to look at all the categories, even for me,” he says. “Just browsing around is great, but if you are looking for something specific, it was a little much to go through.”
For its marketing strategy, Christmas Central plans to allocate the largest share of its ad budget to paid search and Facebook’s desktop right-rail ads, Karyczak says.
The retailer, No. 620 in the Internet Retailer 2017 Top 1000, is testing how much it costs to market to different customer segments with Fourth of July promotions (Christmas Central sells pool and patio furniture as well). For example, Christmas Central is targeting consumers who have previously made a purchase, abandoned their cart or who have engaged with the website in a certain way, such as spending more than 10 minutes on the site or viewing more than three pages, to see which group is more likely to covert. The retailer also is testing segments of types of searches, such as consumers who search more broadly versus consumers who type in an exact model number.
The results from the retailer’s Fourth of July ads will help Christmas Central determine if it should funnel more ad dollars toward a particular segment during the holiday season, Karyczak says.
Christmas Central, which is a division of manufacturer and online retailer Gordon Cos. Inc., plans to bid the most on keywords for products it manufactures itself, because it makes higher margins if the shopper purchases that item at ChristmasCentral.com as opposed to Amazon.com Inc. (No. 1), where the retailer also sells its products.
Online marketplaces play a large role in Christmas Central’s holiday strategy. Almost 80% of the retailer’s web sales are off of marketplaces, with Amazon accounting 60% of that total, Karyczak says. Even though Karyczak prefers if shoppers buy directly from Christmascentral.com, he knows that more than half of all shopping searches start on Amazon.
“Visitors are already there, so you’ve got to make sure you are being seen by them,” he says.
Last year, Christmas Central ran a Christmas Holiday campaign with Amazon’s sponsored products ads that generated $50,000 in sales. It cost the retailer about $6,300 to run the campaign, or 12.6% of the sales, Karyczak says. In general, the retailer is happy with ad campaigns that cost less than 15% of the sales they generate, he says.
With that in mind, Christmas Central plans to increase its spending on Amazon’s sponsored products ads this year. “[The ads] worked, that’s why we are doing them again,” Karyczak says. “Last year it was just done at a very basic level and we are getting more in-depth with them this year.”
For example, last year Christmas Central bid on general keywords such as “decor,” and this year it wants to bid on products that are more specific such as “pinecone wreaths.”
The retailer is evaluating its best-selling holiday products now to plan which products it wants to focus its ad spend on. “If you get sales say in June and July for a product, it’s probably going to do all right come Christmastime,” Karyczak says.
Plus, the retailer will look at previous holiday seasons to see which keywords drove traffic to specific products.
Christmas Central also sells on smaller marketplaces, such as Bonanza, iOffer Inc. and eCrater, for additional sales that come with lower fees than Amazon, he says.
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