EcommerceBytes-NewsFlash, Number 2669 - November 08, 2011     5 of 5

Online Sellers Use Word-of-Mouth and Facebook for Holiday Marketing

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Small online sellers are using a number of low-cost methods to reach shoppers this holiday season according to a new survey from Alibaba, which also found sellers are not planning to offer heavy discounts.

Word-of-mouth marketing is the number one way merchants will reach holiday shoppers (45%), followed by social media (42%), email marketing (34%), online advertising (33%) and coupons (14%).

In terms of holiday discounts, most sellers said they are offering discounts of between 10% and 20%. Larger discounts will be very rare this year: only 3% of the sellers planned to offer discounts of more than 30%. The holiday discounts will start in mid-November and run through early December, but will drop sharply after mid-December.

B2B marketplace Alibaba.com surveyed 1,268 online merchants who have 10 or fewer employees between October 26 and November 2, 2011; a majority of respondents sell in the collectibles, fashion, and home and electronics categories.

Facebook is the most popular site for those using social networking sites (61%), followed by Twitter (21%) and YouTube (13%). Four out of 10 respondents say they don't use social media at all, and three-quarters of those who use Facebook use the fan page to promote their products and have not used other advanced features such as Facebook ads.

The survey found that sellers plan to drive holiday sales by offering free ground shipping (47%), expedited shipping (43%) and discounts (43%). Other popular tactics include offering limited-time deals (28%) and updating website design (25%). Only a very small percentage will partner with popular group buying sites (3%).

While 69% of respondents said they had not designed or customized their own products, a few are currently working on ideas, and some respondents also expressed a desire to explore a new niche market to try new products that will attract budget-conscious customers. Overall, 70% of sellers surveyed had changed their product offerings either drastically or moderately in the past year to follow market trends and customer needs.

Linda Kozlowski, Alibaba's Director of Global Marketing and Customer Experience, said despite global economic woes, the spirit of entrepreneurship is not flagging in the U.S. - "which is good news for consumers and the market as a whole," she said.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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