Who Were The Big Winners Last Christmas?

As affiliates we could probably name a few of the merchants we promote and say that they expect those merchants had a great Christmas based on the level of traffic we sent them.

For me I did a nice amount with Woolworth's (Affiliate Window) and HMV (Buy.at) (amongst others). But why do I mention these two merchants?

Well there's three reasons. The first is that both had "fulfillment issues". Woolworths apparently couldn't get the stuff in and out of their warehouses fast enough. And (for me) HMV had serious issues by apparently taking orders for the Wii Console - despite not having guarenteed supplies but continued for far too long letting us send traffic to them (at our own cost) without knowing they'll be able to fulfill those orders for quite some time.

The second is the recent analysis by Hitwise that HMV and Woolworths had bumper traffic the last festive period.

Heather Hopkins, reported that, when looking at the top 100 retailers that HMV and Woolworths had very significant increases in web traffic year on year with Woolworths up a very healthy 26% and HMV up a stonking 58%.

HMV set me an email asking how I was generating traffic as it was a bit "unusual" whilst Woolies obviously couldn't convert the traffic I was sending them into fulfilled orders.

But I wonder how many other affiliates were sending these retailers good levels of traffic and how much did affiliates contribute to that huge increase in traffic over the previous Christmas?


The third reason I mention these merchants is that there's no point hiring affiliates, SEO gurus (cough), PPC experts, media buyers and offline marketing guys if you balls the fulfillment up!

There's an interesting report in The Guardian entitled "Woolworths confirms fears over festive trading". The title gives it away but one paragraph hit me:

Mr Bish-Jones (Woolworth's Chief Executive) said today that underlying sales in the six weeks to January 13 had remained in negative territory, falling by 4.6%. This compares with the 6.5% decline reported before Christmas.

and,

But the real problems came in entertainment, where it has been hit not only by fierce competition from online rivals and the supermarkets, but also by falling prices and the lack of major new releases.

but then you get:

Multi-channel sales at the group rocked by 204%, boosted by the successful launch of its Argos-style Big Red Book catalogue. But the higher-than-expected demand from customers pushed up delivery costs as the group laid on extra deliveries to meet orders in time for Christmas.

So sales were down in the entertainment area of the business but massively up in the Big Red Book part of the business.

So what does this teach affiliates?

• Just because you're promoting a big brand it doesn't mean that you'll have a trouble-free time promoting them;
  
• If you're promoting a niche product then you have to be constantly on the ball, checking your emails and constantly contacting the merchant and network to get information about product avaliability;
  
• If you're promoting a very high demand item such as the Wii Console then start early; get your PPC costs down before the demand really kicks in; don't be greedy and chase the sales that you're not guarenteed to get; and finally, don't be afraid to complain and publicly voice your concerns about poor campaign management.

But affiliates aren't the only ones that need to learn lessons from last Christmas. Merchants need to think about the huge risks that affiliates are taking. As a merchant, if you've got some affiliates that are sending significant levels of traffic, keep them happy and make sure you know in advance when their products are likely to go out of stock.

Hopefully next Christmas we won't have fulfillment issues, poor campaign management and unpaid commissions - wishful thinking I know - perhaps I'll just wish for not getting suckered next time!

Useful sites:
Trading still 'difficult' at HMV - BBC News, UK - 10 Jan 2007
MD steps down at HMV as trading remains 'difficult' - Guardian Unlimited, UK - 11 Jan 2007
City Column - There's little music in the ears of HMV management - Retail Bulletin, UK - 25 Jan 2007
Has Woolworths passed its sell-by date? - Scotsman, UK - 17 Jan 2007
Woolworths disappoints again - Hemscott, UK - 17 Jan 2007