While Thanksgiving 2019 is a couple of months away, the competition for holiday revenue is already underway. Consumer confidence is high and with 76% of consumers preferring to purchase gifts online last year, digital shopping will continue to be a competitive market across all industries. As such, brands have to recognize the importance of online shopping and adjust their sales and marketing strategies to that channel. In this article we look at:
Consumer insights from Adobe Digital Insights
Thoughts about competing with retail giant Amazon
Online shopping trends and statistics
Projected trends for the 2019 holiday shopping season
Consumer Insights
Insights from consumer online shopping trends from November 1 through December 31, 2018 can be useful in guiding your brand’s ecommerce and marketing strategies all year long. Adobe Digital Insights (ADI) looked at more than 1 trillion visits to U.S.-based retailers during the 2018 holiday period to better understand how consumers are shopping and buying online. The following are four key findings:
THINK BEYOND THE HOLIDAY SEASON
The 2018 online holiday shopping trends show that year-round loyalty strategies help drive online purchases during the holidays. ADI attributed 50% of online holiday revenue to marketing tactics like paid search, email, and social that directly impacted the customer journey. The other 50% of revenue came from tactics like direct traffic and natural search. Adobe’s findings emphasize the importance of year-round exceptional service both online and at physical store locations to put your brand’s name at the forefront of consumer’s minds when the holiday shopping season rolls around.
A ROBUST ONLINE PRESENCE IS COMPULSORY
Consumers are comfortable buying online and many actually prefer to do their shopping from home or on the go. The 2018 online holiday shopping revenues saw a 16.5% increase from the previous year, reaching over $120 billion. For the first time, the average daily online revenue was over $2 billion with the highest day for online sales being Cyber Monday and the lowest day Christmas Eve. As online sales continue to grow more quickly than overall retail sales, brands need to establish a strong and engaging online presence.
MOBILE FRIENDLY IS A MUST
During the 2018 online holiday shopping period analyzed by ADI, smartphones accounted for (51.4%) of all online visits during the 61-day period. This was the first time that smartphone use surpassed desktop use for online holiday surfing. Online sales made via smartphones also saw an increase from 24% in 2017 to 31% in 2018. In addition, ADI found that Christmas Day continues to be the most phone-centered day of the season accounting for over 60% of online visits and over 40% of revenue.
A COMBINATION OF ONLINE AND IN-STORE HAS ITS ADVANTAGES
Shopping trends for retailers with only an online presence differed from brands with both an online store and physical location. ADI’s analysis found that retailers with both physical locations and online stores saw a 50% increase in the usage of buying online with a pick-up in store option. That being said, consumers choosing this route tended to have fewer items in their basket than those who shopped completely online. Getting customers through the door for purchase pick-up, however, offers additional opportunities for retailers to upsell. ADI also found that online-only retailers had lower cart abandonment than brands with a physical location. Consumers were 44% more likely to complete their orders with an online only retailer which may be due to the higher likelihood that those customers are utilizing a desktop to shop.
Competing with Amazon
Amazon had more traffic on Cyber Monday 2018 than Walmart, Target, Best Buy, Kohls and Macy's combined. So, it is no surprise that many retailers are looking for ways to recapture some of the sales going to Amazon each year. Digital operational excellence is a priority as we head into the holiday season as are these four strategies that can help brands realize sales increases and put themselves in a more competitive position.
PERFECTION FROM START TO FINISH
In order to compete with the machine that is Amazon, retailers have to ensure perfect execution of all of their customers’ orders during the holiday season. Consumers can be unforgiving when it comes to website crashes and late deliveries. Their dissatisfaction is only fueled by the ability to amplify their experiences via social media platforms. Brands should test their website during the buildup to and throughout the holiday shopping season. Popular items need to be generously stocked and employees trained to deliver exceptional customer service.
START EARLY
The most effective holiday strategy will start in early November and extend through December. Some consumers are over the hype of Black Friday and Cyber Monday shopping – they aren’t interested in the physical crowds and potentially slow websites. Brands should take advantage of the fact that consumers are seeking out additional holiday shopping opportunities. Leverage shoppers’ interest in Small Business Saturday, offer preview sales, or feature midweek deals to drive customer traffic throughout the entire season.
FOCUS ON BLACK FRIDAY
Instead of going head-to-head with Amazon on Cyber Monday when its conversions grew 86 percent, brands should consider focusing in on Black Friday to springboard their holiday season efforts. Especially for those with a brick-and-mortar location, Black Friday is a day that consumers will still line up outside shops to get the best deals possible. Door-buster deals can help build foot traffic as can a strong promotion of same-day online purchase/in-store pick-up options.
CATER TO LAST MINUTE SHOPPERS
Retailers can learn from Target’s 2018 holiday season which saw a greater than 60% increase in its click-and-collect business. Other retailers that offered click-and-collect through Christmas Eve in 2018 saw an average increase of 52 percent in online traffic and conversion rates. While Amazon sees a slow-down during the five-day window prior to the Christmas holiday, brands with brick-and-mortar locations can realize an increase in business by catering to last minute shoppers. Consumers who know they can’t count on shipping their last-minute purchases and still have gifts arrive in time will appreciate the option of buying online and collecting their items at your store to make sure everyone receives their gifts on time.
Online Shopping Trends and Statistics
FACTORS THAT ENCOURAGE ONLINE SHOPPING
A poll by Salesforce Research found that consumers tend to prioritize their shopping experience over many other factors. The poll results show following were indicated as the most important factors for online shopping:
Customer product reviews: 72%
Checkout speed: 75%
Intuitive site navigation: 75%
Pricing: 80%
Website performance: 76%
Easy search capabilities: 78%
EMAIL MARKETING
Email marketing offers brands excellent opportunities for segmentation and customization of their messages. While it’s true that emails are easily deleted, they are an inexpensive way to convince consumers to buy from you and increase your conversion rate. The 2018 industry average for percentage of sales through email for the time period from Thanksgiving to Cyber Monday was 24%. That’s a solid return on a simple and cost-effective means of engagement marketing.
CYBER 5
The five days from Thanksgiving Day to Cyber Monday are known as the Cyber 5 and offer the highest indicators of year-over-year gains. Here are data from 2018 showing the scope of the growth:
PROMOTIONAL OFFERS
In its holiday retail survey, Deloitte found that 95% of people think that price discounts are the most appealing promotional offers.
SHIPPING
The Deloitte survey found that the second most appealing feature a brand can offer is free shipping (75%).
EARLY SHOPPERS ARE BIGGER SPENDERS
All though we mentioned earlier the idea of catering to late shoppers, we should mention the correlation between when shopping begins and how much is spent. Hands down, early shoppers outspend late shoppers. From the Deloitte survey, here is the breakdown of average 2018 spending:
Before November: an average of $1,769
On or after Thanksgiving: an average of $1,309
Days leading up to Christmas: an average of $1,284
After the holidays spend an average of $1,620 (maybe a bit of guilt-induced increase?)
Projected Trends for 2019
PHYSICAL STORES ARE GAINING LOST GROUND
Brick-and-mortar locations are even more important to today’s shoppers than originally thought. Salesforce surveyed shoppers and discovered that every generation, including millennials and Gen Z, prefers a physical store when making a purchase. The difference is that consumers no longer expect a simple transactional experience when visiting a store. They want an experience that makes them feel like part of the brand community and will embrace retailers that embody that longing.
BRAND EXPERIENCES
As we just mentioned, retailers that offer meaningful values and experiences will find the most success this holiday season. In its State of the Connected Customer Report, Salesforce found that 84% of customers say the experience a company provides is just as important as the products and services it offers. Relevancy, high-quality customer service, targeted messaging, and unique in-store experiences will be some of the keys to increased conversion rates.
IN-CHANNEL BUYING
Now, more than ever before, retailers need to be ready to meet their shoppers where they are whether it is on social, messaging, or gaming platforms. With 64% of consumers using multiple channels for single transactions, brands want to make sure their customers can complete a purchase whenever the mood strikes them and not have to wait to be funneled from where they are to a brand’s website and ecommerce platform.
To Summarize
Consumer insights from Adobe Digital Insights
Think beyond the holiday season
Offer a robust online presence
Mobile friendly is a must
Leverage the combination of online and physical location if you can
Thoughts about competing with retail giant Amazon
Perfection from start to finish
Start early
Focus on Black Friday
Cater to last minute shoppers
Online shopping trends and statistics
Understand the factors that encourage online shopping
Utilize email marketing
Focus efforts during the Cyber 5
Use promotional offers and free shipping to help seal the deal
Know that early shoppers will be bigger spenders than late shoppers
Projected trends for the 2019 holiday shopping season
Physical stores are gaining lost ground
Brand experiences are of utmost importance
In-channel buying is a convenience that brands need to offer
The experts at Strategy Driven Marketing are ready to help your brand prepare for the holiday season. We would love to learn more about your business so we can help you plan and execute an effective and engaging holiday marketing strategy that will let you stand out from your competitors and maximize your revenue potential. Contact us today to get started!