It’s no surprise that ecommerce has seen incredible growth over the last few holiday shopping seasons, but soon we will see Internet sales exceed those of brick and mortar stores during this very spend-heavy time of year. According to Deloitte, for the first time ever, when it comes to purchasing holiday gifts, American consumers’ most likely destination to shop is the Internet.
The official kick-off for the holiday shopping season in the US is Thanksgiving Day weekend. From 2008 to 2012, the United States saw a 31% increase in total sales, both on and offline, during the five-day period (Thanksgiving Thursday through Cyber Monday). Between 2011 and 2012, online sales increased 15%, whereas brick and mortar sales increased by a mere 3%. Based on this very positive trend, the 2013 shopping season is sure to produce an increase in overall sales, but more appropriately, continued growth in online shopping.
Trends to Expect this Holiday Shopping Season:
- Showrooming. This is the act of using one’s mobile device in-store to search for an item across the Internet at a lower price. This is an obvious disadvantage for brick and mortar stores, clearly benefitting ecommerce. According to an Accenture study, almost half of those surveyed said that the primary purpose for their cell phone use in-store was to compare prices. Of those, only 10% purchased the product in question at the brick and mortar store.
- Promotions. This year’s holiday shopping season will be significantly shorter than usual, which is thought to put digital retailers at an advantage, as consumers will seek the convenience of online shopping in a condensed period of time. But this also makes competition among ecommerce brands greater, encouraging more offered promotions in order to gain as much spend as possible in a shorter than normal time period.
- Mcommerce Growth. US retail mobile commerce throughout the year will reach $41 billion, up 68.2% compared to last year and by 2016, mobile transactions will account for a quarter of all retail ecommerce. The 2013 holiday shopping season is predicted to see 19% of all consumers making purchases on tablets and 18% on smartphones – in 2012, 15% of consumers bought items on their tablets and 14% on their smartphones. This reinforces the need for marketers to really amp up their mobile efforts as more and more of their customers are looking to the convenience of mobile online shopping.
- Contrasting views regarding growth or decline in holiday spend. The government shut down prompted speculation that consumers would be hesitant to spend more this holiday shopping season than last year. However, the Google 2013 Holiday Shopping Intentions Study revealed that Millenials will spend 19% more this year than they did last year. Looking back, we have only seen an upward climb in spending, even during the recession, making it highly unlikely that sales will dip this holiday season.
In the meantime, brick and mortar stores are on the defensive and are attempting to regain lost business by increasing their operating hours over the weekend, including Black Friday openings as early as the evening hours of Thanksgiving Day! Many have invested heavily in mobile apps and advertising to accommodate in-store shoppers.
Aside from the convenience of online shopping, brick and mortar stores lack the personalization that consumers have grown to love within the digital space. In order to compete, many department stores have begun to adopt and implement the aid of mobile apps, ads and resources to tackle this obstacle. The 2013 holiday shopping season will reveal the successes of those efforts.
At the end of the day, it is inevitable that we will see growth in consumer spending during the upcoming holiday shopping season. It will be interesting to reflect on the how the above trends impacted that spend, as well as the distribution of spend between online and offline outlets. It is more important than ever for ecommerce and traditional retailers alike to leverage digital marketing in order to reach consumers where they spend most of their time.