In the short span of 61 days — November 1 to December 31 — a large number of transactions will occur between consumers and brands, positioning the 2016 holiday shopping season to bring in over $91.6 billion dollars in revenue. The nature of those transactions will also change, as an increasing number of shoppers will be completing transactions online, using mobile while in brick-and-mortar stores, and more. Brands must understand how the consumer experience is changing if they want to remain competitive — especially during the holiday season. Adobe Digital Insights’ (ADI’s) Holiday Shopping Predictions are focused on providing robust data to help brands understand both what to expect and how to maximize revenue this holiday season.
Based on the data we’ve collected, we’re expecting the typical high-revenue shopping days like Black Friday and Cyber Monday. However, the data also indicates major growth in revenue at the end of the holiday season (last two weeks of December), indicating consumers are taking advantage of options, like Click and Collect and express shipping, to continue shopping up to the last minute. Successful brands will address this prolonged season using solid strategies and compelling digital-marketing experiences to capitalize on additional purchasing time and the potential to increase revenue.
What Is the Adobe Holiday Shopping Predictions Report?
It might be helpful to begin by explaining how we develop these insights. At Adobe, we measure roughly $7.50 of every $10.00 spent online as well as 80 percent of all online transactions from the top 100 retailers. To create this particular report, we viewed over 55-million SKUs to obtain product and pricing information and more than 1-trillion visits from thousands of retailers to obtain shopping information. The compilation of this data helps us understand not only how consumers are interacting with brands, but also the current behavioral trends. This knowledge, in turn, allows us to help brands understand the best practices for both providing stellar customer experiences and driving in revenue this holiday season.
This includes understanding the anticipated growth of particularly big shopping days throughout the holiday season. For large shopping days, Thanksgiving sales are predicted to grow the fastest with a projected 15.6 percent year-over-year growth. Black Friday is next, with an estimated 11.3 percent year-over-year growth, and is anticipated to bring in over $3 billion for the first time ever! Cyber Monday, on the other hand, is not projected to grow as quickly; our report indicates retailers should expect a 9.4 percent year-over-year growth. However, with an expected $3.36 billion in revenue, Cyber Monday will continue to be the largest revenue day of the holiday season.
Nevertheless, while these traditionally large shopping days are always part of a brand’s holiday strategy, it’s important to note that we’re anticipating a 5 percent year-over-year growth in the first two weeks of the holiday season and a 24 percent year-over-year growth in the last two weeks of the season. Meaning, if you want to have a competitive advantage in the marketplace this holiday season, you must have a strategy in place for motivating consumers to purchase from you not only during the more popular and well-known sales days, but also throughout the entire season.
Another thing that correlates with our longer purchasing season is that we’re seeing data indicating that 12 percent of all Christmas décor will be purchased before Halloween — 20 percent more than last year. Retailers should consider this part of the longer holiday season and strategize its potential impacts on both displays and on Halloween and Thanksgiving décor.
So, What Are These Anticipated Holiday Shopping Trends for 2016?
To craft a solid holiday marketing strategy, it’s important for brands to understand not only what the anticipated revenue changes are, but also what the anticipated marketplace behavioral changes will most likely be. This can help you create a strategy that generates the best user experience possible, which often results in higher revenue and stronger brand loyalty. Following are some of the holiday shopping trends we expect to see this season.
1. Online Shopping
The trend toward making purchases online is expected to continue. However, there is a slight shift in people’s motivations for shopping online: while people were focused most intently on free shipping and great deals in 2015, consumers in 2016 are increasingly more likely to cite the convenience of online shopping as one of their motivating factors. This means that, since online shoppers don’t have to deal with traffic or long lines, they may be willing to pay a premium for this convenience. This trend may be too new still and not yet used by enough consumers for brands to begin testing it, but it is something to consider as you craft your strategy.
2. Mobile Conversion
In 2016, mobile will continue to play a major role in holiday shopping. In fact, ADI is predicting that mobile will overtake desktop for the first time in terms of driving visits to a website during the holiday season. The issue here is that, even though the prediction shows that more than half of all web traffic will come from mobile, the same devices will drive only 34 percent of revenue. This means there is currently a gap between customers engaging on smartphones and the brands’ abilities to convert. In fact, our data shows that desktop conversion rates are almost three times those of smartphones. Consumers also tend to put less in their carts via smartphones — an average of $35 less per transaction! These are major issues that brands have to tackle. How do you increase both conversions and average transaction amounts on a smartphone? This consumer trend is not going away, so this is definitely something brands will have to approach strategically by offering more seamless customer experiences.
3. Consumer Research
In our survey, consumers reported checking an average of four or five websites before making any purchasing decisions. Thus, brands that believe they can devise a strategy without looking at what their competitors are doing are probably going to have difficulty succeeding. Online research allows consumers to check multiple retailers quickly, so they can find the best possible products for the best possible prices. You simply must verify that your deals are truly competitive.
4. Digital Display
If you want to drive people to a specific discounted product or popular category, the best way to do so continues to be through digital display advertising, followed by social and email channels. Having a robust email, social, and digital display campaign strategy increases the likelihood that you will gain consumers’ attentions and drive them to particular products or offers. These channels also offer effective ways to retarget customers based on their behaviors. In previous years, consumers were open to receiving SMS or text messages to alert them to sales, but that seems to be trending downward. Email allows them to access sales information when it’s most convenient for them and seems to be their preferred medium for receiving marketing materials via mobile while they are on-the-go and shopping for the holidays.
How Are Holiday Shopping Trends Affecting Brands?
As part of our report, we looked at the top-5,000 public products during the holiday season. We wanted to find out how much revenue they brought in during the holiday timeframe versus the rest of the season. We actually see that, between Thanksgiving and Cyber Monday, the top-growing products sell, on average, 25 percent of their annual sales — five days drive 25 percent of their sales! This highlights the fact that — from a retail perspective — you have to get it right, especially for the customers who are already familiar with and loyal to your brand.
We found that an average of 5 percent of a company’s customers drive 35 percent of their total revenue. That’s an average of 7 percent of your revenue that you can potentially lose just by eliminating a fraction of your best customers. As a result, attention to customer loyalty is going to be a major factor in driving revenue this holiday season. Marketing to and taking care of your most loyal customers will be a huge driver for revenue — plus, this core customer is not one you can afford to have the competition woo away from you. This is where delivering a seamless, personalized customer experience really becomes critical. Delivering a stellar customer experience allows you to retain the customers who mean the most to your business while you continue to develop new relationships.
Brands also must understand that it’s increasingly more apparent that they need to have a strong plan in place for increasing conversions via mobile. The mobile trend being a crucial factor in consumers’ shopping experiences is only increasing. Mobile must be factored into your sales and marketing campaign strategy — even more so during the holidays than any other time of year.
So, What’s to Be Expected This Holiday Shopping Season?
This holiday season, we are expecting to see more than 57 days that bring in $1 billion of revenue each. We are also expecting 53 of those days to occur consecutively versus the 31 consecutive days we saw last year — an increase of 71 percent year over year. The holiday season is growing at breakneck speed, but it’s also slowing down. Just a few years ago, we were excited about having three $1-billion days — and this year, we’ll have as many as 57 of them! That’s an incredible increase! If you’re a brand that really wants to capitalize on this rapid growth, it’s important to strategize for all of it — the traditionally big shopping days (like Thanksgiving, Black Friday, and Cyber Monday), the increasingly long holiday season, and the average holiday shopping days. Without actively planning for the weeks leading up to Thanksgiving, the last two weeks of December, and everything in between, you’re likely to leave revenue and market share on the table.
The post Adobe’s 2016 Holiday Shopping Predictions: Tips for Capitalizing on 2016’s Holiday Shopping Season appeared first on Digital Marketing Blog by Adobe.
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