With Thanksgiving just around the corner and Christmas not too far behind, businesses have come to expect a massive increase of website traffic and foot traffic in their stores. The time leading up to Thanksgiving and continuing through Christmas is when consumers are most willing to open their wallets.
For some businesses, this is great news. For some, this can prove to be very stressful, especially if the business is unprepared to meet the above-average demands of the busy shoppers.
This is why it is important to prepare your business ahead of the holiday shopping madness. One way to do this is to keep yourself up to date with the latest holiday sales predictions for the year.
While these are only holiday sales predictions, most of the time they can be pretty spot on. We came up with our own sales predictions last year; now, take a look at what the holidays have in store for retail businesses this year to see how you can use them to your advantage.
1. Increase in Overall Spending
The great news is that consumers have a more optimistic outlook this year compared to last year, mainly due to lower unemployment rate, minimum wage increases, and cheaper food and fuel prices. It is expected that holiday shoppers will spend 10% more this holiday season as compared to last year.
Deloitte has predicted that there will be an increase of 3.6% to 4% in holiday spending from November 2016 to January 2017. Although there are uncertainties surrounding the US elections this November, retailers expect things to get better once the presidential results come out.
2. Increased Digital Shopping
With more and more consumers choosing to avoid the maddening crowds by doing most of their shopping online, expect e-commerce-based businesses to reach new heights. Deloitte is predicting there will be an increase of 17% to 19% in e-commerce shopping compared to last year’s holiday online sales.
3. Mobile Consumers Rise
Retailers can also expect a 25% increase in mobile shopping. Consumers do everything online these days—from reviewing products and hunting down deals, to making an online purchase and tracking packages. According to one of Listrak’s retail experts, mobile purchases will outpace desktop purchases by more than 50%. This is because online retail companies are now creating more responsive websites that allow a smooth transition from their emails to their mobile shopping platform. The result is that more people will be able to complete their orders using their phones instead of having to transfer to a desktop.
4. Expect Competition from Amazon
As previously mentioned, e-commerce will continue to dominate the retail landscape at a blistering pace, with most retailers struggling to compete with the online retail giant that is Amazon. In a recent Reuters/Ipsos poll, more than half of holiday shoppers are planning to buy from Amazon this season, while a significantly smaller amount planning to visit Wal-Mart, Target, and Macy’s.
5. Retailers Will Struggle to Deliver on Personalization
Retailers are now finding it harder to woo customers into buying their products using traditional marketing. Consumers expect a personalized relationship with the brand they are doing business with across every platform—whether online or in-store. Seducing buyers with promotions, deals, and huge discounts can only be effective if personalization is used in marketing efforts, but unfortunately this is something retailers still struggle with.
Although “personalization” has been a catchphrase in the retail industry for many years now, it comes as a surprise that a lot of retailers are still not taking advantage of it. In a survey conducted by EcoConsultancy, 96% of retailers know the benefits of personalization, but only 6% are actually using it. Retailers still need to make their move away from one-size-fits-all holiday marketing and to create more personalized content.
6. Store-Based Retailers Will Struggle to Compete
Because customers are becoming used to the convenience that online shopping offers, they will want to have the same fast and fuss-free checkout transactions when shopping at brick-and-mortar stores. They will also prefer to shop at stores that have free Wi-Fi access and knowledgeable sales associates to help them with their shopping.
7. Experience-Based Gifts Outshine Traditional Gifts
Studies show that real-life experiences make us happier than material things. With that in mind, expect holiday shoppers to turn to travel bookings, events, museums, theaters, bookstores, and restaurants instead of shopping malls when shopping for their holiday gifts. Magazine subscriptions, museum memberships, seasonal theatre tickets, annual passes to local attractions, spa certificates, and other experiential gifts are expected to boom over the holidays.
8. Hipsters Will Shop More for Themselves
Upwardly-mobile millennials who are living in creative cities such as Brooklyn, Austin, and Portland are likely to spend $500 more than the average consumers. Not only that, but a third of their holiday spending will be spent on themselves.
9. Retailers Will Focus on an OmniChannel Shopping Experience
The modern customer journey is no longer a linear path, which is why businesses need to create a seamless and consistent brand experience across all of the platforms available to them, whether through online, in-store, mobile app, social media, or email. Retailers will focus less on the actual transaction and more on the interaction with the customer.
Aside from using various channels, customers now have the ability to switch between channels and use them simultaneously. For instance, some customers will check out the online reviews of a particular product using their mobile phone while checking out the actual product on display in-store.
10. The U.S. Will Meet Singles Day 11/11
China’s retail giant Alibaba identified a great retail opportunity in November 11th, which is a Chinese holiday in celebration of singlehood. From an obscure holiday that started in 2009, it has now snowballed into a consumer phenomenon that puts Valentine’s Day into shame. Retailers predict that Singles’ Day will be a huge success in the US because of the huge profits this holiday made for businesses in China last year.
11. Email Will Continue to Rise
It is predicted that retailers will take advantage of email marketing by 20% -30% more than in 2015. However, the email open rates will remain the same with last year due to the increased number of competitors. More businesses will use promotions that offer free gifts with purchase to entice their target audience to checkout their shopping carts and complete their orders.
The year-over-year email volume will increase by as much as 25%. Businesses will become smarter when it comes to their sales funnels. They will make use of various email marketing strategies such as browse abandonment emails and cart abandonment emails in order to improve their conversion rates.
12. Retailers Will Encourage Early Shopping
For the 2016 holiday season, retailers must get started on their holiday preparations as early as now and implement their marketing strategies as soon as possible. This is because consumers are eager to start making their holiday gift purchases earlier, as shown clearly by last year’s sales trend.
Last year, shopping for holiday gifts started around Halloween, and it is expected to begin earlier this year. Forty-one percent of shoppers last year had begun looking for holiday gift ideas and inspirations, 34% had started doing their holiday shopping research, and 20% had already made their purchases by November 1.
This year, retailers predict that 64% of consumers will start their holiday shopping before the start of Black Friday week, while 29% will be done with their shopping by then.
13. Pet Shopping Will Be Significant
Pets won’t be forgotten this holiday season, too. Pet owners are more than willing to buy holiday presents for their animal companions. It is estimated that pet parents will spend an average of $62, with millennials that own a pet spending the most at $81.
Since a lot of money is going to be spent this holiday season on pets, any retail business that is pet-related should market and highlight their pet products right away.
14. Free Shipping and Free Returns Will Be Important to Consumers
Online consumers want convenience and instant gratification, which is why 60% of online shopping platforms have indicated they will provide free shipping and free returns this holiday season as an added incentive.
Free shipping has been the norm once a certain amount has been purchased, while the free return policy has only been recently adapted as retailers realized that they have to minimize all the obstacles that make people hesitate to buy from them.
Online retailers will also be offering various ways to order such as online orders that can be picked-up in-store to provide more options to busy holiday shoppers.
The Takeaway
Now that you know the holiday sales trends that are expected this year, it’s now time to sit down and plan your marketing actions. Use these to your advantage, tailoring your marketing to make the most of your holiday sales!
References:
http://www.cnbc.com/2016/09/20/retail-sales-seen-increasing-roughly-3-to-4-percent-this-holiday.html
http://www.pwc.com/us/en/press-releases/2016/pwc-holiday-shopping-outlook-press-release.html
https://www.listrak.com/resources/holiday-insights/2016-holiday-retail-predictions.aspx
http://www.marklogic.com/blog/2016-predictions-retail-ecommerce/
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