Cyber Monday on pace for big sales jump
The online holiday sales forecast is very bright — especially on Cyber Monday.
Online sales in the United States will increase 14.8%, totaling $124.1 billion. This is compared to a modest 2.7% increase in offline retail spending, according to Adobe’s shopping predictions for this year’s holiday season.
Cyber Monday is on pace to set a new record as the largest and fastest-growing online shopping day of the year with $7.7 billion in sales, a 17.6% increase year-over-year. Online sales between 7 p.m. and 10 p.m. PST on Cyber Monday are expected to drive more revenue than an average full day in 2018. Conversions will hit the highest rate of the year (7.3%) during these hours.
Thanksgiving Day sales are expected to increase by 16.5%, generating $3.3 billion. Nearly one out of five dollars this holiday season will be spent between Thanksgiving Day and Cyber Monday, generating $23.4 billion or 19% of total online sales. One extra calendar day between Cyber Monday and Christmas Day will give retailers a $284 million boost in sales.
There are also a record number of days, with 36 days surpassing $2 billion compared to just 22 days in 2017.
The true winners this holiday season will be retailers with online and physical footprints. These companies will experience 28% higher conversions online compared to retailers lacking a traditional storefront.
There will also be a surge in shoppers buying online and picking up items in-store (BOPIS), which has increased 119% since January 2018 across all retailers. Nearly half (47%) expect to browse in-store for a product they intend to buy online later. This jumps to 58% among millennials.
Additional predictions include:
• Best days for deals: Black Friday reigns supreme for discounts on electronics, including tablets, TVs and computers. The Sunday before Cyber Monday will have the best deals on apparel (22%), appliances (18%) and jewelry (5%).
Cyber Monday will offer the largest discounts on toys (19%), Giving Tuesday for furniture and bedding (14%) and Thanksgiving for sporting goods (13%).
• The mobile revenue opportunity: Smartphones continue to be consumers’ preferred devices for online shopping, representing 48.3% of visits and 27.2% of revenue. Mobile revenue is up 11.6% year-over-year. Yet, completed cart orders happen over 20% less on smartphones than desktop, as a result of abandonment from sub-optimal checkout experiences. Closing this gap equates to $9 billion in mobile sales.
Tablets are on the decline, making up 8.8% of visits (down 30% in four years) and just 9.6% of sales. Consumers using mobile apps will spend more time browsing and complete sales two times more often than on the Web.
• Emerging shopping trends: Voice-assisted shopping is on the rise, with 21% of consumers planning to reorder frequently-purchased items and 17% placing one-time orders for in-store pickup using their voice. Holiday shoppers will ship and return purchases more often compared to the rest of the year (5% and 18% more, respectively), and to shop more for experiences like cruises and hotels on Cyber Monday.
• Top revenue-driving marketing channels: Retailers will be able to capitalize on loyal customers that go directly to their website to make a purchase, with revenue per visit (RPV) rising at 36%. Search has the second highest RPV growth at 23%, followed by helper sites like RetailMeNot (15%) and email at 8%.
• Social is losing value: Social referral traffic will generate 11% less RPV compared to Q4 2016. It is the only marketing channel to see a decline in RPV, despite the increase in referral traffic coming from social. Shoppers are also expected to consult social media sites 25% less for gift ideas this year.
“As online shopping surges with another record-breaking holiday season, the retailers with compelling websites coupled with physical store locations will have the advantage,” said John Copeland, head of marketing and customer insights at Adobe. “Many shoppers want to interact with retailers’ products and the brand in-store, and the ability to pick up online orders in-store within a matter of hours can’t be underestimated.”
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Consumers embracing AR, VR
Customers increasingly want to shop with retailers that offer augmented reality (AR) and virtual reality (VR).
This was according to the “2018 Digital Commerce Study” from Incisiv, and sponsored by Boston Retail Partners (BRP) and Windstream Enterprise. The study reported that 48% of customers would be more likely to shop at a retailer that utilizes augmented or virtual reality. Many retailers have already introduced AR apps and testing and deployment of VR apps is increasing. And 32% of retailers plan to use AR and VR within three years, respectively.
AR and VR offer new and enhanced ways for customers to experience merchandise, like visualizing how a product would look in their home or even on their body. Both technologies offer interesting applications and opportunities, as the ability to mix virtual and real elements can be game changing – especially for furniture, home décor and apparel retailers.
Macy’s is currently rolling out a new VR experience across 70 locations, combined with an AR app for home use. Both offer an immersive furniture shopping experience that allows browsing and visualization of a much larger assortment of furniture than a typical store.
Other applications of the technology include Sephora’s “Virtual Artist” app that enables customers to use AR to scan their face, and try different looks directly through their smartphone. Meanwhile, Foot Locker’s “The Hunt” AR scavenger hunt inspires smartphone-toting sneakerheads to venture across Los Angeles to unlock geo-targeted AR clues to earn the chance to be among the first to acquire new limited-edition LeBron 16 King “Court Purple” sneakers.
“Immersive technology like VR and AR is redefining the way consumers can experience and buy products, leveraging the advantages of physical space, like the store or the customer’s home, without being constrained by the space,” said Brian Brunk, principal, BRP. “Traditional retail lines continue to blur as retail realities are rapidly evolving and the stage where the theater of retail takes place can be dictated by the customer.”
Mobility will further spur consumer access to AR and VR, a factor that should encourage retailers to step up their mobile game. In fact, consumers said they use mobile devices for 46% of their shopping experiences.
These digital tools are also helping retailers create more personalized digital experiences. For example, 51% of consumers feel it is important to have personalized experience across all of a brand’s digital channels. Where efforts lag however, is at store level where only 18% of retailers currently utilize customer identifying technology.
This is putting retailers at a disadvantage as consumers said that digital influences 75% of in-store visits. The good news is that within three years, 78% of companies will utilize these details to personalize the experience.
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