Online holiday sales to increase 15%, according to forecast
E-commerce sales will rise this year — and so will Amazon’s share of the pie.
That’s according to retail search marketing company NetElixir, which is predicting e-commerce growth of 15% this year, up from 13% last year. It also projects that Amazon will take 40% of online holiday sales this year, up from 35% in 2017.
NetElixir’s 2018 Holiday Forecast projects that Amazon’s holiday sales will translate into $38.8 billion dollars, up $29.4 billion from last year. All other retailers combined are projected to make an additional $3.6 billion in holiday e-commerce sales this year.
In making its optimistic forecast, NetElixir cited the strong first half of 2018, which saw roughly a 17% increase in online orders and 15.5% increase in revenue compared to 2017. Back-to-school ecommerce sales increased 14% from 2017. It also cited continued mobile commerce growth, such macro-economic factors as the strong economy and record low unemployment, and the deeper discounts being offered by larger retailers around holiday time (although this has led to a lowering of average order value.).
The growing popularity of voice-search led shopping: also factored into the forecast — 30% plus of all mobile searches are expected to be voice activated. Voice search has converted the “search-shop-buy” path into just a “search-buy” path, especially for staple purchases, which is leading to an increase in the frequency of online purchases, according to NetElixir.
“Our models are forecasting a very optimistic holiday season for retailers,” said Udayan Bose, founder and CEO of NetElixir. “We are also seeing new buying trends being spurred by the adoption of new technologies. So while retailers can expect overall e-commerce growth, to reap the benefits they should be adapting their e-commerce channels to coincide with these changing consumer behaviors.”
NetElixir forecasts that holiday gifting-related search query volume will pick up from Sunday, Oct. 21. NetElixir also identifies three peak online shopping periods for this year’s holiday shopping:
• Five-day period from Thanksgiving to Cyber Monday (11/22-11/26)
• Green Monday period (12/9-12/12)
• Mobile shopping spike (12/18-12/21)
Alexa, order me a Christmas tree
Amazon is moving in on a holiday tradition.
The online giant will sell live, full-size Christmas trees this year, the Associated Press reported, shipping them in its standard box format. Amazon sold small live Christmas trees last year, but they were of the table-top variety (shorter than 3 ft.).
The trees, which will include 7-ft. Fraser firs along with Douglas firs and Norfolk Island pines, will be shipped within 10 days of being cut down, if not sooner, allowing them to survive the shipping and still arrive fresh.
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Top Five Ways to Apply Advanced Analytics and AI
Analytics, and in many cases spreadsheets, has been the bastion of the back office for retailers and consumer products companies for years — understanding volumes, margins, geographic performance, and SKUs. But recently, something fundamental has changed. Executives are pushing for the next level of analytics to uncover the hidden opportunities in data to create powerful and differentiated product, customer, and brand experiences.
Why? It’s because the competitive game has changed. Customer service has now become as crucial to customer loyalty as the product itself. Customers expect seamless personalized experiences, in-store, online, across channels, and SKUs.
The challenge is that traditional analytics hasn’t kept up, with analysts overwhelmed by so many different customer journeys, a spiraling variety of products, and the need to connect signals from service, social, and other channels. It’s not only about applying artificial intelligence and machine learning to tease out opportunities in data, but breaking analytics out of the back office, and putting actionable insights in the hands of those at the frontline like field reps, service agents, logistics and category managers.
Here are five ways retailers and CPG companies can apply the latest analytics to compete smarter:
1. Uncover the hidden opportunities customer value
Whether it’s proximity or service in retail, or trust and price in CPG, understanding and acting on the drivers of loyalty is foundational. In a consumer survey of 14,700 adults, 40% said they make repeat purchases but are not loyal to a company, according to a Facebook IQ Survey. Last year, McKinsey found that companies who understand their customers and the best channels to reach them outperform their category by up to 16 percentage points.
Getting there means not only integrating marketing, sales and service data, but applying the latest AI and machine learning capabilities to analyze data across not just a handful of dimensions, but tens or hundreds of attributes — and that means guiding analysts on precisely where to drill down, asking the next questions, and using machine intelligence to help answer questions they didn’t think to ask.
2. Shift up product pricing and promotion planning
If your analytics for designing promotions hasn’t moved way beyond the SKU to target customers based on segment, then you’re leaving money on the table. With a wealth of data now available across all the channels of engagement, from the web to store, retailers can tap data science to help define better-performing promotions based on detailed customer behavioral and geographic trends, while also finding the optimal pricing to ensure they’re not leaving money on the table.
3. Tap the hidden lever of customer experience: inventory management
Consumers want online visibility into in-stock items at nearby stores, online ordering, with in-store pickup, and expect frictionless, low or no-cost ease of return — regardless of buying channel. Gathering purchasing data from web and store channels, AI/ML algorithms can identify purchasing patterns by geography, season or other dimensions drives more optimal regional and distribution center specific inventory decisions.
4. Setup the sales team to identify product and account whitespace
With extensive product catalogs, product variations, and operating on accelerated product lifecycles, it’s easy for CPG sales teams to miss opportunities to drive more value from current distributors or retailers. With modern analytics embedded in their everyday sales apps, CPG field reps can instantly see all their accounts, the products they’ve already purchased, and filter them by geography, product family, industry or more to focus their efforts, and get recommendations on where and what to sell next.
5. Tighten up the slack in retail execution
Optimizing the “last mile” from shelf to shopping cart is one of the biggest opportunities for retail and CPG alike. Done right, analytics can provide CPG field reps with a more intelligent experience from the recommendations on the right stores to visit based on drive time and opportunity, to actionable intelligence into the most impactful planograms to use in-store.
For example, Bain Insights references a case in which data supported a brand’s negotiations for more shelving real estate: “By arming its account managers with the information that the brand’s 30% share of shelf space was significantly lower than its 50% overall market share, one brand was better able to negotiate with store owners for more space.”
For CPGs and retailers alike, the age of the customer creates new challenges and incredible opportunities. With more SKUs, more customer journeys, changing consumer preferences and more distribution channels than ever, companies are turning to AI-driven insight that provides recommendations and prescriptions for the right strategies. And they’re looking to break analytics out of the back-office and put actionable data-driven decision making in the hands of everyone. What’s the next step you’ll take on your analytics journey to transform your customer experiences?
Keri Brooke is VP of product marketing for Einstein Analytics at Salesforce.