Study: Amazon on track to grab half of e-commerce holiday sales
It’s shaping up as a record Christmas for Amazon — and it has its Prime members to thank.
The online giant is on pace to comprise roughly half of all e-commerce holiday sales made in the United States this year, according to GBH Insights. This is a large piece of the pie with overall e-commerce growth rising roughly 20% year-over-year each holiday season.
According to Daniel Ives, head of technology research at GBH, Prime members are considered the “golden jewel” of the Amazon empire. This group is an estimated 85 million members strong — and their spending power is on the rise.
Prime members, a group that is increasing significantly (~40%) year-over-year, are also expected to spend between 20% and 25% more this holiday season than a year ago, the study revealed.
“The ring-fence that Amazon has built around its Prime customer base has significantly benefited the company in a fiercely competitive Cyber Monday pricing environment with much more competitive prices from Walmart in particular, seen across inventory during the day,” Ives said. “With e-commerce Black Friday/Cyber Monday sales so far trending above expectations, these are very positive data points heading into the rest of holiday season for Amazon (and its investors), in particular.”
Prime members contributed to a blockbuster Cyber Monday for the online giant. Sales were so big that Cyber Monday became the company’s single biggest shopping day — unseating the e-retailer’s Prime Day shopping event this summer.
Customers ordered “hundreds of millions of products” on Amazon from Thanksgiving through Cyber Monday. Amazon App orders on Cyber Monday increased more than 50% worldwide year-over-year.
The online giant is citing Cyber Monday 2017 as its single biggest shopping day in the company’s history, surpassing Prime Day 2017, which generated approximately $1 billion in revenue, according to initial estimates from analysts at Cowen & Co. and JPMorgan Chase & Co. (Some estimates put the total even higher.)
Study: Cyber Monday lacks luster globally
While consumers globally anticipate Black Friday, the Cyber Monday frenzy is primarily a North American shopping event.
Black Friday enjoys a double-digit popularity percentage in six countries outside the United States, but Cyber Monday tops out at only 4% outside of North America, according to a survey conducted this month by online translation agency One Hour Translation. The study was conducted across the United States, Canada, the U.K., France, Germany, Spain, Australia and Japan.
Outside of the United States, Black Friday is particularly popular in Canada (about 26%), Spain (about 22%), France (about 21%). The U.K. and Germany (about 19% each) and to a lesser extent in Australia and Japan (about 10% in each country).
On average, among the eight countries sampled in the survey, 17% of respondents were looking forward to Black Friday. This was compared to about 8% who were looking forward to Cyber Monday, and about 3% who were looking forward to Singles Day event (the Chinese holiday celebrating single people) — making Black Friday a significant shopping event outside the U.S., the study said.
Cyber Monday however, enjoyed a double-digit popularity percentage only in North America, as 16% of U.S. respondents said they were waiting for Cyber Monday, along with 10% of respondents in Canada. This figures eclipsed interest in the U.K. (about 4%), as well as Australia, Germany, Spain, France and Japan (about 3%).
The Chinese “Singles Day” shopping event, which takes place every year on November 11, was highly anticipated among 7.5% of respondents in Japan. It was only anticipated by approximately 6% of shoppers in Spain and France, 4% in Canada, 3% in Germany, 2% in Britain and Australia, and only 1.4% in the U.S.
“This year, Black Friday is once again the most popular shopping event among consumers,” said Ofer Shoshan, co-founder and CEO of One Hour Translation. “However, looking at the figures, we can see a major difference in the levels of anticipation for the Cyber Monday shopping event, which is popular in North America — the United States and Canada — as opposed to the anticipation it enjoys in the major economies outside of North America. Based on our extensive work with thousands of e-commerce companies, we would encourage companies outside of North America in this particular field to invest in associating their activity and their brand with the Cyber Monday event.”
Top 10 Retail Tech Predictions
IDC Retail Insights has released its “Worldwide Retail 2018 Predictions” report, which focuses on the mandate for adaptive retail platforms, composable microservices-based applications, and integrated AI-enabled, augmented and connected experiences. IDC Retail Insights has released its “Worldwide Retail 2018 Predictions” report, which focuses on the mandate for adaptive retail platforms, composable microservices-based applications, and integrated AI-enabled, augmented and connected experiences.
“Platforms with a digital core play a central role, but well-thought-out DX (digital transformation) cases will enable organizations to focus on executing against their customer experience objectives in stepwise fashion, staying agile, and adjusting on the fly to continue to serve the customer in their stream of life, above all,” said Leslie Hand, VP, IDC Retail Insights. Attention to consumer need, customer journey patterns, and the ability to maintain customer loyalty by engaging the consumer continually in their context is the key to success.”
Here are the top 10 predictions for 2018 from the analyst team at IDC Retail Insights:
1. By 2019, 50% of retailers will have adopted a retail omnichannel commerce platform, which will enable up to a 30% increase in omnichannel profitability
2. By 2019, the top 30% of retailers will be actively engaged in digital transformation, driving organizational shifts and investment strategies in foundational platform technologies that are cloud based, AI enabled and composable.
3. By 2019, 40% of retailers will have developed a CX architecture supported by an AI layer. Such a platform will enable CX hyper-micro personalization, providing up to a 30% conversion increase and thus up to 25% higher revenue.
4. By 2021, retailers will have embraced geospatial data to drive greater efficiency in omnichannel orchestration, reducing inventory carrying costs by up to 25% across distribution centers and stores.
5. By 2020, more than half of consumers will expect perfect fulfillment execution as a top reason for loyalty to retailers. As a result, retailers will increase their budgets for these technologies by up to 20% to create a fully transparent and user-friendly fulfillment experience.
6. By 2021, 10% of chain retail sales will be created and managed via voice-enabled digital assistants, which will accelerate the predominance of marketplaces for buying everyday goods.
7. In the midst of rapidly evolving cyber-threats and threat actors of increasing sophistication, 75% of retailers will have adopted artificial intelligence–based cyber-defense technologies by 2020.
8. By 2019, 40% of retailers will have begun significant workforce transformation to meet growing pressure to deliver a resonating omnichannel customer experience by breaking down digital-physical engagement silos.
9. By 2020, 20% of retailers will have redesigned PIM/MDM as AI-networks for competitive insights that connect product attributes through social semantics to meaning and purpose in customer contexts, creating actionable insights to unify merchandising and marketing.
10. Through 2021, responding to stakeholders’ experience expectations, retailers that leverage AI, AR, and IoT for employee and customer engagement will see customer satisfaction scores rise by up to 20%, employee productivity rise by up to 15%, and inventory turns rise by up to 25%.