There are many factors that are raising expectations of retailers for the upcoming holiday season from a bumper sale during the period last year to the continuous improvement in retail sales over this year. Retail experts and market watchers believe that currently, consumer confidence in the US is high, as unemployment is low and wages are increasing. According to latest eMarketer forecast, all holiday retail sales (online and in-store) in 2018 will grow by 3.8% to US $ 691.9 billion – though this projection is very positive, but not as impressive as the 5.5% gain that US saw last year. On the other hand, Deloitte is projecting a 5.0 to 5.6% increase in total retail sales overall for the holiday season.
The buzz around Christmas sales is starting earlier than the previous year, for many years now. In fact, many of the predictions, suggestions and analyses for the current year’s season started coming in as early as January end, as soon as the final data for the past season was compiled. This is not surprising, considering that the holiday season is the biggest grosser for retail, both offline and online, and retailers work meticulously to ensure that they get a decent chunk of the heightened business volume. Now that we are into October, the activity and preparation for the holiday sales is on full swing…, from product portfolio to how best the consumer is enticed.
The first thrust is on getting an edge during Black Friday sales that falls a day after the US holiday of Thanksgiving, which is the fourth Thursday of November and is officially regarded as the first day of the Christmas shopping season, on which retailers make many special offers. Of late, as a marketing strategy, online retailers have started promoting what is now called Cyber Monday and which falls on the Monday after Thanksgiving, as a day for exceptional bargains. Data from Adobe Analytics showed that the combined totals for Thanksgiving Day and Black Friday 2017 were up 17.9% to US $ 7.9 billion, while Cyber Monday 2017 ended up being the single biggest US online shopping day ever with US $ 6.59 billion in sales – just short of the predicted US $ 6.6 billion, but still up nearly 17% more to that of the previous year.
Analysing what worked for retailers and consumers last year, many predictions are being made. Going through the many reports that have emerged, three major predictions have emerged that are being endorsed by every research and market forecaster – Holiday browsing and buying will start earlier than ever; Online penetration and impact is going to get bigger, and consumers experience and not just a good product the way forward. Other predictions are in many ways interlinked with these three core movements. The going is tougher for the bricks-and-mortar stores, but using the omni-challenge route effectively can translate into big business for the stores. After all, Christmas is also about family time and doing things together… Shopping is one of the activities families like to indulge in as a run up to the festival.
Holiday browsing and buying will start earlier and end much later
In the last few years, it has been observed that October and not November is the time when consumers start searching for deals. Responding to this trend, many retailers from Amazon to Walmart have started offering deals days and even weeks prior to Black Friday. The trend impacts both online and bricks-and-mortar strategies around the holiday shopping weekend, effectively extending the ‘big sale event’ throughout the entire month of November from Black Friday on to the Cyber Monday and including Cyber week (the 7-day period beginning with Thanksgiving).
According to Criteo, which works with a growing network of over 18,000 brands and retailers across the globe and sees 1.4 billion shoppers each month and 650 billion in commerce sales each year, Holiday 2017 revealed an unexpected opportunity for retailers – the week between Christmas and New Year’s, a.k.a. ‘Cyber Week II’. According to a recent report by Criteo, between December 26th (Boxing Day) and December 30th, the US saw up to a 46% increase in online retail sales, which speaks volumes of the potential of Cyber Week II. December 25th marks the beginning of this week, a period when shoppers flood back to the market to take advantage of online deals. Gift cards in hand, they’re ready to treat themselves in the run-up to New Year’s Day.
Digital penetration will continue to dominate sales
There seems to be no U-turn to the immense popularity that online shopping enjoys among consumers; it is only getting bigger, by the day. Holiday e-commerce sales are expected to increase by 15.3%, according to eMarketer’s new forecast. These figures are very impressive, though lower than the holiday e-commerce sales in 2017 that grew by 17.8% – an increase that the National Retail Federation (NRF) attributes to ‘growing wages, stronger employment and higher confidence.’
However, not all projections are as conservative, and Deloitte estimates that e-commerce sales could increase between 17-22% for the 2018 holiday season, which it defines as the period from November 1 to January 31. Deloitte’s healthy estimate is partly because of “solid disposable personal income growth,” says Daniel Bachman, Deloitte’s US economic forecaster. He adds that a strong labour market should also aid retail spending, along with elevated consumer confidence and a stable personal savings rate of around 7%. Adding to the digital buzz is the fact that in 2017, more than 40% of all online retail sales in November and December happened on mobile phones. Significantly, December 23, 2017 (closely followed by Christmas Eve and Christmas) was the biggest day ever in the history of mobile commerce in the US with 48% of all purchases made on smartphones.
Giving consumers experience and not just a good product is the way forward
The real holiday season isn’t about the gifts so much as the joy and memories that they bring to families and friends, so creating memories that stay for a long time is important. Being present for the consumer at his convenience is gaining importance. Brands that can connect, no matter at what time of the day, or the week, or season or the year stand to build a series of moments for their customers over time – the ones that are filled with discovery, joy, hope, excitement, and even love. The smartest retailers and brands are building long-time customer loyalty by creating the best, most personalised customer experiences across channels and devices. Here, being omni-channel is a big advantage.
As the holiday season nears, retailers are finding ways to be a part of the experience of Christmas shopping, and with the general mood in the US economy being positive, it is going to be a holiday season to watch out for!