Now that Amazon.com Inc.’s two-day Prime Day sales event has passed, most retailers and brands are focused squarely on the crucial fourth quarter.
Many experts expect the 2019 holiday shopping season will shatter the ecommerce sales records set last year. Online shoppers in the United States spent $122.0 billion online in the 2018 holiday season, according to Internet Retailer research data, a 17.4% increase from the 2017 period.
A number of key factors drove last year’s online sales gain, including the continued growth and influence of mobile shopping, retail chains bolstering their omnichannel services, such as buy online pickup in store, and strong consumer confidence.
Growth drivers
“These trends are still very prominent and should continue to be growth drivers this year and beyond,” says Jon Weber, managing director and global head of retail and consumer practices at management consulting firm L.E.K. Consulting.
Retailers are optimistic about the upcoming holiday season, according to an Internet Retailer/Bizrate Insights survey of 106 retailers conducted in June. 17% of those surveyed project sales increases of at least 50%, while an additional 27% believe sales will grow 25% to 49%.
To drive growth, a large number of retailers plan to be aggressive in their marketing. For example, 23% of merchants expect to email their subscriber base at least daily during the holidays, the survey found.
Beyond email, retailers are substantially boosting their marketing budgets. When asked in which marketing channels they planned to increase their investments compared with the last holiday season, 77% said social media marketing, 62% said retargeting and behavioral remarketing, 61% said email, 61% said search engine optimization, and 58% said paid search.
Marketing spending
That spending aims to help them lure shoppers away from Amazon. And, if retailers’ efforts to counter the retail giant’s Prime Day sale with their own promotions are an indication of their approach during the holidays, they just might work. After all, large retailers (those that generate at least $1 billion in total annual revenue) generated a 68% sales increase compared with a typical Monday and Tuesday this year. And smaller retailers, those with annual online sales below $5 million per year, grew their online sales 28% over the two days compared with a typical Monday and Tuesday period, according to Adobe Digital Insights.
However, if retailers want to drive strong sales over the holidays, they need to find ways to meet consumers’ ever-growing expectations. And that isn’t easy, which is why 24% of retailers in the Internet Retailer/Bizrate Insights survey said their ability to do so is one of their key obstacles this holiday season.
One way merchants are seeking to do it is by delivering a clear, relevant message, to shoppers. That approach can capture consumers’ attention, which helps explain why 40% of retail marketers said that adding personalized elements on their websites and adopting personalized
marketing tactics helped boost their sales and average order value, according to a recent survey of 200 retail marketing executives conducted by Forbes Insights and Arm Treasure Data.
AI tools
Increasingly, merchants are implementing personalization tools that leverage artificial intelligence, which can help them treat each customer individually and determine a browsing and buying pattern, or customer profile. 72% of survey respondents said AI and machine-learning technologies are essential or important to executing their personalization strategy.
Consumers also expect fast—and often, free—delivery options. That can benefit omnichannel retailers that can leverage their stores to offer shoppers services, such as the option to buy an item online and pick it up in store and same-day pickup.
Shoppers want those options. For example, 58% of consumers have ordered an item online and picked it up in a store, and 53% of all shoppers plan to do so more in the future, according to an Internet Retailer/Bizrate Insights survey of 1,110 shoppers conducted in December 2018.
Online retailers with large store footprints are putting omnichannel technology and services at the center of their operations. Target Corp., for example, is investing billions of dollars to remodel its stores to better cater to online shoppers, such as constructing bigger back rooms designed for shipping online orders, online order pickup at the front of stores and designated areas for curbside pickup. So far its investments are paying off, as Target has generated an average sales lift of 2-4% per store following a completed remodel, the retailer says.
In the following pages, four ecommerce technology software and services providers give insight into preparing for and living up to shoppers’ growing expectations as those consumers show an insatiable need for shopping online.
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