As we reach the midway point of October, speculation is becoming rampant regarding the sales outlook for this holiday season—and right now, the outlook is extremely positive for eCommerce retailers. In addition to a forecast from Deloitte last month which anticipated a 14% online sales increase through the holiday season, two new projections were added to the mix last week.
According to Internet Retailer, both the National Retail Federation (NRF) and the PricewaterhouseCooper group (PwC) project a growth in sales this holiday season for online retailers. Shop.org, the NRF’s online division, anticipates up to 11% growth this year, with total web sales reaching $105 billion (all totals in USD). PwC, meanwhile, paints an even more dramatic picture of the shifting retail landscape; despite warning of a 6.9% drop-off in average household spending on gifts overall, it predicts an increase both in the share of sales that occur online and the amount that shoppers are spending online.
These numbers certainly shed light on eCommerce’s rapidly expanding role for many consumers, but this quote from Alison Paul, a Vice Chairman at Deloitte, reveals an even more extreme transformation: “Our research indicates that 84% of shoppers use digital tools before and during their trip to a store. Additionally, those shoppers convert, or make a purchase, at a 40% higher rate than those who do not use such devices during their shopping journey.”
Not only is eCommerce carving out a space in the retail landscape formerly occupied by brick-and-mortar stores, but it now also plays a significant role in the brick-and-mortar shopping experience for well over three quarters of consumers. Much in the same way that television networks are commissioning “second-screen” apps for mobile devices to create an interactive viewing experience, consumers are using these devices to keep informed as they shop as well. The PwC report corroborates this, claiming that “2014 could be the turning point when consumers make online pre-planning an integral part of their holiday shopping tradition.”
This should be enough to make traditional retailers stop and think, particularly for the many big-box companies who still view their online divisions as secondary (and are consequently lagging behind in online sales). Statistics such as these ought to serve as a wake-up call to put an emphasis on their web-based operations, and to build their online stores as a complement to the in-store experience rather than just a supplement. Otherwise, the negative impact could spill over into their physical enterprises as well.
These findings are also of interest to smaller stores and online retailers. Consumers are evaluating their options online and continuing to gather information from the web right up until they make their purchase in a physical store. This means that competitors have more opportunity than ever before to compete for their business.
Naturally, a large factor in the ultimate decision is price. The PwC report cites 84% of shoppers are choosing where to shop for gifts based on price. However, many other factors do come into play here: the same report shows that 43% will look at “frequency and quality of seasonal deals,” and there are also many smaller, less measurable components to the decision, such as customer loyalty and retention.
For retailers, it is in large part a matter of maximizing the visibility of your store (through SEO), and of your products and promotions (through site search & navigation solutions) in order to make the most of a promising holiday season, and build momentum that will carry into a successful new year.