Retailers know the holiday shopping season ramps up long before the rest of us start sporting our festive sweaters and scarves. That’s why it’s never too early to think ahead.
In the fall of 2016, Adobe Digital Insights’ Holiday Shopping Predictions highlighted trends retailers should have expected to see as they geared up for last year’s holiday season. Although we’ll soon be releasing our 2017 report for the coming holiday season, it’s worth a look in the rearview mirror to see how our 2016 predictions stacked up to reality, and what that means for your marketing strategy as you prepare for the 2017 season.
Our findings revealed that there were still some large gaps between being aware of trends and successfully leveraging that awareness. With record-breaking sales last year, the retail industry, especially e-commerce, came out ahead. But analysts are anticipating that 2017 retail holiday shopping sales will be lower than last year’s — dropping from a 4.8 percent growth in sales in 2016 to only a 2 percent growth in 2017. This means retailers will have to work even harder this year to remain competitive.
By looking back at our 2016 predictions, and aligning those with real-world results, we gained some important insights that we believe will still hold true for this upcoming season.
1. Online Shopping.
Prediction: While we projected that consumers would increase their online purchases in 2016, we also predicted that the motivations for online purchases would shift. Consumers would move from looking for great deals (–11 percent from 2015) to wanting more convenience — avoiding traffic and long lines (+4 percent from 2015), and being able to shop from work (+7 percent from 2015).
Reality: Online shopping saw an 11 percent year-over-year growth during the holiday season. Interestingly, much of the growth in revenue happened at the end of the holiday season as shoppers took advantage of later shipping options. Retailers who experienced low growth, may be reaching a visit plateau as fewer net new customers shop online.
What it means for 2017: For traditional retailers, it’s important to note that despite growth in online sales, most customers still favor in-store purchasing, supplemented by online shopping. For pure play retailers, the growth in online shopping is good news. Investing more in mobile and display ads (see below) will be important to increasing your growth metrics. This means that providing a seamless experience between your online and offline channels is essential. So think outside the box when developing your holiday season campaigns to create a seamless experience between your online and offline brand. Given the growth in last-minute revenue that we saw last year, there’s also an opportunity for retailers to take advantage of last-minute gift buying with convenience-oriented promotions like click-and-collect or express shipping.
2. Mobile Shopping.
Prediction: In 2016, we anticipated that mobile would play a major role in holiday shopping. In fact, we predicted that it would overtake desktop for the first time in terms of driving visits to a website during the holiday season.
Reality: While desktop remained the biggest driver of visits and sales — at 50 and 73 percent, respectively — for the first time ever, there were six days in which smartphone traffic surpassed desktop traffic.
What it means for 2017: To leverage the continued growth in mobile shopping, retailers need to enhance their mobile sites. Mobile web browsing remains the dominant interaction between customers and users, but it still isn’t driving conversion as hoped. Retailers should make it easier to convert visitors to customers by allowing shoppers to check out as guests. Mobile apps can also improve the experience, especially when retailers use a platform that offers flexible APIs to connect their mobile apps with other content management systems, product databases, and ERP or CRM systems. This will make it easier to design a mobile experience that is optimized to allow customers to search for specific products.
3. Display Ads.
Prediction: Last year, we noted that digital display advertising was the best way to lead people to a specific discounted product or popular category. In part, this prediction was based on a downward trend of consumers’ preference for receiving SMS or text messages as ways to alert them to sales.
Reality: Search advertising boosted Black Friday performance, which increased 16 percent year-over-year, reinforcing the fact that display ads are the best way to deliver personalized ads that drive shoppers toward a specific product or category search.
What it means for 2017: Retailers, particularly those in e-commerce, should be entering the holiday season with a strong strategy for paid media campaigns. To succeed, you must use third-party platforms as part of your paid advertising strategy. By harnessing the data of other retailers, you can enhance targeting in your display ads, and complement your Google and Amazon tactics to ensure the highest impact of your paid search dollars. These paid ads can drive traffic to physical stores, as well as online venues. Also, don’t forget about dynamic display ads that can target customers based on products they have previously browsed on your website. These types of ads are getting easier to assemble and deliver. But, more critically, the competition for shoppers’ attention and dollars continues to escalate.
With the holiday shopping frenzy only a few short months away, retailers need a marketing strategy that covers all the bases, and doesn’t leave any revenue stone unturned. We anticipate that many of the trends we saw last year will continue into 2017, but we’ll be as excited as you to see what Adobe Digital Insights’ Holiday Shopping Predictions for 2017 reveals. Stay tuned.
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