Forecast Predicts Record $ 124.1B in US Online Holiday Shopping
It looks like it’s going to be a holly jolly holiday season for online retailers.
That’s the prediction according to Adobe’s annual holiday forecast, which looked at more than one trillion visits to US retail sites, numerous retail transactions, and surveyed over 1,000 consumers across the country.
So what exactly is in the forecast for this year’s holiday season?
Adobe’s report predicts US ecommerce sales between November 1 and December 31 will total a record $124.1 billion, an increase of 14.8% over last year. The online shopping forecast overshadows the 2.7% revenue increase predicted for traditional storefronts over the same period.
The company’s survey also found that consumers are likely to spend 57% of their holiday budget online this year, up from 55% in 2017.
The report’s findings follow a building trend. Since 2016, online sales during the holiday season have been steadily increasing, which Adobe said is thanks in part to a high level of consumer confidence.
However, despite the ever-growing popularity of online shopping, it’s still up to retailers to optimize the ecommerce experience for consumers. Adobe’s report contains some interesting insights and trends that can help retailers further capitalize on the busiest retail shopping season of the year.
Key Dates for Ecommerce Sales
Every online retailer puts significant stock into Cyber Monday and if Adobe’s predictions come true, this year won’t disappoint.
This Cyber Monday is expected to set a new record as the “largest- and fastest-growing online shopping day of the year,” with Adobe projecting $7.7 billion in sales, an increase of 17.6%.
As for Thanksgiving Day, online sales are expected to rise by 16.5% to generate $3.3 billion. That anticipated increase is likely a direct result of more consumers planning to stay home that day, with 60% reporting they don’t expect to shop in stores on Thanksgiving Day, a notable increase from 40% in 2016.
But those aren’t the only key dates for holiday ecommerce sales.
Adobe predicts that the entire Thanksgiving weekend will be a significant revenue-generator for online retailers, with $23.4 billion in ecommerce spending between Thanksgiving Day and Cyber Monday. That translates to 19% of the forecast for the season’s total ecommerce sales coming in during a five-day period.
Plus, this year’s holiday season comes with an added bonus. The extra calendar day between Cyber Monday and Christmas has the potential to provide US retailers with a $284 million boost in online revenue.
Storefront Still Has Advantages
Online shopping might be booming, but there is still merit in having a physical store.
Retailers with an ecommerce and storefront presence could see a 28% higher conversion rate online compared to businesses without a brick-and-mortar shop, said Adobe.
The leading reason for this is an increase in shoppers who are choosing to buy items online and pick them up in-store. In fact, according to Adobe’s data, use of the buy online and pick up in-store method has risen by a staggering 119% across all retailers since January 2018. Adobe expects that the use of this purchase method will continue to increase over the holiday season.
What’s more, based on consumers surveyed by Adobe, 58% of millennials plan to visit a store to see a product that they expect to buy online later.
“As online shopping surges with another record-breaking holiday season, the retailers with compelling websites coupled with physical store locations will have the advantage,” said John Copeland, Adobe’s head of marketing and consumer insights, in a press release.
“Many shoppers want to interact with retailers’ products and the brand in-store, and the ability to pick up online orders in-store within a matter of hours can’t be underestimated.”
Mobile Shopping on the Rise
In today’s busy, fast-paced world, it’s no wonder that the ability to shop wherever and whenever is gaining in popularity.
According to Adobe, smartphones will likely drive 48.3% of retail visits and 27.2% of revenue, with mobile revenue up 11.6% year over year.
However, Adobe noted that US retailers are missing out on further mobile sales, to the tune of $9 billion. For those businesses that want to increase holiday revenue by an additional 7.3%, the key is in improving mobile checkout.
That’s because online cart abandonment among mobile shoppers continues to be problematic. When it comes to completing an online purchase, the last checkout step happens “over 20% less often on smartphones compared to desktop.”
But if retailers that can close the gap between smartphone and desktop checkouts, Adobe said the extra revenue would be “equivalent to earning a second Cyber Monday.” That’s certainly proof that setting up a mobile ecommerce site is just one step, but making it user-friendly is the real sales driver.
For some retailers, the answer to improving mobile sales could come from offering an app. Adobe found consumers who use mobile apps tend to spend additional time browsing and finish sales more than twice as often compared to those shopping on the website.
Whether or not Adobe’s predictions come true (for the record, actual sales last holiday season were higher than the company’s projection, though they were close), the report does highlight the substantial benefits for businesses that readily adapt to consumers’ changing preferences.
For those retailers already making adjustments, the holiday shopping season is sure to be “the most wonderful time of the year.”