Will consumer spending bring holiday cheer to businesses in 2016?

hdsThe holiday season isn’t yet upon us, and already there are a plethora of prognostications being made as to how holiday sales will stack up compared to prior years.

These predictions come courtesy of numerous forecasters including the National Retail Foundation, Deloitte, Kantar Media, eMarketer, the International Council of Shopping Centers, Market Track and others.

So what’s in store? On balance, forecasters predict that holiday sales in the United States will post an increase of approximately 3.5%.  That’s higher than the 10-year rolling average of 2.5% but down a tick from last year’s 3.7% increase.

Still, at more than $655 billion in total sales, holiday spending continues to be the biggest single driver of the U.S. consumer market.

Hardly surprising, e-commerce sales are expected to continue their double-digit growth over last year’s holiday season, with various predictions ranging from 14% to 17% growth in this sector. Not only are consumers attracted by the convenience of online shopping, many of them believe they can find products at the cheapest price via online sources rather than taking a trip to the shopping mall.

Another factor that drives at least some people to shop on their online devices is their aversion to the crush of holiday shopping at the stores. A McKinsey study has found that nearly one-third of U.S. consumers basically hate Black Friday (the day after Thanksgiving), and make it a point to stay as far away from it as possible.

But there’s one drawback for businesses about online holiday shopper dynamics, however:  Those consumers tend to be less brand loyal than is typical. RJ Metrics calculates that the typical e-commerce business acquires nearly 25% of its new customers during just the months of November and December.  Tempering that healthy statistic is the lifetime value of those consumers, which RJ Metric has determined is about 13% lower than the lifetime value of customers acquired at other times of the year.

You might be wondering what amount of money the typical U.S. consumer will spend on his or her holiday shopping this year. Wait for it:  The 2015 per capita amount is expected to be $935.

That figure may seem quite rich … but it’s actually a little bit lower than 2015’s average spend-per-person, which at $953 happens to have been the all-time high ever recorded.

Does the new $935 forecast signify a reversal of a trend … or is it just a pause in an otherwise ever-increasing amount of money that consumers are willing to plunk down as part of their celebration of the holiday season?

Check back in about a year and we should have an answer.

It’s Official: Cyber Monday 2014 was the Biggest e-Commerce Day in U.S. History

Cyber Monday ShoppingIn the days following Black Friday this year, we heard reports that consumer purchase volumes at stores were down more than 10% compared to 2013.

A number of explanations for the decline were given, among them the notion that Black Friday sales are less of a draw this year, since merchandise sales now begin before Thanksgiving and tend to run the entire month of December.

But some observers speculated as to whether soft Black Friday revenue figures presage an equally soft holiday shopping season overall.

Well … now that we have sales figures from Cyber Monday (the Monday following Black Friday weekend), I think it’s safe to say that any concerns about a tepid holiday buying season are unfounded.

Custora E-Commerce Pulse, a customer relationship management firm which tracked more than 100 million online shoppers and over $40 billion in e-commerce revenue over the full Thanksgiving Holiday weekend, has just reported that Cyber Monday e-commerce revenues were up over 15% compared with Cyber Monday 2013.

That makes Cyber Monday 2014 the single biggest day in U.S. online shopping ever in history.

Other days of the Thanksgiving weekend also showed robust gains in online shopping:  Black Friday online sales were up ~21% over 2013, and online shopping on Thanksgiving Day itself were up nearly 18% over Thanksgiving Day in 2013.

The strong growth was fueled by mobile shopping, e-mail marketing, plus online product searches on Google and other search engines.

In particular, mobile shopping accounted for ~22% of orders on Cyber Monday, significantly higher than the ~16% of orders recorded last year.

On Black Friday itself, mobile shopping accounted for around 30% of all orders — yet another dramatic increase over 2013 when mobile shopping account for just shy of 23% of orders.

This year’s Cyber Monday stats put the lie to the notion that e-mail marketing is losing its luster.  In fact, e-mail marketing drove nearly one in four online shopping orders, outstripping natural search (at ~19% of all orders) and paid search (~16% of orders).

Much ado about (practically) nothing: Social media and Cyber Monday.
Much ado about (practically) nothing: Social media and Cyber Monday.

And guess which channels weren’t a meaningful part of the holiday shopping experience this year?

If you guessed social media … you’re absolutely correct.

Taken together, Facebook, Twitter, Pinterest and Instagram accounted for only about 1.5% of online e-commerce orders on Cyber Monday.  (For the weekend as a whole, it was only slightly better at ~1.7%.)

This year’s statistics just add more confirmation of several truisms about online consumer marketing:

  • Targeted e-mail still works the best.
  • Online search is important.
  • Social media is like Lucy and the football.