Companies may want to boost their product assortment, operations and staff before November hits, due to a projected increase in this year’s online holiday sales.
According to Deloitte’s holiday retail forecast, distribution experts predicted that total holiday sales will reach more than $1 trillion in 2016, which is a 0.4% increase in holiday sales compared last year. Deloitte also anticipated that digital sales alone will reach from $96 billion to $98 billion this holiday season.
Deloitte LLP vice chairman Rod Sides discussed how retail competition will stem from small and mid-sized retailers that hone in on personal consumer experiences, also known as marketplace fragmentation.
“This group has been collectively taking share from large, traditional retailers to the tune of $200 billion in annual sales over the last five years,” Sides said. “The retailers that compete on differentiated products and experiences should be well positioned to outperform other competitors during the holiday season.”
Online commerce will also be an important catalyst this holiday season. Deloitte also anticipated that digital interactions will influence 67 percent of every dollar spent in stores for holiday 2016, which will total $661 billion. Consumers’ usage of laptops, smartphones and tablets will essentially determine their brick-and-mortar purchase decisions for presents.
“Large e-commerce players and digital platforms such as Facebook and Pinterest are shaping what people think a great shopping experience is—a fast, highly-curated assortment with access to visuals, information and buying sources,” Sides noted. “Since these bigger platforms are more connected to the customer, retailers should consider including them as part of their digital marketing campaigns this holiday season.”
To lock in consumers, retailers may want to prioritize their e-commerce services, including free shipping.
A recent Radial holiday report revealed that 91 percent of consumers said they would be willing to increase their online order sizes to obtain free shipping. If retailers provided affordable shipping costs, 89 percent of consumers also said that waiting five to 10 days for their orders would be acceptable. Social media also played a key role in customer satisfaction, with 77 percent of consumers that said they used social media platforms to discuss their online shopping experiences.
“Finding that the overwhelming majority of shoppers are willing to increase the size of their online orders to get free shipping may be surprising to many retailers,” CFI Group CEO Sheri Petras said. “It shows that consumers are more interested in finding value rather than simply pinching pennies.”