Every year, the holiday shopping season poses a major opportunity as well as a considerable challenge for e-commerce businesses. It’s the time of year when most organizations drive a big chunk of their revenue, but also when —inevitably— a handful of major brands lose millions (and sometimes billions) of dollars over a lack of preparedness.
In some ways, this year will be no different than those that came before it: some brands will win, others will lose, and all will learn valuable lessons about what not to do next year. Some things, however, will not be so simple.
This year, the competition during the 2018 holiday shopping season will only get steeper and it will only be tougher to come out on top.
What’s Changing this Year?
1. Sales will grow (again) in 2018
We’ve seen it year after year: not only do sales during the holidays grow, but they increasingly make up a larger percentage of businesses’ overall revenue.
According to Forrester, this year’s U.S. online holiday sales will increase 13.5% (reaching $151 billion), and will account for more than 33% of 2018’s total U.S. e-commerce sales.
For SMBs specifically, as much as 40% of yearly sales will take place during the 2018 holiday shopping season.
This data makes one thing very clear: the revenue opportunity will be massive (if businesses can properly tap into it).
2. The window of opportunity is bigger
We have seen a trend in recent years: businesses have started selling (and holiday shoppers have started making purchases) sooner. It used to be that the Cyber Five —the five-day span between Black Friday and Cyber Monday— was the most critical window of opportunity. Now, this urgency starts earlier.
In fact, 40% of holiday shoppers now begin shopping before Halloween, and the ‘Cyber Five’-centric holiday shopping frenzy lasts through early December. On average, consumers have already completed 42% of their holiday shopping by the time Black Friday comes around:
In addition to an early start, the holiday season is also seeing a surge in holiday sales well after the Cyber Five (in the week between Christmas and the start of the new year, to be exact). This second wave of shopping buzz is now being called ‘Cyber Week II,’ says Criteo.
Cyber Week II had a major impact on total holiday sales in 2017, and this was true across all devices:
Thus far, we’ve seen no sign that this will slow down in 2018, and it highlights a critical priority: high-quality, omnichannel e-commerce.
3. Expectations for web performance (across all channels) are higher
Customers —particularly holiday shoppers who are hunting for the best deal and fastest delivery times— know what they want. They won’t compromise what they expect just to buy from a particular business (and especially not one that’s not delivering a strong enough experience).
They have expectations regarding ease of navigation:
- On mobile devices, 32% of customers would immediately abandon a web store if they can’t find the information they’re looking for.
They have expectations about the product information available:
- According to Think with Google, 43% of holiday shoppers want businesses to do a better job of sharing inventory information. (For more on how Sana can make this simple by using your ERP data, read our blog post).
And they have expectations about fulfillment and shipping:
- 42% of customers abandon carts solely due to poor delivery times.
- 74% of holiday customers cite free shipping as the most important option when checking out online.
4. Brands are increasingly feeling less confident about their e-commerce efforts
Despite the guidelines and demands set out by customers, many organizations recognize that they’re not doing enough. Over 75% of businesses expect an increase in holiday season revenue in 2018.
But most forecast only modest jumps of, at most, 10%.
Why such a small increase?
Brands are largely becoming aware of their shortcomings regarding e-commerce strategies, especially when it comes to IT infrastructure and leveraging the right data. And the more e-commerce tactics fall short, the more revenue boosts will follow suit.
What e-commerce challenges are contributing to 2018 holiday shopping season woes?
Here are businesses’ biggest concerns, according to Criteo:
- Only 1.3% of organizations are “extremely confident” in their data strategies.
- Fewer respondents in 2017 than in 2016 (40.3% vs. 54.3%) described their organizations as at least “fairly data-centric.
If this sounds like a familiar challenge, read about Sana’s integrated e-commerce solution (and how we can leverage the existing data in your ERP to drive your e-commerce experience).
To address these challenges, says Criteo, businesses are re-prioritizing in hopes of monopolizing a greater share of e-commerce revenue (during the holidays and beyond):
- Re-platforming is the top initiative for 17% of organizations, followed by customer experience (16%) and then Inventory, Logistics and Fulfillment (15%).
- Over 90% of businesses are “intensely focused on achieving ‘data-centricity’ across their organizations.
How to Prepare for the 2018 Holiday Shopping Season
In execution, it may not be quite so simple. But the plan certainly is.
To succeed this holiday season, look back at your past strategies and assess what’s worked and what hasn’t. Then, look ahead, and put data-centric and customer-centric approaches in place that will future-proof your strategies from here on.
For specific tips on managing peak traffic volume (including insights on stabilizing your infrastructure, load balancing, and lazy loading to maximize web performance), read our blog: 3 Tips to Deal with Seasonal Peak Volume.
If you’d like more holiday-centric tips on how to be ready for the Cyber Five (and the rest of the 2018 holiday shopping season), read our holiday preparedness blog or opt into our 5 Scalability Tips email series.
18 October, 2018