Every year, online retail merchants anxiously wait for the NRF (National Retail Federation) to release its projections for the holiday season so they can prepare accordingly. This year’s numbers are now live, and let’s just say things are looking up for online retailers who may have had a tough 2020. The experts project growth across most areas except for brick-and-mortar, which is to be expected. However, in a year with so much uncertainty, it’s interesting to see the continually rising consumer demand. There’s certainly much to be thankful for.
Let’s look at these key holiday sales statistics, so you can be ready for the most wonderful time of the year.
Holiday Sales Will Grow at Least 3.6%
We’re starting with the best news and that’s holiday sales (defined as sales made in November and December) growing between 3.6% and 5.2% year-over-year. Don’t be let down by these single-digit numbers—the jump pushes sales totals to anywhere between $755.3 billion and $766.7 billion. What’s more, the higher end of that range outpaces growth between 2018 and 2019 (4%, to total $729.1 billion) as well as the growth average over the last five years (3.5%). Each year’s festivities outdo those from the year before, which is especially needed in a year like this one.
Ecommerce Is Set to Jump 35%
It’s been at least six months since consumers made the shift toward shopping online, and ecommerce is still going strong. Even with brick-and-mortar stores reopening, there is a greater preference for virtual holiday shopping than ever before. EMarketer predicts a 35.8% jump in online purchases from 2019, bringing ecommerce spending totals to $190.47 billion. This will offset the decline seen in the brick-and-mortar category.
The “Cyber Five” Captures 20% of Holiday Sales
Several pandemic-related factors are already impacting this year’s holiday shopping timeline. For starters, Amazon’s Prime Day was delayed from July to October and gave consumers an opportunity to make some (if not all) of their gift purchases well before the “official” start of the holiday season. Additionally, retailers have been launching their holiday promotions earlier and earlier each year—first to compete with Black Friday deals and now to spread out demand. Offering discounts throughout November and December tempers the Black Friday rush and keeps shoppers from crowding stores during a time when social distancing is crucial. What’s more, it also protects supply chains from being overwhelmed.
All these factors have moved the holiday shopping timeline up considerably and has placed emphasis on the Cyber Five—the period from Thanksgiving Day through Cyber Monday. This weekend’s slice of the holiday ecommerce pie grows each year, and it’s expected to capture 20.5% this year. By Cyber Monday, expect sales to total a healthy $39.1 billion.
Experts Forecast Thanksgiving Sales to Rise 49%
The Cyber Five will only see a slightly larger slice of the holiday sales pie, but each day is forecasted to break its own records. Thanksgiving sales will dramatically rise by 49.5% to reach $6.18 billion, despite several retailers being closed. Experts predict it will be a strong day for “couch commerce” with consumers shopping on their mobile devices.
Did you miss our roundup of must-know Thanksgiving ecommerce statistics for 2020? Here are the CliffsNotes:
- Shoppers spent a whopping $4.2 billion on Thanksgiving last year.
- Average order value is roughly $140.
- Desktop conversion rates soar to 6.4%, followed by tablets (5.5%) and mobile (3.2%).
- Mobile orders comprise 45% of Thanksgiving sales.
- Nearly one-quarter (24%) of Thanksgiving sales are contributed to paid search ads.
- Turkey Day is a huge sales day, giving small businesses a 61% sales lift.
- 49 million American shoppers bought online last Thanksgiving.
Black Friday Will Have its First $10 Billion Spending Day
The second day in the Cyber Five, Black Friday is set to have its first $10 billion spending day in 2020. This is a 39.4% increase year-over-year, even as the deals have gotten hotter with retailers attempting to capture more market share. However, this doesn’t mean you can abandon your promotions. Aim for a 20% or larger discount and add some pizzazz to your site, so you can capture consumers’ attention.
42% of Consumers Started Shopping Early this Year
According to recent research from the NRF, 42% of consumers began their holiday shopping early this year. Of those surveyed in early November, 59% had already made at least one purchase (up 21% from 2010), but there was plenty more shopping yet to do. Respondents had only completed 26% of their holiday shopping, on average.
Why are so many people shopping early? Unsurprisingly, health and safety is a top concern for both retailers and consumers. Both brick-and-mortar and online retailers have responded by offering promotions ahead of the traditional Black Friday doorbusters, which shoppers have gladly welcomed. For those that have been to a physical store, 70% have been satisfied with the precautions, and 69% have been able to find all or most of what they were looking for. For those shopping online, a large majority (84%) are confident their gifts will arrive on time.
FedEx Expects to Deliver 7 Million Packages Per Day
Though the upswing of ecommerce is great news for online sellers, it’s a nightmare for shipping companies that are struggling to keep up with demand. In fact, FedEx CMO Brie Carere said the carrier has experienced Black Friday/Cyber Monday level shipping volumes nearly every day since March.
Popular carriers like FedEx, UPS, USPS and others are already under strain, so they’re eyeing the holidays with dread. FedEx in particular expects to deliver more than 7 million packages per day, and total holiday deliveries across all carriers will skyrocket upwards of 700 million. Data from Salesforce shows these volumes are roughly 5% more than what our current shipping system can handle.
E-tailers are preparing for “Shipageddon” by running holiday promotions in advance, shipping early to create a buffer and setting cutoff dates for customers. If you haven’t done so already, get your ship together for your online store.
It’s Peak Ecommerce Returns Season
As every e-tailer knows, with increased sales comes increased returns. It’s a reality of selling online, and it’s best to embrace the returns. We talk a lot about how ecommerce returns can increase customer loyalty, longevity and overall satisfaction, but that’s a topic for another time.
What you need to know for the holidays is that it’s peak returns season. Gifts might not work out for one reason or another, and buyer’s remorse sets in once the magic of the season has faded away. While you can’t avoid returns altogether, using these strategies can reduce the total number.
- Beef up your product descriptions. The main drawback of online shopping is not getting to see, feel or experience a product before buying it. Bridge the gap with in-depth product descriptions that tell shoppers everything they need to know. They’ll feel more confident in their purchases, and you’ll reap the rewards of fewer refunds to issue.
- Add high-res photos and videos. A picture is worth a thousand words, so a full gallery of photos and videos on your product pages is priceless. Show multiple angles of your products (and multiple body types if you sell clothing) and take a video of your product in use.
- Offer reviews and Q&A. Though you could sing the praises of your products all day long, consumers are less likely to trust the messaging of a brand than the reviews of other real customers. Add a reviews function to your product pages for social proof and let verified buyers answer questions for curious shoppers.
Ready to take advantage of the returns rush and make those second-chance sales? Add hassle-free automated returns to your site today!
Take Advantage of the Increased Demand
It’s shaping up to be a holiday season unlike any other, but ecommerce sellers have a massive opportunity to take advantage of the increased consumer demand and the newfound familiarity with online shopping. Get ready for the rush by following this checklist:
- Review your site. Did you know that site speed, ease of use, navigation simplicity and other elements of your site directly impact your conversion rate? Make sure your site is intuitive, so your customers can have a frictionless shopping experience.
- Solidify your seasonal staff. The holiday season can quickly turn into chaos if you’re short staffed, so hiring and training a solid team is imperative to avoiding disaster.
- Manage your inventory. You’ve ordered extra inventory for the holidays, and you’re prepared for a higher order volume. Double check that it’s all entered into your inventory management system, so you can maintain accuracy throughout the season.
- Launch automations. Automation facilitates greater productivity by handling busywork, and what better time to streamline workflows than during the holidays? Whether you’re automating shipping, ecommerce returns or another pain point, launch early to avoid any hiccups.
Need even more tips? Don’t miss our guide to Cyber Monday for online retailers.
