NetElixir’s Holiday Forecast: 9% YoY growth this year.

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2023 Holiday Trends Marketers Should Know

Securing Attractive Deals

Customers are deal-hunting this season so keep promotions rolling. Consider discounting a different product or product category each week to entice customers to return to your brand. To encourage more units per order, leverage hyper-personalization and AI on top product and category pages and frequent nudges to influence shopping behavior.

We’re seeing a decreasing pool of pandemic-era savings and the highest every point of outstanding credit balances; there is not as much cash flow as customers had in prior years, so they will be extra vigilant about securing the best deal and sticking to a budget. Keep an eye on different trends to ensure your product portfolio is evolving, relevant, and in line with changing customer preferences.

Recent Online Sales Boost

Since the latter half of August, NetElixir has noted upward trending online sales. Back-to-school sales have been fairly strong and are always a good indicator of how holiday sales will fare. The holidays may continually show a demand spike around sales events before a significant post-holiday slump. Sales events, like Amazon’s second Prime Day (Early Access) trigger a surge in demand, but also see a significant, post-event sales drop. Keep promotions consistent to balance out early holiday shopping and the long-term bargain hunters.

Role of Mobile

The role of mobile in searches and orders is only growing. Between comparison checks with other online offers while browsing in store, downloading apps for exclusive deals, mobile-only offers, and simple convenience, people are opting to shop from their mobile phone more often. Categories like beauty and apparel have seen the most notable rise of mobile orders within NetElixir’s dataset.

Expanding Customer Journey

So many factors, influences, and touchpoints go into every purchase, so it is important for brands to be wherever their customers are searching and shopping. We expect marketplaces and retail media to account for 55-58% of total online holiday sales this year. TikTok emerged as 2022’s hottest advertising channel, rivaling Google and Meta, so we expect the social commerce trend to continue.

As 2023 is the first truly AI-powered holiday season, it is important for brands to leverage AI to create hyper personalized content to engage with customers and nudge them along the funnel.

What We Learned From The 2022 Holiday Season

Key e-commerce trends from the 2022 holiday season include:

• Customers are increasingly savvy shoppers — if sales were not up to their expectations, they did not make a purchase.
• The holiday season is only expanding. Customers are getting headstarts on their shopping with lucrative deals in September and October in hopes of avoiding inventory issues and stretching their budget to cover bigger gifts. The second Amazon Prime Day (Early Access) in October has become a new norm to kickstart holiday shopping.
  
• Performance Max campaigns accounted for 48% of paid search orders during Cyber 5 2022 and will continue to play a crucial role in brands’ advertising strategy.
• Flexible financing options, such as BNPL and BOPIS, drove a high percentage of last-minute sales as customers liked the assurance of having the perfect gift now.

A Breakdown Of NetElixir’s 2023 Holiday E-Commerce Forecast

We feel cautiously optimistic going into the 2023 holiday season.

For the week of November 12th, we predict strong teaser promotions spurred by sales events leading into Black Friday and the rest of Cyber 5. These teaser promotions and previews will be the next step from pre-holiday promotions that began in September and October to get people excited about their Black Friday must-have lists.

We foresee Black Friday promotions beginning the Monday before Thanksgiving on November 19th. As we saw last year during Cyber 5, (which starts on Thanksgiving Day and lasts until Cyber Monday), we expect week-long Black Friday deals that highlight a specific product or category each day. We believe the trend of deep discounting will continue throughout the entire week and that brands will get creative with their specific promotions to keep customers engaged.

The last week of November and first week of December will be highly competitive; however, there will be ample opportunities to capture consumer demand, so a powerful marketing strategy — as well as a backup plan to stay agile — will be necessary. Some large retailers may test creative promotional strategies this week or run special mini-holiday deals of their own. Smaller businesses will need to remain nimble and be ready with their game plans to seize any opportunities they can. 

During the week of December 10th, we expect BNPL (buy-now-pay-later) models to continue to be a prime driver of online growth. BNPL started to pick up traction in the beginning of the year and we expect momentum to continue with a 20-25% increase in BNPL compared to H1 2023.

The week of December 17th, a day or two before the last shipping day, will most likely see a rise in BOPIS commerce. Many retailers will begin lowering their ad spend this week to better ensure online orders arrive in time for Christmas morning. However, this could be a time for smaller brands to promote their BOPIS options or brick-and-mortar offerings, so be sure to showcase every advantage your store has and leverage the greater online activity inspired by big brand deals and last-minute frenzies. However, inventory issues are likely to persist this week as many retailers stocked up early; be sure to keep your website updated with what you have in stock and offer alternatives for popular sold out items.

Finally, deep discounts on post-holiday inventory will influence the “Me-Buy” week following Christmas and leading up to New Year’s Day. Consider changing your promotional language to highlight your sales and cater to your high-value customers’ self interest.

Methodology Behind Our E-Commerce Forecast

Since 2013, NetElixir has been releasing our E-Commerce Holiday Calendar to forecast the day-by-day online sales volume to help marketers create an effective holiday strategy. We aggregate and analyze weekly data of website visits, website sales, channel-wise investments, and CPC data across different retail industries within our dataset. We track this data throughout the year, segregating based on device, and compare it to the previous years’ week-wise key metrics. Using our proprietary AI-powered customer intelligence platform, LXRInsights, to track and analyze the real-time weekly data.

The post NetElixir’s Complete Guide To The 2023 Holiday Season appeared first on NetElixir.

Key e-commerce metrics from October include:

• Gifting sales are up 5% YoY after lagging behind 2021 numbers at the beginning of the year
• Beauty, women’s apparel and accessories, and food and grocery are all trending upward this year
• Total October Online YoY Sales: Gifting: +5%, Beauty: +17%, Women’s Apparel: +7%, Food: +15% 

Customers are starting their holiday shopping early, as well as preparing for holiday celebrations and get-togethers. We forecast continued growth, especially within the above categories, throughout the months of November and into December. Our 2022 holiday e-commerce sales forecast calendar, which helps marketers plan their day-by-day promotions, kicks off this week, on Sunday, November 13. Use our guide to plan your best promotions in anticipation of high sales days. 

“Online holiday sales have strengthened since the middle of October for many categories,” says Udayan Bose, Founder and CEO of NetElixir. “Consumer preference has shifted towards ‘value-shopping’. Also, consumers are in an always-on shopping mode, scouring for deals and prices that meet their personal value perceptions.”

How To Optimize Your Holiday Marketing Strategy

If you’re looking to put the finishing touches on your holiday strategy, our experts recently shared some last-minute holiday hacks. In terms of SEO, it’s important to build authority for your holiday pages. To retain your authority for holiday pages year after year, keep your URLs specific to each promotional campaign (i.e.example.com/black-friday-sales or example.com/cyber-monday-deals) and don’t change your URL for each year. Add specificity to your H1 tags. Use top of funnel pages to link to promotional pages and consider adding countdowns to your biggest sales or temporary 302 redirects to direct from your homepage directly to promotional pages.

For your content strategy, highlight your sales and deals with a sense of urgency; customers are driven by discounts and studies have found that customers are willing to share their personal information in exchange for a coupon. Label your deals clearly in your ads and be mindful of timing and out of stock items; nothing is more frustrating to a customer than clicking on an ad only to find that the deal expired or the item is no longer available. For your campaign strategy, optimize your RSAs and Performance Max campaigns to reach across the entire Google ecosystem. RSAs offer fifteen headers and four descriptions – use all the space you can to maximize your potential of reaching the right customer. Enhance your campaign performance with our Google Scripts, which allow you to automate certain aspects of your campaigns so you can focus on what’s important. 

Be sure you build your brand all year long by writing organic content that will help people find what they’re looking for. Even as we’re just getting into the 2022 holiday season, remember it’s not too early to think about your 2023 holiday season! 

NetElixir’s Holiday Forecast

Overall, our holiday growth forecast for the season remains at 7% YoY.

We have been accurately tracking holiday e-commerce sales forecasts for 10+ years. We leverage our proprietary AI-driven digital marketing technology, LXRInsights, to track and analyze real-time data of approximately 75 retail customers, ranging from small-to-mid sized businesses to enterprises. The team then utilized a proprietary forecasting model to convert the data into predictions. Data collection spanned seven e-commerce categories (including apparel, home furnishings, beauty, and more) that track mobile and desktop data, broken down by state, website orders and revenue, AOV, first purchase latency, and repeat purchase latency. 

Current forecasts are subject to change. We shared their full results, trend analysis, and more during a webinar. The webinar, titled Last-Minute Holiday Strategy & Resources for Retailers can be viewed here.

Sign up for our upcoming event, Cyber 5 Webinar: Results. Insights. Trends. to understand how the key online shopping metrics changed throughout this critical period.

Further Reading

• NetElixir’s Complete Guide to the 2022 Holiday Season
• Google’s Helpful Content Update: A Recap For Content Creators
• What’s Trending? The Importance of Trend Research in Your Marketing Strategy

The post New Insights Into the 2022 Holiday Season appeared first on NetElixir.

NetElixir forecasts slower than usual growth this holiday season, with a 6-7% YoY growth in e-commerce sales. While our predictions are more conservative than others, (eMarketer forecasts 14% YoY growth), a 6% increase on top of 2020’s 30%+ increase is no small feat. We estimate that this holiday season will bring in 500+ million unique website visitors across key holiday retail categories – gourmet food, fashion and apparel, home and décor, gifting, and consumer electronics.

A strong Q1, 2021 (34% YoY online sales growth) led many to forecast consistently strong and steady growth. That was not the case, as we saw a slower Q2 (about 5% YoY online sales growth) and a slower than anticipated back-to-school season (7% YoY online sales growth). With Q3 sales picking up more (about 19% YoY online sales growth) and we’re heading further into the holiday season, we see consumer interest is spread between a mix of categories. Fashion and beauty categories drove higher sales in Q2 and Q3, as shoppers sought to refresh their looks for traveling, dining, and other experiences they indulged in throughout the summer and warmer months. 

The pandemic has led to a massive surge in e-commerce, as online sales currently account for 19% of total retail sales (up from 14% in February 2020). Mobile traffic is driving more sales than ever before at 49%. We anticipate mobile shopping will be the primary sales channel this holiday season, contributing to 52% of total website sales.

 Key E-Commerce Channel Trends

It’s crucial to ensure your website is optimized for easy mobile searching and the holiday shopping season. However, other key e-commerce channels will also play an important role in shoppers’ online purchase journeys.

Amazon continues to increase its dominance on product searches: 74% of U.S. shoppers start their online search on Amazon. To appear on these searchers, we recommend optimizing your Amazon SEO. We anticipate that Amazon’s share of total online sales will cross 49% this holiday season. Fine-tune your Amazon growth strategy and use the platform as an extra distribution channel to introduce new customers to your brand. 

Beyond Amazon, other marketplaces are also growing rapidly. Instacart is expected to cross $1B in ad revenue next year. Placing ads strategically on high-traffic marketplaces can increase your brand awareness and exposure, though it is important to ensure your ads stand out amongst the competition.

Primary channels like Google, Microsoft Advertising, and Facebook are applying AI to help marketers target and engage customers more efficiently and at scale. We estimate that 50%+ of Google ad budgets are already being influenced by AI. 

Every business and channel is trying to understand how digital advertising will change with the demise of third-party cookies next year. The attributable revenue of Facebook ads has declined significantly since Apple’s iOS 14.5 update, which allows users to block tracking and data collection. 

Gathering valuable customer insights this holiday season will not only improve your performance this year but assist your post-holiday strategy in the cookieless world next year. During this uncertain and unpredictable holiday shopping season, real-time data and insights will be your guiding light.

What Makes This Holiday Season So Uncertain?

New Online Shopping Habits

The pandemic changed the online shopping landscape. Between altering customers’ personas based on what they value most, to bringing in over 7MM new-to-online shoppers, there are many new customers to engage. We estimate that 25% of the estimated 1.8MM new-to-online shoppers from 2020 will continue to shop online.

Last year, the pandemic-influenced holiday season brought a host of new-to-online shoppers to discover new brands and products. Those shoppers had no history with e-commerce and had unique trends, behaviors, and purchase journeys. We’ve had over a year to get to know these new shoppers and incorporate their consumer profiles into our overall marketing strategy. 

It’s not just new-to-online shoppers, though, whose changing habits require new strategies and tactics this season. Q2 e-commerce sales dropped YoY, as customers chose to spend their budgets on experiences and traveling rather than physical items. Our experts predict that these new shopping habits will continue through the holiday season. 

Your Holiday Strategy Tip: Consumer Insights

Be agile and flexible to your customers’ changing needs and expectations. Don’t be afraid to ask them directly what they want through surveys, social polls, and more. Use this time before the holiday frenzy kicks off to do A/B testing with social posts, ad graphics, and copy so you can get a better understanding of what makes your customers engage with your brand. These learnings can improve your holiday campaigns, as well as inform your 2022 strategy.

This holiday season, focus on simplifying your customers’ lives and giving them what they want.

Inventory Shortages

Many shoppers are getting an early start to the holiday season, in anticipation of growing supply chain disruptions. The increased demand during the post-pandemic recovery, paired with disruptions caused by geopolitical unrest have posed challenges for retailers and shoppers alike. Last year, 26% of shoppers completed their holiday shopping by the first week of November, reports NRF. We’re expecting an earlier start to the holiday season, but it’s still unknown just how many customers will stop shopping in early November. 

While some retailers can’t keep items on the shelves, others have an overflow of old inventory that hasn’t been selling. This makes a perfect opportunity for deep discounting on Black Friday and Cyber Monday. NetElixir can help showcase inventory surplus through gift guides and blogs that highlight the advantages and uses of these products. We’ll wrap them together with similar products for a similar target audience.

Your Holiday Strategy Tip: Communication

Ensure your holiday landing pages clearly communicate any changes in your inventory. Adding language like “selling fast” or “only a few left” will drive urgency in customers. If products are out of stock, direct customers to similar items or add them to an alert for when it’s back in stock. Add BOPIS options if stock returns closer to the holidays. 

Waning Consumer Confidence

Prevailing uncertainty caused a sharp drop in consumer confidence. The University of Michigan’s Consumer Sentiment Index fell by 13.4% from July, recording the least favorable economic prospects in more than a decade.

Consumers are switching brands primarily because they found a better value, according to McKinsey. Over 40% of consumers are also looking for what’s in stock. Being transparent with inventory, shipping delays, and deals will help customers trust your brand, even if overall consumer confidence is lacking.

Your Holiday Strategy Tip: Authenticity and Transparency

Humanize your brand to your customers so they know that there is a face that they can connect to. Connect with your customers on a personal level. Be transparent about any update or change that may impact a customer’s holiday shopping or package delivery.  

Building a Successful 2021 Holiday Strategy

The continuing supply chain challenges and low consumer sentiment pose a massive challenge for businesses. Competition is intense and uncertainty is high this season. Nimbleness and quick decision-making will differentiate the successes this holiday season. Have a plan B ready to stay ahead of changing variables and take advantage of any opportunities that come your way.

Your customers are your most important element this holiday season. By gathering better customer insights, you can target more effectively, thus wasting fewer ad dollars and getting better ROIs. Maximize your holiday performance with customer insights.

“This month, so far, has seen strengthening of online sales in some categories (namely, consumer electronics, apparel, and home improvement). If the online sales trends continue (and businesses can at least partially address the inventory issues), we will have a stronger than expected holiday season. Also, as the threat posed by the delta variant continues to diminish, holiday sales are likely to be positively impacted,” summarizes Udayan Bose, NetElixir’s Founder and CEO.

Further Reading

• Your 2021 Holiday SEO Strategy
• Designing Your 2021 Holiday Strategy
• NetElixir’s E-Commerce Holiday Calendar
• Holiday Kit

The post Insights Into the 2021 Holiday Season and E-Commerce Trends appeared first on NetElixir.