Since February 9th, NetElixir’s Retail Analytics Lab has been analyzing and aggregating ecommerce data across seven retail categories: Apparel, Food and Grocery, Gifting, Home Furnishings, Home Decor, Pet Supplies, and Tools and Hardware. We split our data into sixteen, 14-day periods to track the year over year changes in online shopping behavior as we try to determine the impact that the coronavirus has had on ecommerce sales.

Impact of Coronavirus Pandemic on Ecommerce Trends

As marketers and retailers think about their 2020 holiday season strategy that will shortly be in effect, having access to the latest trends is crucial to optimizing on the fly to capture new customers and opportunities.

McKinsey found that ecommerce in the United States grew 10 years in just a three month span. As of Q1, 2020, ecommerce growth was at 33%, up from 16% in 2019 – an increase that Bose calls “absolutely abnormal.” While we will most likely not seeing growth skyrocket to 33% again for the time being, the percentage of ecommerce sales will never go back to just 16%. Currently, we see ecommerce growth settling at around 22% of total United States retail sales.

Online sales continue to grow at an explosive rate, detailed in the chart below:

The Apparel retail category had a slow start, but with the nice timing of the stimulus checks in mid-April and the anticipation of spring, Apparel’s ecommerce sales picked back up dramatically. Since the middle of April, Apparel’s sales have grown steadily year over year as more and more consumers invested in their wardrobe again.

The Food and Grocery retail category saw tremendous spikes from March to June, but has since calmed down to hold steady at an average of 35-40% year over year growth.

The Home Furnishings retail category is on an explosive growth track since the middle of April and leveraged out around the end of August. 

As the habit of panic buying seemed to calm down around the first week of May and people have adjusted more to the new normal, NetElixir has context to believe that online sales will continue to grow at a rate of 40-50% year over year. Overall, the pace of ecommerce is continually substantial.

With the explosive rate of online growth and high conversion rates, now is the time to invest in ads. CPCs are still trending downwards, evidenced by the chart:

Your marketing dollar can be stretched further as each click costs less and conversions are high. Nimble marketers can gain valuable market share by investing in capturing these new digital shoppers. 

New Online Shoppers

 eMarketer expects 7.4 million new digital buyers in 2020. But where are these buyers coming from? NetElixir’s Retail Analytics Lab isolated where the new shoppers within our select data set are shopping from, detailed below:

For both the Home Furnishings and Tools and Hardware retail categories, we saw the majority of new online shoppers come from the Southern region of America. Understanding where new shoppers hail from could open more markets for retailers to concentrate on this holiday season. 

Mobile is driving more sales than ever before. In 2019, mobile sales accounted for 43% of all sales; in 2020, mobile sales now account for 48% of all sales. Retailers need to focus on ensuring their mobile site is optimized and user friendly, as NetElixir predicts that mobile sales could drive over half of all ecommerce holiday sales. 

2020 Holiday Predictions

1. 23-25% of all retail sales in Q4 will happen online. (Up from 16% in Q4, 2019). 
2. Incremental ECommerce Sales Projection for Q4 in the US (vs. Q4, 2019) is about $50B-$80B.
3. Holiday Shopping will start as early as in October first week. (That’s just 2 weeks away!)
4. Inventory stockouts will pose the biggest challenge this holiday season.
5. There is a possibility that instead of Cyber 5, we have Cyber 10 this year as retailers may stretch out the holiday season to reach more digital buyers and gain more online visibility.
6. Retailers will be lowering their sales promotions and focusing more on tapping into the demand surge by expanding their online visibility.
7. Over 5% of all holiday online revenue will be driven by new online shoppers (those who had not purchased anything online prior to the pandemic).
8. Enterprise and Large Businesses (>$250 MM revenue) will be increasing their digital marketing spend by upwards of 20% year over year to take advantage of the shift from stores to online.
9. Amazon’s share will increase from 43% of the total United States ecommerce to 45% this holiday season. The biggest driver for their holiday growth will be “faster shipping”. Amazon’s Prime Day 2020 will kick off a longer holiday season.
10. Buy Online Pick-up in Store (BOPIS) will be an important driver of ecommerce sales after December 10. BOPIS (includes curbside pickup) revenue will increase year over year by 50%+.

Even More Holiday Insights

What’s your #BiggestHolidayChallenge? Subscribe to NetElixir’s Youtube channel at https://www.youtube.com/user/NetElixirInc for weekly video installments as our holiday experts address your biggest holiday challenges. In short, digestible videos, we’ll share the latest data and insights to help guide your holiday season strategy. Tune in starting tomorrow as we answer What will the coronavirus-influenced holiday season look like?

• 2020 Holiday Data: Consumer Trends & Digital Marketing Strategies
• Strategic Views on Planning for Peak 2020 with UPS
• A Different Holiday: Opportunities and Challenges in a Covid World
• September 2020 Update on How the Coronavirus Continues to Impact Retail Ecommerce

The post Pre-Holiday Retail ECommerce Trends appeared first on NetElixir.

Overall, 73% of all respondents from NetElixir’s survey have an average to high level of comfort buying from a new brand — these potential customers just need the right opportunity to find your business. As these consumers are shopping almost equally on mobile (37.2% of respondents primarily shop on mobile) and desktop (37.9%), creating a seamless online experience across all devices is crucial to capturing these new shoppers. A very user-friendly online experience will ease in those new-to-online shoppers who are still learning about the digital world.

 ECommerce businesses have an enormous potential to attract new customers, which encourages a promising start to the holiday season and a chance for retailers strategically grow their digital presence. This holiday, entice shoppers to try something new by expanding your digital footprint and placing targeted ads where your audience is searching and shopping.

For more insights polled directly from consumers, download NetElixir’s new ebook. Along the Road to Recovery: How the Coronavirus Pandemic Reshaped ECommerce Trends and Online Shopping Behavior details four months of ecommerce data and strategic perspectives from academic and industry thought leaders to guide retailers to a better holiday season strategy. 

Learning Who Your Holiday Shopper Is

The pandemic holiday shopper is going to be different than any other holiday shopper before. Because there is so much uncertainty surrounding the holiday season and how customers will shop, Google notes that the retailer who responds the most quickly will probably be the most successful. The 2020 holiday retailer needs to be nimble and adaptable, while constantly learning more about how, where, and why their customers are shopping and searching. NetElixir’s proprietary customer analytics platform, LXRInsights, humanizes every click by giving real-time data on how users are interacting with your website. This holiday season, the most popular products and categories people are shopping for, as well as when and where they are shopping, are changing dramatically from prior years.

McKinsey’s customer sentiment reports show a higher and lasting intent to shop online, even after the pandemic subsides, especially among millennials. Digital shopping will be a huge factor of the new normal. 

Consumers are focused on getting the most value for what they spend and prioritizing essential goods. Initial consumerism resurgence in early August centered on self-pampering luxury items and sales, finds UPS Longitudes. While this trend is not sustainable, the category of self love will probably feature prominently in the holiday season as customers seek to treat themselves and their loved ones to comfort items. 

Product availability and shipping information drives what consumers buy, severing loyalty ties (though brand loyalty isn’t completely dead if it’s cultivated right). Ensure your website is updated regularly; if you have a strong social media presence, use stories for quick updates to keep customers informed about new deliveries, what’s out of stock, and shipping issues. Showing some behind-the-scenes of inventory and packaging can go a long way in humanizing your business this holiday season, while keeping customers in the loop. 

However, each retailer and marketer needs to understand who their own unique customers are, as well as their behaviors and preferences. Catering to and helping your customers will help you better navigate this holiday season.

FURTHER READING ON HOLIDAY INSIGHTS

• Google’s Digital Insights to Uncover Clues for Q4 Readiness
• The Holiday Season Starts Now
• Executive Panel Discussion: Holiday Season Insights Learned Over the Course of the Pandemic
• Getting Ready for the Near Future of Advertising with Microsoft
• A Different Holiday: Challenges and Opportunities in a Covid World

The post What Does Your Holiday Shopper Expect? appeared first on NetElixir.