On Thursday, December 17th, NetElixir partnered with BWG Strategy for our last webinar of the year. NetElixir’s Founder and CEO, Udayan Bose, presented 2021 Brand Playbook: Holiday Insights, Real Time E-Commerce Sales Data, and Digital Consumer Behavior.

Holiday Data

NetElixir’s Retail Intelligence Lab analyzed the holiday e-commerce sales data from November 1st to December 15th, comparing it to the daily data of the same period in 2019 to see the YoY trends and growth. We wanted to see if and how customers continued shopping post-Cyber 5. 

The strong December e-commerce sales numbers helped to boost the total YoY online sales growth between November 1 until now to upwards of 30%. NetElixir saw “explosive growth” after the Cyber 5 holiday concluded, remarks Bose. This first week of December had more than double the growth compared to the same post-Cyber 5 period from any year since 2016. While 2020’s Cyber 5 was more muted compared to previous years, the first 15 days of December saw exceptionally strong growth compared to last year:

Advertisements early in November prompted shoppers to get a head start on their holiday shopping to ensure timely deliveries. October’s Prime Day event – which boasted Black Friday-like deals – may have resulted in the lower-than-expected Cyber 5 growth. As deals continued or evolved in the post-Cyber 5 December (lasting largely until December 6th), consumers still opted to shop at their own leisure.

Cyber 5 Results

Cyber Monday had the highest conversion rate within the holiday season period under study; however, the day also had a lower visitor and buy rate. Those that did elect to shop on Cyber Monday converted quickly, but many consumers were not even shopping or searching online. Cyber Monday’s growth had a slow start, only picking up speed after 3 PM (local time). 

The draw of Cyber Monday may have been a bit diluted this year, as sales largely did not change from Black Friday to Cyber Monday. #BlackFriday had more buzz on Twitter than #CyberMonday at about 2.5X more message volume. Sales may not have been as lucrative on Cyber Monday, leading shoppers to be tired of repetitive promotions.

New products accounted for a large percentage of the Cyber 5 revenue share, as shown below:

“Brands that failed to share something new lost out – people craved novelty,” Bose explains. 

Emerging E-Commerce Trends for the New Year

We are entering a new era of online retail. Some emerging trends extrapolated from this year’s holiday e-commerce sales data are:

Needs Prevail over Wants: The pandemic has led to a shift in buying preferences towards essential product categories (ex. Food and Grocery, Pet Supplies) and currently relevant product categories (ex. Home Furnishings, Home Decor). This, however, is not fixed, as needs and wants are not concretely defined across all shoppers; each individual has their own considered essential items that they will continue to buy and search for. Marketers should curtail their product messages to showcase the utilitarian aspects of their products.

Shopping Fatigue or Lack of Novelty: There are signs that shopping fatigue may be setting in for many categories (like Apparel, for instance) that experienced a YoY decline in both new shoppers and revenue. However, this may also be due to a lack of novelty in promotions and products. Cyber Monday promotions were just a carry over from Black Friday, showing nothing new. Always-on customers want something new, something fresh, or to see a better deal. Marketers should keep rotating sales or featured products in order to keep customers’ attention.

The Latency Challenge: There were more frequent website visits in a shorter amount of time. Shoppers visited websites more frequently (+13% YoY), within a shorter span of time between first visit and purchase (-7% YoY). However, fewer shoppers purchased in the non-essential categories. For example, latency in the beauty category went down by 19% (204 to 166 minutes) between first website visit and purchase. 

Influence of Non-Retail: Milestone events in the non-retail space impact shopper behavior. Bigger events – such as the United States Presidential election – capture shopper’s attention away from online shopping, as well as drive up media costs. Online sales from December 11-14 grew by 70%+ YoY – which may have been influenced by the FDA’s emergency authorization for the vaccine. This positivity spike bodes well for retail sales, as consumer optimism rises, so does consumer spending beyond strictly essential categories.

Agility: Agility is a key differentiator in defining success stories. This was the most volatile holiday season that we have ever experienced. Massive unpredictability in demand made it very difficult for marketers to anticipate changes, forcing them to optimize on the fly. The NetElixir team alone had to execute over 40,000 tweaks between Thanksgiving and Cyber Monday for Lenovo’s Google Ads campaigns in order to keep up with the demand fluctuations. Agile marketers are a necessity moving into 2021. 

Your 2021 Brand Playbook

Consumer preferences are continuing to evolve throughout the course of this pandemic. For a full, customized review of how your brand can be ready for the new year, schedule your complimentary consultation with our experts at https://stage.netelixir.com//2021playbook/. 

Convenience

“We don’t think the importance of convenience will diminish. A fundamental question is does your product simplify someone’s life,” Bose explains. Again, each shopper has a unique perspective on what is useful to simplifying their lives. Examine your buyer personas for how you can best simplify their day-to-day lives.

eMarketer projected 7.4 million new digital buyers in 2020. The coronavirus pandemic dramatically accelerated the digital trend – and these new-to-online shoppers are exhibiting their own unique traits and buying patterns. For instance, their average order value (AOV) is about 12% higher than the pre-pandemic shopper and 1/6th of these new shoppers have made 7+ orders in the last 6 months. This shift to digital is a once in a generation phenomenon. Pandemic shoppers are becoming their own category so marketers need to understand these shoppers’ behavior to fine-tune messaging unique to them in order to win them over. 

Convenience is a matter of the ease of online shopping and delivery, as well as the online shopping experience itself. Ensure an easy and frictionless shopping experience to welcome shoppers, new and experienced alike, to your site.

“If you take care of shoppers, if you speak to them in their language, they’re willing to shop with you,” Bose says. 

New Value

The pandemic shopper is a highly value-conscious shopper, both in terms of monetary value and social value. Gen Z shoppers, especially, consider a brand’s mission when considering a purchase. As Gen Z comes into more purchasing power, brands will no longer be able to stay silent on important social issues.

On the monetary side, thriftiness is a driving factor of younger shoppers. Thriftiness becomes a form of self-expression and a value by which individuals define themselves. Consumers are also increasingly able to compare prices and brands as they can easily jump from tab to tab. The resulting trend sees consumers continuing to seek the greatest value from every purchase.

E-Commerce sales saw a spike on November 23rd, as Black Friday promotions started. However, as those promotions didn’t change, growth declined due to stale deals:

Customers expect novelty and continuous changes in terms of products, promos, and pricing.

Give your customers a reason to keep coming back to your site. Understand what products are getting pandemic lift (i.e., skin care products rose 44% YoY and make-up kit sales declined 36%). Priorities and essential items are changing over the course of the pandemic.

Retailers and marketers should ask themselves what unique value are they sharing with their customers?

Always Connected

“Mobile has really really been a game-changer this year,” Bose explains. 

Mobile has had a huge impact on e-commerce sales, as 55% of all Cyber 5 orders came from a mobile device. Digital is an integral part of our life, as the physical and virtual world have blended. The gap between digital and physical retail experiences will slowly disappear.

The era of the always-on consumer is here. Marketers need to meaningfully and responsibly engage their consumers at every touch point.

Retail Trends

Tomorrow’s retailer has to consider today’s retail trends. Modern shoppers look for brands that offer convenience, promote a healthy lifestyle, create new value, know their customer, and have an integrated digital strategy.

The explosive growth of retail service providers will continue and co-marketing opportunities will emerge. Real-time customer intelligence and actionable insights are more critical today than ever before. Data is a must-have as trends, behaviors, and opportunities change so quickly. 

“2020 has been a year where data became 1,000 times more important,” Bose summarizes.

The post Holiday E-Commerce Sales appeared first on NetElixir.

Guffey explored how 2020 has delivered significant insights that we can use to better inform our holiday strategies and restructure our future business models. To prepare for the unpredictable holiday season, retailers and marketers should have a Plan A and Plan B in place, to be able to adapt to changes and opportunities that arise.

The COVID customer is constantly changing. The needs of your existing customers have changed and the coronavirus pandemic has caused new needs to emerge, such as a heightened sense of security and transparency. By constantly learning and understanding how new and existing customers evolve, retailers are building out their future success stories. 

Excelling in the new normal relies not only on effectively engaging with customers, but having strong and reliable partnerships to better navigate new demand generation. Guffey explains that the right partners with the right logistic aspects cultivate a last mile opportunity to “create loyalty with customers to drive an experience and to really improve your impact or your current channels.”

We need to adopt a new, critical thinking mindset to continue to overcome the coronavirus pandemic to seize unique opportunities that may arise. 

The Delivery Experience Represents a Market Opportunity for Peak 2020

With less in-person meetings, it may be hard to gauge customers responsiveness; however, Guffey notes that there is still critical importance to the last one miles. Delivery becomes a pivotal component of the customer experience: the customer journey expands from first website visit to receiving their package. Increased touchpoints and understanding digital body language – such as frequency of website visits, social interactions, and time of purchase – become crucial aspects of effectively engaging with and reaching customers. 

Guffey stresses the importance of being as close to the customer as possible. The realignment of fulfillment centers put products closer to the customer. 

UPS leverages their own warehouse space to help businesses be closer to their customers. Guffey explains, “Speed is important; also, reliability is a big component of that, but how do you get closer to the customers to be able to fulfill orders?”

The answer to that question includes ground next day service instead of strict reliance on air travel. By being closer to the customer, retailers can consolidate their supply chains to prioritize value and aim for targeted next-day delivery. Close proximity to your customer base can improve costs as well as customer satisfaction because of quicker deliveries. 

The coronavirus pandemic prompted the rapid growth and maturation of ecommerce.  There are opportunities to tap into the digital acceleration and new customer channels. Leveraging mobile and digital platforms can drive different and unique customer experiences to reach new demographics and cultivate loyalty.

Guffey says, “Producing new market-responsive products has really fast-forwarded to enable new businesses to move to the forefront.”

Opportunities Created by the Coronavirus Pandemic

It is no secret that new customers are buying online for the first time. Guffey discusses new individuals and demographics who are online because they have been forced to shop online. Now, these customers are discovering new brands, new digital experiences and realizing that the online shopping experience is secure and convenient.

But existing customers are also undergoing their own digital transformation. Existing customers are increasing their frequency of online purchases. Guffey says that we are “quickly transitioning to a primary online experience.”

Across the board, online shoppers are discovering the benefits of quality, convenience, and security of the ecommerce world. Retailers and marketers should ensure that their products, business, and ads reflect these tenets to continue to encourage shoppers to their websites. 

Businesses are reinventing themselves to adjust to the new online shopper experience and digital demands. Creative avenues keep the brick-and-mortar store as a critical hallmark of the retail experience, as BOPIS and curbside pickup gain popularity. Logistics becomes not just about moving a product from point a to point b, but also moving information around. By keeping the customer in the loop of shipping expectations, retailers can create a satisfying last mile experience that elevates the entire shopping experience.

The Peak 2020 Holiday Season

Consumers are planning to spend more on essential items, while cutting back on non-essentials buys, detailed below:

However, product demands and inventories are shifting month to month, so this list may look very different come the end of the holiday season. Guffey emphasizes that just because people are planning to spend less on non-essential goods does not mean that demand has dropped for those products. There is still significant growth for non-essential items, but there is a more dramatic rise in essential goods because of the necessities to safely navigate the coronavirus crisis.

By being nimble and continually monitoring changes in consumer behavior and demands, marketers and retailers can quickly respond to the ever-evolving digital landscape. Creating a successful holiday season strategy comes from making a Plan A for what is known and a Plan B for known unknowns.

For the knowns, consider the importance of ecommerce and digitization, last mile capacity challenges, pre-holiday inventory, and agility of manufacturing and supply chains. The holiday season calendar also looks different this year; last year, the peak period was compressed into about 17 days. Peak 2020 will most likely be longer, especially as businesses may run sales earlier to kick off the holiday season sooner to recapture lost sales in Q2. 

Unknown knowns to consider for your Plan B include questions of consumer behavior and if the socially distanced holidays will drive more gift exchanges seen at the onset of the pandemic, what will the consumer outlook be post-election, and what will officially kick off the holiday shopping season? 

 For UPS, peak planning typically starts in January to ensure network reliability and support throughout the year; 2020, however, has upended all known plans. It is important to cultivate a different shopping experience, especially within that last mile.

Key Takeaways

• Businesses that rely on products must be diligent about their supply chains, both inbound and outbound.
• ECommerce demands are creating significant pressures on last mile logistics, which will only worsen during critical peak seasons. Having a main Plan A and backup Plan B will help keep your business nimble.
• The coronavirus pandemic is a digital catalyst, increasing the rate of change and creating new customer demographics that are likely to continue to play a prominent role in the future of retail.
• Joint planning with quality logistics partners will pay significant dividends in the level of preparedness for peak 2020 and beyond. 
• UPS has immense logistics capacity and capability throughout the year and especially during peak seasons to help out small and medium businesses. 

Further Reading on Holiday Insights

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

The post Strategic Views for Peak 2020 with UPS appeared first on NetElixir.

Last week, on September 10th, NetElixir and Lenovo celebrated our 10 years of growth partnership through a special webinar presentation on A Different Holiday: Opportunities and Challenges in a Covid World. We were joined by Ajit Sivadasad, the founding executive of Lenovo’s global online strategy.

NetElixir + Lenovo

Lenovo was founded in 1984 with a vision to become the world’s greatest personal technology company and to create smart technology for all. Today, Lenovo is the number one PC company in the world with almost 25% market share. Lenovo is also the number one Data Center Group in the world in terms of performance. 

Ten years ago on the day of our live webinar presentation – September 10th – NetElixir started to manage Lenovo’s paid search campaign in North America. Since then, NetElixir has increased Lenovo’s paid search revenue thirteen-fold, expanding the paid search revenue contribution from 8% in 2010 to 17% in 2020:

Udayan Bose, Founder and CEO of NetElixir, says of the growth partnership: “It is a fascinating journey and we consider ourselves very, very privileged that we got this opportunity to not only partner with Lenovo as an extensive of their team, but to have this unique view from literally almost the best possible vantage situation, where we could see as to how the different strategies and a very powerful and compelling vision was able to drive the company and get it to the level that it currently is: the number one PC manufacture and one of the most recruited brands in the world at this time.”

All of us at NetElixir and our Lenovo team are very grateful for this milestone and look forward to many more years of partnership ahead.

Impact of COVID-19 on Online ECommerce: A Turning Point

There is no one method of success during these unprecedented times; as Ajit Sivadasan says, what works for one person or company will not work for everyone. However, based on Sivadasan’s experience over these past six months where he knows a little more than at the beginning of the pandemic, he is sharing stats and insights into what will change after the pandemic and what could stay the same. 

The coronavirus pandemic is quickly accelerating the disruptions of traditional business models. Some of the broader trends Sivadasan narrowed in on were more connected health, demographic shift, content, the connected individual, pay to use, transportation and home ownership, education, experiential commerce, and redefining retail, as detailed below:

Sivadasan furthers, “We are on the verge of a generational shift which is, in many ways, from an online standpoint, going to accelerate adoption.” 

Individuals are connected now more than ever, despite social distances. Digital communication and virtual events help keep us in touch. These digital connections will have significant implications on advertising, targeting, and online selling as everyone can be reached virtually anywhere and anytime. Content form and content consumption is changing as well, as content becomes more of a social and brand currency that can be shared and changed. Video production alone is overwhelming – in 2019, 500 hours of videos were uploaded to YouTube every minute.

“The numbers in terms of how content is used and is being created is staggering,” Sivadasan says.

Consumer sentiment is changing, as people seem more inclined to adopt a pay to use means rather than strict ownership. In the future, we could see more reliance on streaming services and bundling options, allowing people to pay for what they use rather than outright buy the whole thing. People expect everything to be available to them, especially in the growing digital age. 

We are quickly undergoing a redefinition of retail that could move to more experiential retail. Sivadasan notes that we are already evolving in the retail space, as physical retail is changing to be more experiential rather than overtly salesy. 

The coronavirus pandemic awakened this disruption across business models around the world and accelerated the digital transformation by a few years. As good as these new innovations can be, however, the pandemic is ushering in a slew of challenges.

Macroeconomic Trends of the Coronavirus Pandemic

For consumers living during the coronavirus pandemic, they are most concerned with their own financial security and navigating the new work- and learn-from-home landscapes. We are seeing new categories of online shoppers, which in turn redefines customer behaviors and expectations. 

Everything is digital or online these days.

What does that mean for small- and medium-sized businesses? While SMBs are in survival mode, as Sivadasan puts it, and preserving their cash flow, they have to shift their outlook to innovation and partnership. This is a crucial time to be online, to transform aspects of business to curbside or delivery, to offer new digital and online services to consumers to keep them connected and loyal. “Leverage your environment to be more virtual-friendly to [your] consumers,” Sivadsan advises.

We are seeing a consumerization of enterprise and B2B businesses. Lenovo is seeing more of a demand from individuals and businesses asking to ship products directly to their remote employees rather than divvying out products themselves. Businesses are focused on sustaining their operations remotely. As the supply chain fluctuates and demand turns from businesses to individuals, Sivadasan says that companies need to begin “optimizing for a quantity of one.” This shift from optimization for the masses requires different business model, a reevaluation of cost, and more customer-centric means.

Store traffic has decreased 40%, which will be exasperated by many stores deciding to shift their Black Friday events to solely online. Work-from-home equipment has seen a 42% increase in demand. Across the board, consumer electronics ecommerce has grown 58%, becoming more popular than commercial products. Lenovo themselves have seen a dramatic increase in consumer products such as laptops, monitor displays, gaming products, and accessories like headphones. 

Sivadasn says, “We are seeing a significant demand [in consumer electronics] because people are trying to be connected and trying to be productive.”

As macroeconomic trends continually favor ecommerce, online retail is assuredly here to stay. 

The Seismic Shift from Retail to Etail

“Innovation is happening in terms of the digital tie between physical retail and online retail.” – Ajit Sivadasan, founding executive of Lenovo’s global online strategy

A 55% increase in July online spending could offset some of the deficient in the retail space overall, as long as ecommerce sales continue to grow and more brands invest in their  ecommerce experience. Some 25% of North American stores are turning into fulfillment centers to cater more to ecommerce demands. 

By some estimates, the coronavirus pandemic accelerated the digital agenda by three to five years, affecting businesses and customers alike.

As noted above, native digitals are much more comfortable staying in the digital space, with 73% likely to continue shopping online. However, we will also see a much bigger participation from the Baby Boomers are they gradually becoming more comfortable navigating the online space. Sivadasan explains, “Even the ones who were reluctant to use online in a big way are going to shift online.”

These statistics are not surprising; Lenovo’s website traffic is up 70% and many other brands are seeing huge increases in their online conversions. However, the challenge is in creating an online experience that is comfortable for both experienced and new users. Online entities will have to make both their mobile and desktop experience more user-friendly to those who are not familiar with digital access to make it easier for all shoppers to have the experience they would like to have.

Mobile usage has been increasingly dramatically as is, but Sivadasan forecasts that there will be a substantial increase in mobile checkouts. 

What Does This Mean for the 2020 Holiday Season?

This holiday season, consumer sentiment will most likely shift to value and essentials. Solution selling will most likely be the stocking stuffer this holiday season. Sivadasan explains, “There is an opportunity to think about not selling discreet products, but to think about selling experiences, and by extension selling solutions.” People will be careful of how they spend and will most likely focus on essentials. 

Brand loyalty has shifted and people are more comfortable with trying different and new things. They have the ability and chance to visit any store online. “Advertising is the only limit,” Sivadsan says.

This holiday season, there is expected to be a 18% growth in ecommerce holiday revenue for 2020. 

The holiday season will start earlier this year. Black Friday events usually drive foot traffic to brick-and-mortar stores to kickoff the holiday season; with many brands holding virtual Black Friday sales instead, there’s no need to pick just one day to launch the holiday season. The 2020 holidays will begin earlier, last longer, shift to online, and could see contention between demand and supply. 

Brands have to adapt and evolve to the new normal. By emphasizing value over price, they will innovate the solution-selling aspect consumers are looking for. As digitization ramps up, there will be new solutions to share and new customer demographic who will need more education and less promotional content. As loyalty is shifting, brands will have to do more than what they did pre-pandemic to keep their existing customers. 

Lastly, Sivadasan notes that accelerated purpose will help brands evolve with the new normal. The pandemic pushed many aspects of life into a new perspective and it is increasingly more important for brands to stand for something. Brands should have a clear sense of purpose and commitment beyond just selling products. “Purpose will be the center stage in many cases,” Sivadasan concludes. 

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

The post A Different Holiday appeared first on NetElixir.