Adobe Digital Insights
by Giselle Abramovich . Senior & Strategic Editor . CMO.com October 27, 2016
Beyond the three big online shopping days this holiday season, ADI forecasts 57 days will bring in more than $1 billion each in online sales.
Lower priced goods online, free shipping, and product availability are the top reasons consumers prefer online shopping.
While the majority of folks will conduct transactions on desktop, the mobile phone will be the No. 1 platform for browsing.
The upcoming holiday season will be the biggest online shopping extravaganza yet, according to Adobe Digital Insights (ADI), which predicts 11% growth year over year (YoY). All told, holiday online sales are expected to reach $91.6 billion.
According to ADI’s 2016 “Holiday Prediction,” Black Friday will set record sales, passing $3 billion for the first time, and Cyber Monday will be the largest online shopping day in history. Thanksgiving Day will grow the fastest, reaching $2 billion in online sales (15% YoY growth), Black Friday will reach $3.05 billion (11.3% YoY growth), and Cyber Monday will hit $3.36 billion in online sales (9.4% YoY growth). Giving Tuesday will hit $2 billion for the second year in a row, and Green Monday is set to be the first $2 billion-dollar day in mid-December.
“It’s clear that consumers have become more comfortable spending money online,” said Tamara Gaffney, principal analyst at ADI. “The convenience of not having to go into stores and deal with the stress and strain that take place during the holidays looks like one of the primary drivers for online sales growth this holiday season.”
ADI’s “Holiday Prediction” report is based on an analysis of 1 trillion visits to more than 4,500 retail websites and 55 million SKUs. Additionally, ADI conducted a survey of 1,000 consumers to better understand their preferences about online shopping during the holidays.
Beyond the three big online shopping days this holiday season, ADI forecasts 57 days will bring in more than $1 billion each in online sales. Of those, 53 will occur consecutively–up 71% compared with the 31 straight days in 2015. Washington, D.C., Washington, and Nevada are predicted to see the largest growth rates this year, while Arkansas, West Virginia, and Mississippi are set to grow the slowest.
“There is a high correlation between growth rates and the share of population with a graduate degree, as well as more student and total debt, and higher rent as share of overall income,” Gaffney said. “Higher graduate degrees oftentimes equate to higher salaries. Higher debt amounts could mean a likelihood to spend more and be less thrifty, especially during the holidays.”
ADI also took a close look at why consumers are more open to spending online during the holiday season. Lower priced goods online, free shipping, and product availability are the top reasons, the report said, yet focus on convenience factors increased more than ever before.
Furthermore, ADI found that holiday shopping will start earlier than in years past. In fact, 31% of consumers said they will start shopping before Nov. 1 and 27% will start before Thanksgiving. ADI also is predicting that 12% of all Christmas decorations will be bought before Halloween, up 20% from last year.
“The fact that people will start to shop earlier isn’t a surprise, since we are seeing many retailers focus on offering sales and promotions earlier in the holiday season,” Gaffney said. “What’s more surprising is the 24% year-over-year revenue growth that is predicted to occur the last two weeks of December. Quicker shipping, coupled with later shipping cutoffs and the availability of click and collect, are extending the holiday season.”
Based on its survey of consumers, ADI found that 25% of people will pay a higher price for items purchased during the holiday season. Consumers are willing to pay a premium in return for quality assurance or, perhaps, due to brand loyalty, Gaffney said.
In breaking down holiday shopping trends, ADI found that, for the first time, mobile will exceed desktop during holiday 2016 (53%) in terms of website visits. While the majority of folks will conduct transactions on desktop, the mobile phone will be the No. 1 platform for browsing. According to the analysis, mobile will contribute one-third of holiday sales this year.
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