Marketing & Advertising

4 Predictions for 2016 Holiday Shopping Season

Video content and free shipping will help to fuel growth in ecommerce sales overall and mobile commerce in particular during the 2016 holiday season, which starts now and runs through Christmas Eve.

Since 2013, I have been making a few holiday shopping season predictions for the ecommerce industry. These are not risky or provocative. They are estimates meant to remind us of the trends in our industry.

This time, two of my predictions (numbers 1 and 4) really have to do with marketing — one is an offer the other is a medium. The other two have to do with ecommerce sales growth. I have also included a recap to let you know how my predictions turned out last year.

1. 60 Percent of Online Orders Will Include Free Shipping

Target, like many retailers selling online, offers free shipping with a minimum purchase.

Target, like many retailers selling online, offers free shipping with a minimum purchase.

Offering some form of free shipping has, to a large extent, become part of doing business for online retailers. Shipping costs, according to several sources, are still the single greatest contributor to shopping cart abandonment.

Although about half of shoppers are willing to pay for relatively faster shipping, according to comScore and UPS, those same shoppers don’t want to pay for standard, ground shipping.

Bottom line, if your online store is not offering free shipping, you’ll likely lose business, since I am predicting that at least 60 percent of holiday ecommerce orders this year will include a free shipping offer.

2. Mobile Commerce Will Grow 60 Percent

To support my claim that mobile commerce sales will grow about 60 percent during the 2016 holiday shopping season, I will offer an anecdote and two facts. First the anecdote.

Recently, I spoke with the digital marketing manager for a brick-and-click retail chain. I mentioned that 58.9 percent of the traffic for one online store I help manage came from mobile devices. He thought that sounded low.

Keep this anecdote in mind when you consider that 63 percent of Millennials and 41 percent of Gen Xers have made purchases from a smartphone, again according to UPS and comScore.

Millennial and Gen-X shoppers, especially, are willing to make mobile commerce purchases, according to UPS and comScore.

Millennial and Gen-X shoppers, especially, are willing to make mobile commerce purchases, according to UPS and comScore.

Finally, comScore reported that mobile commerce for the 2105 holiday season grew 59 percent, from about $7.98 billion in 2014 to about $12.65 billion in 2015, excluding travel and large corporate purchases. So my prediction is really a continuation of this sort of explosive growth.

3. Ecommerce Sales Will Grow 13 Percent

Last year, I predicted 13.9 percent growth in online retail sales for the holiday season. Depending on which report you believe, I was off by perhaps half a percentage point. While I do believe total ecommerce holiday sales growth is slowing a bit because it now represents such a large number, online sales are still going to hit it out of the proverbial park in 2016.

In contrast, I predict that total retail sales, including brick-and-mortar sales, will only grow about 3 percent during the 2016 holiday shopping season. This makes ecommerce look even better.

4. Video Advertising on the Rise

This prediction is a bit vague and will, frankly, be hard to measure when I report back to you next year. But nonetheless, I predict that video advertising will play a more significant role in holiday ecommerce marketing, and in holiday retail marketing generally.

By some estimates, more than 90 percent of American shoppers research holiday gifts online. When it comes to holiday gift guides, video is the best way to show products. Well-produced video could therefore influence what shoppers purchase as gifts and from which stores they make those purchases.

Last Year’s Predictions

In 2015, for the third consecutive year, I made a set of predictions about the upcoming holiday season. It would seem that I got two out of four correct. I only missed my online sales growth estimate by something like a half a percentage point, depending on which set of results you believe.

  • “Many Shoppers Will Purchase before Halloween.” About a month after I made my not-so-earth-shattering prediction that at least 25 percent of American shoppers would start making Christmas purchases before Halloween, the National Retail Federation released a survey estimating that 40 percent of holiday shoppers started before Halloween.
  • “Online Retail Sales Will Grow 13.9 Percent.” Trend tracking firm comScore reported in January 2016 that total American digital commerce sales had risen 13 percent from 2014 to 2015, reaching about $69 billion, excluding travel and large corporate purchases. eMarketer reported a 13.4 percent increase.
  • “Email Marketing Is the Best Promotional Tool.” Technology firm Magnetic reported that 70 percent of holiday shoppers learned about holiday promotions from email. By comparison, some 64 percent of shoppers learned about promotions from online search, 56 percent learned about promotions from online ads, and 38 percent learned about promotions from social media.
  • “Mobile Commerce Will Reach 25 Percent of Total.” According to comScore, about 18 percent of ecommerce sales came from mobile devices.
Armando Roggio
Armando Roggio
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