4 Predictions for the 2014 Holiday Shopping Season

Mobile commerce, free shipping offers, in-store pickup promotions, and ecommerce videos will all be important trends for the 2014 Christmas shopping season, as small and mid-sized online retailers look forward to, perhaps, a 9-percent growth in sales.

Earlier this month, ecommerce platform provider Volusion projected the aforementioned 9-percent growth for small and mid-sized businesses. Total U.S. ecommerce sales are likely to grow about 15.5 percent, with large online retailers — it would seem — enjoying the lion’s share of the growth.

Total U.S. ecommerce sales are likely to grow about 15.5 percent, with large online retailers — it would seem — enjoying the lion’s share of the growth.

Some of the inequity may be because small and mid-sized business could be less able to participate in key holiday trends like the predictions described here. For example, relatively smaller merchants might not be as able as a large retailer to have a mobile optimized site, offer free shipping on most orders, offer in-store pickup options, or produce videos.

1. Mobile Commerce Will Account for 33 Percent of U.S. Online Holiday Sales

“We use the Internet in different ways now than we did four years ago,” wrote the authors of a July 2014 report from predictive analytics platform provider Custora. “Mobile internet is faster, hardware is better, and it’s common to use a phone or tablet frequently and in more settings.

“These shifts are reflected in ecommerce browsing: at the start of 2010, only 3.4 percent of total visits to ecommerce sites came from mobile devices (phones and tablets). Now, four years later, 36.9 percent of site visits are from tablets and phones.”

With the increase in mobile ecommerce traffic, there has also been an increase in mobile sales. That trend should continue during the 2014 holiday retail season. In fact, look for about one-third of all U.S. 2014 fourth-quarter sales to come from mobile devices.

2. Free Shipping Offers Will Be Ubiquitous

Shoppers love free shipping offers, so don’t be surprised if 70 percent of U.S. ecommerce shipments during the 2014 Christmas shopping period include free shipping. If correct, this prediction would represent a 3-percent increase over 2013, when about two-thirds of all U.S. holiday ecommerce shipments were sent at the merchant’s expense.

Earlier this year, a UPS and comScore survey found that 81 percent of online shoppers thought a free shipping offer was important. On average, about 50 percent of ecommerce orders include free shipping even when shoppers aren’t buying presents.

3. Brick-and-click Stores Will Encourage In-store Pickup

Retailers with physical locations as well as online shops, will do more to encourage in-store pickup, since there are at least three ways that having customers pick up orders benefits them.

  • In-store pickup costs less since retailers don’t have to pay the U.S. Postal Service, FedEx, or UPS to ship the order.

  • In-store pickup results in additional sales. The UPS and comScore survey mentioned above found that 43 percent of shoppers made an additional buy when the strolled into a store to pick up an online order.

  • In-store pickup is a significant competitive advantage over other retail locations and ecommerce sellers. Compared to physical stores without the options, ordering online is a time saver, and compared to even two-day shipping, in-store pickup gives customers access to products more quickly.

Look for some retailers to even offer a discount, free services (like gift wrapping), or cash back when shoppers choose in-store pickup for online orders.

4. Video Will Begin to Play a More Important Role

Video is, perhaps, the most powerful medium for communicating information online, and Internet users watch hours and hours of it each week.

Separately, there is good data that product videos increase ecommerce conversion rates and helps retailers sell more. During the 2014 Christmas shopping season, look for more retailers large and small to begin including product videos on product detail pages and to begin producing more video content generally.

How Did My Predictions Go for Last Year?

In 2013, I wrote a similar list of holiday predictions, with six assertions. Here is how those predictions panned out.

  • “U.S. Retail Ecommerce Sales Will Grow More than 15 Percent.” U.S. retail ecommerce sales actually grew about 16.9 percent or about $40 billion, according to eMarketer.

  • “16 Percent of U.S. Online Sales Will Come From Mobile Devices.” Mobile commerce accounted for some 29 percent of U.S. online sales, according to a Marketing Land report.

  • “Even More Retailers Will Offer Free Shipping.” About 67 percent of U.S. online orders included free shipping in the fourth quarter of 2013, up from about one-half of orders in the same 2012 period, according to comScore.

  • “Promotions Will Start Sooner.” This one proved difficult measure, but Amazon started some Christmas promotions as early as October 15, 2013.

  • “Unfortunately, Price Will Matter Even More.” This was another difficult-to-measure prediction, but in December, National Retail Federation Chief Executive Matthew Shay said that “Retailers will continue to aggressively promote their in-store and online offerings, looking to entice today’s very budget-conscious and value-focused shopper.” And in a January 2014 press release the NRF’s Chief Economist Jack Kleinhenz noted, “Undoubtedly, some of the increase [in 2013 holiday retail sales] came at the expense of margin. Retailers are still stressed and a long-term promotional environment may actually hurt the bottom line.”

  • “More Competition for Small Sellers.” This one will depend on whom you ask.

Armando Roggio
Armando Roggio
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