There's been an influx of reports predicting that this year’s holiday sales will continue on an upward trajectory. PwC forecasts that 2016 holiday spending will reach its highest peak since the Great Recession, at about a 10 percent increase from 2015 holiday sales. The National Retail Federation (NRF) projects that holiday sales will see a 3.6 percent overall increase over last year, totaling $655.8 billion in sales. The NRF also predicts that the biggest increase will be in web sales, with a projected growth range of 7 percent to 10 percent.
With the massive potential for success during November and December, we wanted to look at exactly how much consumers were planning to spend online, as well as what kinds of experiences and offers would make them most likely to buy during the holidays. We conducted a survey of over 500 U.S. shoppers and found some very interesting stats that could make or break a retailer’s campaign. You can see the full study results in the infographic below.
While assessing the data, a few major trends stood out. Consumers indeed plan to use digital channels to do the bulk of their shopping, with the majority of respondents noting that they plan to spend over $250 on holiday shopping. Nearly two-thirds of shoppers plan to complete 50 percent to 100 percent of their holiday shopping online, noting that convenience and special online deals are a contributing factor to that choice.
To capture this leading majority, our data confirmed that retailers must focus on providing a great customer experience or risk failed conversions. Some respondents noted that a poor customer experience is what frustrates them most about shopping online, while 40 percent said they would abandon their carts as a result of a frustrating checkout experience. With that in mind, retailers should focus resources on ensuring their checkout is straightforward, simple and fast.
We also found that deals and discounts are essential to driving online purchases. According to our data, 63 percent of consumers find it important or very important that the products they buy are discounted, with specific offer preferences breaking down as follows:
- 40 percent: Free shipping
- 26 percent: Larger discount off one item
- 20 percent: Small discount off entire order
- 10 percent: Buy one, get one free
- 5 percent: Free gift with purchase.
Shipping is clearly a key factor in online shoppers’ purchasing decisions. Not only is free shipping clearly the most attractive offer to consumers, we also found that 56 percent of respondents will abandon their shopping cart mid-purchase if shipping is too expensive. This should be a clear indicator to retailers: Looking for ways to reduce the costs associated with shipping this holiday season will be more effective than developing any other type of promotion.
No matter how retailers choose to approach the holiday season, these statistics show that they should be looking to avoid churn by emphasizing the overall customer experience, streamlining the online buying process and assessing how they can provide a variety of offers — including free shipping — to attract new customers and help drive conversions at checkout.
Jake Weatherly is the CEO of SheerID, an eligibility verification services company.