The 2020 online holiday shopping season is almost over. After a whirlwind of a year and a holiday season with an unpredictable Cyber 5 weekend, the December e-commerce sales are slowly ticking back up. Like just about everything this year, the online sales trends were difficult to predict and almost every organization got their forecasts wrong. Majority of the retailers, marketers, and analysts making predictions did not factor in the volume of people buying before and after Cyber 5.
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.
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 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.
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.
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://www.netelixir.com/2021playbook/.
“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.
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?
“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.
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.
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