The holiday season seems to approach more rapidly every year, especially in the world of retail. Preparing early is essential for retailers who want to outperform last year’s results… and their competition. When putting together a strong holiday marketing strategy, it’s important to work with the best data and information available. That’s why NetElixir has released an annual holiday ecommerce forecast since 2008 to give retailers an inside edge on winning more customers during the holidays.
Thanks to the quality of our data and forecasting model, our projections have routinely proved more accurate than those from other industry sources. Our team prides itself on being the go-to source of holiday insights for online retailers, and we’re excited to share this year’s report.
Retailers anticipating explosive growth this holiday may want to temper their expectations. NetElixir predicts slower than usual 9% year-over-year growth in ecommerce sales this holiday season.
This falls noticeably below the ecommerce growth reported by the National Retail Federation over the past several years. For instance, last year saw 11.5% growth and 2017 boasted a 13% increase.
Before taking a deeper dive into our holiday forecast, here’s a brief overview of our process to give you a better idea of how we arrive at our projections.
Ecommerce performance data from January through August of this year can tell us a lot about what to expect for the upcoming holidays. Consider it our holiday crystal ball, if you will.
These key indicators point to the slow growth we’ve predicted for this holiday season. Overall, YoY growth has shown signs of sluggishness in the third quarter, with revenue and orders down significantly from a year ago. (See chart below.)
The back-to-school season is traditionally a useful barometer for predicting the holidays, and this year the results have also been below expectations. Revenue, orders, and average order value (AOV) grew 9%, 7%, and 3%, respectively. In 2018, revenue grew 17% and orders rose 14%, while AOV slipped 4% YoY.
With Thanksgiving falling on November 28 this year, consumers have six fewer shopping days between Turkey Day and Christmas than they did in 2018. That means the holiday sprint should be even more frantic and competitive over that crucial span.
Knowing what to expect can make this period a bit more navigable for retailers, so let’s take a look at some of the key trends that will shape the 2019 holiday season.
You saw this one coming, right? Despite a relatively slow holiday in terms of overall growth, Amazon is poised to grab an even larger slice of the ecommerce pie. We predict Amazon’s share of total online holiday sales will cross 44% this year.
The ecommerce behemoth continues to dominate product searches. In fact, we estimate over 65% of all product searches now occur on Amazon. The Amazon Marketplace is playing a bigger role for retailers, as well. On average, over 15% of a retailer’s online sales come from Amazon, up from an average of 12% in Q4 2018.
Of course, Amazon’s ever-increasing Prime membership doesn’t hurt their growth prospects, either. There are now over 125 million Prime members helping Amazon capture an expanding share of online sales.
While holiday ecommerce growth may be more muted than in recent years, we see the following factors playing key parts in fueling that 9% YoY revenue increase.
Now that you know what the 2019 holiday season has in store, what can you do to make sure this is your most successful holiday yet? NetElixir is excited to offer some valuable resources to retailers to help them develop the perfect holiday strategy.
You can also watch our 2019 Holiday Season Retail Ecommerce Forecast webinar here:
May all your holidays be merry, bright, and profitable!