Since 2008, NetElixir has released an annual ecommerce forecast for the holiday season, predicting the industry trends that will shape the busiest shopping period of the year.
To produce our findings, we performed an ongoing analysis of ecommerce and search marketing metrics for our retail clients expected to generate over $600 million in online holiday revenue. These clients cover five main holiday verticals: Gourmet Food, Apparel & Shoes, Home Decor, Gifting, and Consumer Electronics.
This data, combined with industry signs from important periods like the back-to-school season, paints a picture that should have retailers feeling optimistic heading into the final months of 2018.
Stronger Than Usual Holiday Growth
We predict 15% year-over-year ecommerce revenue growth this holiday season. This would represent the strongest results of the past several years. For instance, last year saw a 13% increase, while 2016 brought a 10% bump.
Significant growth in revenue and orders is predicted across all major categories, with the largest gains expected for Apparel & Shoes (see below). However, retailers in some verticals may also see a slight decrease in average order value.
These bullish projections are fueled by strong ecommerce results in the first half of the year, with about a 17% increase in orders and 15.5% increase in revenue, compared to the same period in 2017. This year’s back-to-school season was also promising, with a 17% boost in orders and 14% increase in revenue YoY.
Key Factors Driving Growth
What other influences are contributing to such a merry holiday outlook? Look no further than advancing technologies and friendly economic factors:
- Mobile shopping continues to surge: We estimate that 42% of all online purchases will be made through mobile phones.
- Growth of voice search: As the purchase process becomes easier on voice devices, consumers will make purchases with them more often.
- Heavy discounting by larger online retailers: While smaller businesses may suffer, this development will grow overall online sales and continue the shift from brick-and-mortar stores to online shopping.
- Strong macroeconomic factors: A thriving economy – including 3% GDP growth expected for the year, low unemployment, and an increase in wage rate – is pushing consumer sentiment back to early-2000s levels.
While these projections are exciting, NetElixir founder and CEO, Udayan Bose, notes that retailers still need to adjust to keep pace:
“Our models are forecasting a very optimistic holiday season for retailers. We are also seeing new buying trends being spurred by the adoption of new technologies. Mobile purchasing and shopping initiated by voice search are two factors that are changing consumer behavior. So while retailers can expect overall ecommerce growth, to reap the benefits they should be adapting their ecommerce channels to coincide with these changing consumer behaviors.”
Amazon Will (Again) Dominate
In what should come as no surprise, Amazon will be the big winner this holiday season. We predict the online retail giant’s share of holiday sales will grow to a whopping 40% this year, up from 35% in 2017.
That translates to a holiday haul of $38.8 billion, a $9.4 billion increase over last year. As comparison, all the other online retailers and marketplaces are estimated to bring in a combined $3.6 billion of additional ecommerce sales over 2017.
More Trends to Watch
- Searches related to holiday gifting will pick up after October 20, so retailers should prepare early.
- There are 33 days between Thanksgiving and Christmas this year, which will drive incremental sales volume.
- We expect three peak online shopping periods: Thanksgiving to Cyber Monday (11/22-11/26); Green Monday period (12/9-12/12); and a mobile shopping spike during the week before Christmas (12/18-12/21).
Put Your Holiday Planning into High Gear
Now that you know what to expect, how can your business benefit from this year’s anticipated holiday season growth? Take advantage of our 2018 holiday readiness resources. These include a paid search planning calendar, workbook packed with 20 proven holiday success strategies, and complimentary online clinics with our certified search experts.
Don’t wait – starting now is your key to a prosperous holiday season!