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.
Slower Than Usual Growth in 2019
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.
- We perform ongoing analysis of ecommerce and search engine marketing metrics for our customer base of mid-size and large businesses with over $500 million in online holiday revenue (defined as November 1 – December 25).
- We analyze over 300 million unique website visits (forecasted for the upcoming holidays) across key holiday retail categories: Gourmet Food, Apparel & Shoes, Home & Decor, Gifting, and Consumer Electronics.
- We’ve been aggregating this data since 2008, making this our 11th annual holiday forecast.
Year-to-Date Data Insights for 2019
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.
What Makes This Holiday Season Different?
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.
Amazon Stays on Top
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.
Factors Driving 2019 Ecommerce Revenue Growth
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.
- Mobile shopping will continue to surge: We estimate 45% of online purchases (and 72% of all searches) will happen on a mobile phone.
- Better integrated fulfillment: “Near me” searches are driven by mobile devices, along with more prevalent “buy online, pick up in-store” options.
- Growth of voice search: Less friction in the search-to-purchase process will lead to an increase in purchase frequency on voice devices. We estimate 35% of all mobile searches will be voice-activated. It’s important to prepare by creating a voice search SEO “playbook” for your business. (Need tips and insights? Download our most recent voice search report.)
- Heavy Discounting By Larger Retailers: Smaller merchants may face the brunt and margins will suffer, but overall sales will grow.
Resources for Holiday Season Success
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.
- Holiday Audit and Paid Search Calendar: Visit netelixir.com/holidayaudit to sign up for a free paid search audit from our team. Our experts will make sure your PPC campaigns are ready for the holiday rush. You can also use our Holiday Search Marketing Calendar to plan your budget around the most competitive days of the season.
- Holiday Workshop and Personalized Blueprint: Register on netelixir.com/holidayblueprint for a free 30-minute consultation with experts from NetElixir and Google. We’ll present you with a blueprint custom-tailored to bring holiday success to your business.
You can also watch our 2019 Holiday Season Retail Ecommerce Forecast webinar here:
May all your holidays be merry, bright, and profitable!