Happy holiday season! It’s been an unpredictable and interesting season so far, to say the least. In this overview of November 2021, we’ll dive into how our sales forecasts compared with the actual numbers within our datasets. Forecasts are necessary to plan and strategize, but it is important to reflect on results and allow the data to better inform our next forecast. At NetElixir, we believe in upholding accountability for our forecasts and relying on the latest real-time data and insights, as we continually learn how customers actually searched and shopped.
Summary of November 2021
How did our November forecast compare with our results?
For our initial holiday forecast released in September, we conservatively projected a 6-7% YoY for all holiday sales. In mid-November, as sales started to spike upwards of 40% YoY within the first week, conversion rates increased 13% YoY, and latency dropped by 2%, we grew more optimistic; as such, we upped our overall holiday forecast to 12-13%.
A slower-than-anticipated Cyber 5 resulted in a decrease of 7% YoY for e-commerce sales. This loss dropped the total November sales growth within our dataset to just over 2.6%. Overall, it was a lackluster weekend. Nearly all channels dropped in YoY revenue, including email marketing, which is typically a highly reliable means to engage with existing customers.
While our holiday calendar day-by-day predictions fell short of actual results, our forecast had anticipated better deals. When faced with subpar discounts, many customers opted not to purchase. We also did not expect consumers to get such an early start to their shopping; sales in early November were much higher than expected. We had assumed that, similiar to last year, Cyber 5 deals would release pent-up demand to shop and continue the e-commerce surge.
As we predicted, there were strong sales leading up to Black Friday. Black Friday has transformed from one-day doorbuster extravaganzas to week-long online deals on specific products and categories. As such, the promotions offered on the day of Black Friday itself may have ultimately underwhelmed shoppers who were expecting deeper discounts. While strong teaser promotions helped boost sales for an early holiday shopping season, they lessened the impact of Cyber 5.
However, according to a survey done by McKinsey, 45% of their respondents started their holiday shopping in October, with 31% of those early shoppers completing more than 75% of their gifting. The survey found that only 11% of respondents plan to start their shopping in December, compared to pre-pandemic numbers of over 25%. We estimate that 30% of consumers had already completed their holiday shopping before Thanksgiving Day, thus negating the need to shop during Cyber 5.
All told, we will most likely still see strong holiday sales, but over a longer, more drawn-out time period. One day of sales will not tell the whole story of how, when, and why your customers are searching and shopping online.
Cyber 5 Results
Within our dataset, powered by LXRInsights, Cyber Monday sales were comparable to Black Friday sales. This is the first time that Cyber Monday sales have not exceeded Black Friday’s in over a decade!
We thought the strong growth at the end of October and early November would continue throughout Cyber 5. However, weaker Black Friday and Cyber Monday promotions may have discouraged shoppers. Unattractive sales coupled with an earlier start to the holiday season led to a disappointing and unexpectedly low Cyber 5 weekend.
Evidently, Thanksgiving Day had the highest AOV (average order value) out of all Cyber 5 days — something we haven’t seen since we started our Cyber 5 results report over a decade ago.
“Cyber Monday is a tradition, so I bought something just to buy something,” laughs our Founder and CEO, Udayan Bose. Many people, Bose included, were disappointed by the Cyber Monday sales. They may have still made a purchase, out of a sense of tradition, but not nearly as large as in prior years.
A lackluster Cyber 5 was felt nationwide through the United States, as all regions had fairly even rates of decline. SMBs were hit the hardest within our dataset, experiencing a loss of 17% YoY, compared to a loss of just 1% for enterprise businesses. With rising CPCs, it is easier for enterprise businesses with great ad budgets to gain market share.
However, an agile media strategy can help you stay competitive. Keeping your content fresh and having a Plan A, Plan B, and even Plan C to account for different scenarios is important to remain nimble and competitive. A full-funnel, omnichannel marketing strategy that places equal emphasis on brand awareness and demand generation will help you stay top of mind and relevant to consumers. Within our dataset, industries whose paid media strategy we managed performed better than overall online sales, as noted by the table below:
The role of mobile continually increases. Mobile sales accounted for 62% of sitewide orders, but AOV was 46% less than desktop. Mobile is good for quick sales and searches, but consumers prefer to use their desktops for larger purchases. We expect mobile shopping to account for at least 75% of all holiday purchases by 2025.
In prior years, consumers used to heavily shop between 6 PM to midnight (local time). Slowly, consumers have started to shop earlier in the day. This year, 33.5% of consumers made a purchase between noon and 6 PM (local time) and 32% between 6 AM and noon (local time). WFH may have contributed to this early shopping activity and could have a lasting impact of when customers shop online.
Extending Cyber 5
As brands become more value-led, Giving Tuesday may play a critical role in Cyber 5 online activity. We could even see an eventual Cyber 6. Already, plenty of brands are extending their Cyber Monday offerings throughout the week in an effort to recapture some of the lackluster customer demand.
Search Engine Land, summarizing Adobe’s research, furthers that we could see November turn into Cyber Month. Over 21 days in November had revenue gains of over $3B, compared to only 8 days in November 2020, according to the article. The drive to shop early and prolonged sales could change the landscape of holiday shopping and lessen Cyber 5’s role.
December 2021 Forecast
We are optimistic that last-minute shopping and more generous promotions by retailers will lead to a 5% YoY increase in online sales this holiday season. As retailers seek to make up for the Cyber 5 revenue dip, we suggest offering better deals to encourage last-minute shoppers. Ease of mobile shopping and BOPIS orders will drive last-minute buys throughout December.
We expect marketplaces to account for 55% of all holiday purchases this season, so be sure to carefully leverage Amazon and other marketplaces in your holistic strategy. Amazon can be a great gateway to introducing customers to your products and brand. Creating a seamless brand experience on marketplaces can go a long way to converting loyal customers to your store.
If 30% of consumers have already completed their holiday shopping, then there is still 70% that has yet to do so. We believe there is a lot of pent-up demand that will be released in December as consumers finish checking off their gift list.
I firmly believe that retailers still have time to tweak their game plan and be successful,” Udayan Bose, Founder and CEO, summarizes.
A Successful Holiday and Post-Holiday Strategy
Being successful means creating backup plans to seize any opportunity. Innovation and agility are key strategic initiatives to attracting and retaining customers throughout the holiday season and beyond.
It is important to remember that Gen Z has a lot of buying power, which will only continue to grow in the coming years. Gen Z likes to research before buying and consider the social influence of both products and brands. They are the savviest and most informed shoppers compared to other generations. If a store’s options are not exceptional nor sales attractive, then Gen Z won’t buy. As a digital native shopper, Gen Z will also use mobile and social shopping more, so brands have to be ready to meet new customers wherever they are.
As consumer behavior continues to evolve rapidly and unexpectedly, brands should carefully monitor any shifts in how their customers search and shop online. Gain deeper insights into your customers’ purchase journey to minimize any possible friction and understand how their behavior continually evolves.
Be sure to check out our blog page for our weekly holiday breakdown for the remainder of the year.