Lessons from the 2022 Holiday Shopping Season

Lessons from the 2022 Holiday Shopping Season

by Kurt Anagnostopoulos Retail

How was your holiday sales season? For many retailers, the holiday shopping season felt as close to a return to normal as could be hoped for. This does not mean everyone had a great retail season; but some of the disruptive forces from 2020 and 2021 abated, such as supply chain woes and the impact of Covid-19 on in-store shopping. Instead, retailers managed against some of the variable conditions that affect shopping every season, including the state the economy and weather conditions. Here are some major takeaways from the 2022 holiday season:

  • Economic uncertainty has influenced spend – but by how much? U.S. retail sales grew 7.6 percent during the holiday shopping season, according to a Mastercard report. This was higher than the 7.1 percent growth that Mastercard had predicted in September but lower than the 8.5 percent growth achieved in 2021. Online sales grew 10.6 percent, slightly less than the 11 percent increase last year. Mastercard attributed the lower rates to consumers’ experiencing economic uncertainty. But given just how much uncertainty is in the air right now – including an ongoing war in Ukraine and a looming recession – the slowdown was really nowhere as bad as it could have been.
  • Retailers that offered price deals did especially well. Remember in 2021 when retailers were reluctant to offer discounts and deals because the supply chain crisis had hurt their inventory levels? That’s an example of an unusual problem that abated in 2022. Inventory levels returned to normal in 2022, and retailers even experienced excess inventory – which happens just about every year. So, they offered more discounts. According to Salesforce, the average U.S. discount rate stands at 19 percent, with the global discount rate at 18 percent an increase of 6 percent globally and in the U.S. year over year. Discounts increased two weeks after Cyber Week, rising 11 percent globally year over year and 14 percent in the U.S. as retailers tried to entice last-minute shoppers ahead of the shipping cutoff window.
  • Fall sales might have caused a returns problem. In 2022, retailers such as Amazon, Target, and Walmart continued to offer holiday sales in the early fall, continuing a pattern from recent years. Cyber Week was pre-empted by sales such as Amazon’s Prime Days II and Walmart’s Deals for Days. But then returns nearly doubled the week after Cyber Week compared to the previous year and have remained high since then. Salesforce says that the surge in returns could be attributable to people purchasing gifts earlier in the season and then returning them to buy something else on discount. This data underscores how much work retailers still need to do in order to synchronizes pre-Cyber Week sales with consumers’ buying habits and sentiment.
  • Social continues to fuel online shopping traffic. After hitting all-time highs during Cyber Week, social traffic referring to retailers’ sites grew 23 percent year over during the holiday shopping season, representing 12 percent of all mobile traffic, according to Salesforce. The U.S. is leading this trend, with social traffic growing 28 percent over the first three weeks of December.

Takeaways

  • Online advertising is as important as ever. Consumers surprised analysts by spending more than predicted even during a recession. Businesses that kept their brand names and merchandise visible were best positioned to win. Retailers that scaled back their online ad spending because they feared consumers were going to spend less ended up missing out.
  • Social media advertising in particular is essential. Industry watchers have been speculating that social commerce – or the actual purchase of a product on a social app – might be ebbing a bit. But commerce resulting from advertising on social apps appears to be alive and well.
  • Retailers need to focus on value, not deals. Consumers will continue to respond to deals amid uncertainty – but retailers need to be careful. Discounted products and lower-priced alternatives to name-brand products attracted consumers. But as noted, overselling deals throughout the holiday season may have backfired on retailers when consumers returned products in their quest to find better deals than they were offered.
  • Retailers need to be nimbler with their ad campaigns. As we saw, consumers continued to demonstrate an uncanny knack for surprising retailers, in this case buying more than expected and apparently being aggressive about trading up with holiday deals. We suggest capitalizing on tools such as Google’s demand forecasts on the Insights page. This predicts upcoming trends relevant to your business so that you can adjust your budget and bidding strategy to capture spikes in demand. Additionally, use Performance Planner to understand how these changes to your advertising spend will affect your predicted clicks, conversions, and conversion values. In addition, Product-specific insights are now at your disposal at the account level in the Google Ads products tab. These insights let you spot underperforming offers, identify products with missing feed attributes and compare your bidding strategy with your top competitors’.

Contact True Interactive

True Interactive has deep experience helping clients plan and implement shopping campaigns online during all seasons. We can help you, too. We understand how to create nimble search campaigns and multi-channel ad outreach to target consumers with the right message at the right time. Contact us to learn more.

Lead photo by Kayle Kaupanger on Unsplash

Three Takeaways from Cyber Monday 2022

Three Takeaways from Cyber Monday 2022

by Kurt Anagnostopoulos Retail

The numbers are in: Cyber Monday was a success. And not because inflation made purchasing volume seem bigger than what it was. No, demand fueled a big day for anyone selling online.

According to Adobe Analytics, Cyber Monday generated $11.3 billion in sales online. This is 5.8 percent more than consumers spent on the same day last year and a reversal of fortune. Consider that in 2021, Cyber Monday generated $10.7 billion, which was actually a drop from 2020. Meanwhile, Salesforce said Cyber Monday online sales hit $12.2 billion in the United States, representing an 8.3 percent increase over 2021.

Cyber Monday SalesAll told, about 196.7 million shoppers made purchases during the five-day holiday period from Thanksgiving Day through Cyber Monday known as Cyber Week, the National Retail Federation said on Tuesday.

Adobe said that the Cyber Monday figures were based on more transactions overall – not spend boosted by inflation. At the peak, people were spending $12.8 million per minute on Monday.

According to Adobe, top sellers included games, gaming consoles, Legos, Hatchimals, Disney Encanto, Pokémon cards, Bluey, Dyson products, strollers, Apple Watches, drones, and digital cameras. Toys as a category saw a 452 percent boost in sales versus a day in October.

Wait a minute. Wasn’t this the year when inflation-wary shoppers were going to rein in their holiday spending? Wasn’t this the year when Amazon’s Prime Day I and II, Walmart’s Deals for Days, and Target’s virtual Black Friday sales throughout November were going to cannibalize Cyber Monday sales?

Not so fast. As it turns out, consumers were spending during the holiday promotions before Cyber Week but also holding out for deals – as they always do. And they did something else: they did their homework. Consumers knew that retailers were carrying excess inventory after two years of experiencing inventory shortages. They knew the deep discounts were going to happen. And so, they waited. As Tech Crunch reported, “Deep discounts — retailers perhaps anticipating needing to have something more to lure shoppers — have played a big role, too, as have the sheer availability of goods after shortages of the years before.”

Vivek Pandya, lead analyst, Adobe Digital Insights, said, “With oversupply and a softening consumer spending environment, retailers made the right call this season to drive demand through heavy discounting. It spurred online spending to levels that were higher than expected, and reinforced e-commerce as a major channel to drive volume and capture consumer interest.”

In addition, mobile influenced Cyber Monday shopping, accounting for 43 percent of all online sales. But it should be noted that the 43 percent share was much lower than Thanksgiving Day, when mobile accounted for 55 percent of purchases. That’s because people are back to work in Cyber Monday and using their desktops more.

So, what can retailers learn from the results?

  • The retailers that stayed committed to their online ad spend won. By keeping their brand names and merchandise visible, they were best positioned to capture the Cyber Monday traffic. Retailers that scaled back their online ad spending because they feared consumers were going to spend less ended up missing out.
  • As always, a strong blend of desktop-based and mobile ad spend was key to winning Cyber Monday traffic. True, the mobile traffic fell from Thanksgiving Day, but 43 percent is still a sizable number, and a well-balanced ad strategy was the way to go.
  • Winning Cyber Monday requires a strategy for winning Cyber Week. Demand was uniformly strong for the entire period of Thanksgiving to Cyber Monday. Advertisers that managed their budgets with an eye toward driving traffic and sales for the entire Cyber Week captured a “Cyber Monday bonus.”

Bottom line: if you kept your holiday advertising strong and ignored the naysayers, you won Cyber Monday.

Contact True Interactive

True Interactive has deep experience helping clients plan and implement holiday shopping campaigns online. We can help you, too. We understand how to create nimble search campaigns and multi-channel ad outreach to target consumers with the right message at the right time. Contact us to learn more.

Lead image source:
https://pixabay.com/vectors/cyber-monday-neon-sale-ecommerce-5240883/

How Retailers Can Succeed on Amazon during the Holiday Season

How Retailers Can Succeed on Amazon during the Holiday Season

by Morgan Reilly Advertising

By Tim Colucci and Morgan Reilly

It’s a challenging time to be a merchant selling products on Amazon. In October, Amazon’s vaunted Prime Day II sale underperformed according to analysts’ analysis. And then Amazon forecast its Q4 retail sales to be $140 billion to $148 billion in the fourth quarter, far short of analysts’ average estimate of $156 billion. Meanwhile, Adobe Inc. forecast that US e-commerce sales in November and December will rise just 2.5% from the prior year.

All of this is because consumers are more price conscious amid inflation and fears of a pending recession, so they will likely spend less.

Independent sellers on Amazon’s website, who account for a majority of unit sales, are bracing for a challenging holiday season in the run-up to Cyber Week. Many of them advertise their products on Amazon via Amazon Ads. How should they adapt their approach if at all?

Here are some tips:

1 Don’t Let Prime Day Results Spook You

Klover, a company that analyzes real-time commerce and financial data, found that households spent around 40 percent less during the October event compared with the July Prime Day. But merchants were constrained by Amazon’s ground rules for selling on Prime Day II, which prohibited vendors from featuring top discounts on both October Prime Day and Cyber Week. So, many merchants likely were hesitant to feature their top discounts/promotions because they needed to save them for Cyber Week. Also, many retailers might not have been prepared to have inventory ready for two Prime Days (July and October) and Cyber Week — and in those cases, they are likely holding out for Cyber Week.

2 Focus on Value, Not Price

As a partner to advertisers this holiday season, our own experience indicates that the lowest cost item isn’t necessarily the most popular. So far we’re seeing traditionally popular sellers are doing well. Consumers are willing to pay for what they really want. They’re willing to trade down for a lower-cost alternative, but that doesn’t mean they’re going for the cheapest items on the menu. Beware inventory dumping, which burned many businesses on Prime Day. During the inflationary times we’re living in, price-conscious shoppers are less likely to buy something extra just because it’s on sale.

3 Consider Sponsored Brands and Sponsored Display in Addition to Sponsored Products

For many merchants, Amazon’s Sponsored Products ad unit is the bread-and-butter of their ad spend. Sponsored products are used to promote a single product and take the consumer directly to the product page. Additional creative such as images and text are not needed, making sponsored products the simplest ad to set up. Merchants use keyword targeting to match products to a consumer’s search and show ads on the search results page or product detail page. 

Amazon Sponsored Products

Sponsored Brands allow for multiple products or titles to be promoted together using a custom headline and logo. Consumers are taken to a product page if they click on a product, or to a designated landing page if they click on the image or ad text. Sponsored Brands are good for driving awareness, in addition to sales. For example, advertisers can pair new or seasonal items with a related top seller in an ad to increase visibility in other product offerings. Or if a seller has multiple versions of the same product, using Sponsored Brand ads showcases the variety available within a single ad.

Amazon Sponsored Brands

Sponsored Display, on the other hand, makes it possible to engage with shoppers on and off Amazon with self-service display ads. Advertisers can engage audiences browsing specific detail pages, on the Amazon home page, on Twitch (owned by Amazon), and across third-party apps and websites. Amazon says that on average companies that use Sponsored Display see up to 82 percent of their sales driven by new-to-brand customers.

 

So, why do Sponsored Brands and Sponsored Display matter? Because the 2022 holiday season is more competitive. As Amazon noted in its earnings forecast, shoppers are spending less. They’re choosier. So, advertisers have to work harder at the awareness and consideration phases, which is where Sponsored Brands (for consideration) and Sponsored Display (for awareness) can be especially useful by showcasing more of a product’s features on and off Amazon.

4 Know Your Cyber Week Strategy

Today merchants everywhere (whether on Amazon or not) need to manage their holiday advertising spend against an increasingly complex set of choices: Black Friday, Cyber Monday, and now Cyber Week (Thanksgiving Day, Black Friday, Small Business Saturday, Super Sunday, and Cyber Monday).

You do want to fund your advertising for all of Cyber Week, but some days are more appealing than others depending on what you sell. Cyber Monday remains huge, especially the peak shopping evening hours. Cyber Monday will likely loom very large in 2022 as shoppers hold out for the best possible deal.

Each day a retailer gets closer to Christmas, sales will inevitably taper off, off, but retailers should keep placeholder budget in place up until the last day free shipping is possible.

Contact True Interactive

True Interactive has deep experience helping clients plan and implement holiday shopping campaigns online, and this includes the use of Amazon Ads. We can help you, too. We understand how to create nimble search campaigns and multi-channel ad outreach to target consumers with the right message at the right time. Contact us to learn more.

Why Black Friday Is Alive and Well

Why Black Friday Is Alive and Well

by Kurt Anagnostopoulos Advertising

Over the past few years, there’s been considerable speculation that Black Friday is mattering less. That’s because major retailers such as Amazon and Walmart moved up Black Friday-style sales throughout the fall. Pre-empting Black Friday was especially apparent in 2020, when retailers needed to be resourceful with the COVID-19 pandemic discouraging in-store shopping. But in 2022, the hallowed shopping day is showing signs of life although it’s no longer an exclusively offline event. To wit:

  • Amazon’s Fall Prime Day Sale, while popular, did not rake in the cash that it was expected to generate. According to consumer data firm Numerator, the average order size during the Prime Early Access sale in October was $46.68, down nearly 23 percent from Prime Day in July. Numerator said the most popular categories sold were in order, household essentials, health and beauty, apparel and shoes, toys and video games, and electronics. Interestingly, only 29 percent of Fall Prime Day shoppers said they used the sale to buy holiday gifts, and 95 percent said they’re likely to shop Amazon for more gifts as the season continues. This suggests that shoppers are holding out for more shopping down the road, which bodes well for Black Friday.
  • According to the National Retail Federation, holiday shoppers will spend at a healthy pace albeit at a slower one than previous years. The NRF says that holiday retail sales during November and December will grow between 6 percent and 8 percent over 2021 to between $942.6 billion and $960.4 billion. Last year’s holiday sales grew 13.5 percent over 2020 and totaled $889.3 billion – but of course in 2022, shoppers are up against chronic inflation and economic uncertainty. The NRF expects that online and other non-store sales, which are included in the total, to increase between 10 percent and 12 percent to between $262.8 billion and $267.6 billion. This figure is up from $238.9 billion last year, which saw incredible growth in digital channels as consumers turned to online shopping to meet their holiday needs during the pandemic.
  • One in five consumers planning to shop for the holidays say they’ll spend less because their economic situation has changed, according to an NPD survey. More than a third of U.S. consumers can’t afford gifts this year due to inflation and higher costs of living, and nearly half plan to spend less this season, according to research from Credit Karma. But that may mean that they’re waiting to shop, as 40 percent told Credit Karma that they are waiting for annual sales, including Black Friday.
  • On the other hand, retailers such as Target and Walmart are pumping up Black Friday, but they’re once again extending the day throughout November. Walmart is running three Black Friday style deals throughout November, including Cyber Monday. This of course suggests that retailers are hedging their bets as Amazon has done with its October Prime Day sale. Based on Amazon’s experience, retailers should expect more hold-outs for Black Friday weekend November 25-28 (counting Cyber Monday). One reason: retailer are carrying a lot of inventory in 2022. Consumers are in a stronger position. They know it. And they’ll expect more deals as 2022 comes to a close during the biggest shopping day of the year.

Advice for Brands

  • Accept the reality that deals will drive sales more than ever. Discounted products and lower-priced alternatives to name-brand products are going to win the day, as reported in The Wall Street Journal. House brands are going to have a strong year.
  • Complement your online advertising approach with strong organic content that amplifies your holiday deals. Google just released a number of features to do that. For instance, Google added new ways to find deals across the web using Google Search through new coupons and promotions, side-by-side deal views, and a new price insights navigator. Clearly, Google wants more retailers to manage their product listings on Google!

Contact True Interactive

True Interactive has deep experience helping clients plan and implement holiday shopping campaigns online. We can help you, too. We understand how to create nimble search campaigns and multi-channel ad outreach to target consumers with the right message at the right time. Contact us to learn more.

Image source: https://unsplash.com/photos/pwxESDWRwDE

Tips for Winning the 2022 Holiday Shopping Season

Tips for Winning the 2022 Holiday Shopping Season

by Kurt Anagnostopoulos Retail

How is the 2022 holiday shopping season shaping up? We’re already getting some important clues. Here’s what we are learning:

1 It’s Already Here

According to Google, nearly one out of five consumers had started their holiday shopping, and more than a third (36 percent) already had ideas for gifts they were going to buy – back in May!

Retailers are ready for them. In August, Walmart unveiled its annual top toy list, nearly a month earlier than in 2021. And when Walmart acts, others follow. Retailers should expect Best Buy, Target, and Amazon to dial up the heat on Walmart by promoting their holiday deals sooner.

2 Consumers Are Cost Conscious

Amid high inflation, retailers expect consumers to be choosier and cost conscious. Walmart’s top toy included a new budget-friendly category — toys under $25. According to Walmart, Walmart the list includes “more Rollbacks on toys” to give consumers “deeper savings” on top of “everyday low prices.”

And Walmart is not alone. As reported in CNN, executives at stores such as Best Buy, Gap, and Ulta expect the holiday season to be loaded with discounts amid economic uncertainty:

In addition to toys, shoppers will likely find discounts on clothing, televisions, beauty products, sporting goods and other items.

Some chains have stockpiled too much inventory in recent months and will increase promotions to try to sell the glut of goods during the holiday stretch.

Other companies are also ramping up promotions to give incentives to inflation-strained shoppers who might otherwise be priced out of holiday gifts.

Best Buy CEO Corie Barry told CNN, “We’re seeing a customer who’s more value-oriented, who is definitely moving more towards some of those sale events. You’re going to see a holiday that starts to look a little bit more like what we saw pre-pandemic.”

What It All Means

  • A bigger Black Friday? Black Friday 2021 proved to be a return to pre-pandemic form, with sales increasing nearly 30 percent over 2020. Traditionally, consumers have been conditioned to expect doorbuster sales on this most hallowed of shopping days, but in recent years, retailers have reimagined the concept of Black Friday to feature Black Friday sales that happen long before the actual day. But in 2022, retailers will be eager to shed excess inventory to budget-conscious consumers, positioning Black Friday to reclaim its stature.
  • Retailers need to be nimbler with their ad campaigns. It’s not just that retailers need to plan earlier. They need to adapt to shifts in consumer behavior. Why? Because choosy consumers are going to be less brand loyal and more careful about looking for deals online, which could cause rapid shifts in demand at the store and product level – in your favor and sometimes in a competitor’s favor. We suggest capitalizing on tools such as Google’s demand forecasts on the Insights page. This predicts upcoming trends relevant to your business so that you can adjust your budget and bidding strategy to capture spikes in demand. Additionally, use Performance Planner to understand how these changes to your advertising spend will affect your predicted clicks, conversions and conversion values. In addition, Product-specific insights are now at your disposal at the account level in the Google Ads products tab. These insights let you spot underperforming offers, identify products with missing feed attributes and compare your bidding strategy with your top competitors’.

Contact True Interactive

True Interactive has deep experience helping clients plan and implement holiday shopping campaigns online. We can help you, too. We understand how to create nimble search campaigns and multi-channel ad outreach to target consumers with the right message at the right time. Contact us to learn more.

Image source: https://unsplash.com/photos/_3Q3tsJ01nc

The 2021 Holiday Shopping Season: Four Lessons Learned

The 2021 Holiday Shopping Season: Four Lessons Learned

by Kurt Anagnostopoulos Retail

The 2021 holiday shopping season was a qualified success – all things considered.

Consumers entered the season amid uncertainty. Would Covid-19 spike again? And yes, it did – later in the season. How bad would the supply chain crisis get? It was a problem – holiday inventory shrank 2 percent because of shortages – but it was not a big problem for the big-box retailers who possessed the resources to plan ahead. Would inflation hurt spending? Yes, rising inflation played a role, especially in December.

The good news is that overall, U.S. holiday sales overall rose 8.5 percent according to Mastercard SpendingPulse. Online spending in the United States rose 8.9 percent in the United States, according to Salesforce. The bad news is that in both cases, the growth rates were lower than expected. MasterCard had predicted an 8.8 percent increase. Salesforce had predicted a 10 percent increase. But keep in mind that no one was predicting inflation to spike, and inflation definitely hurt sales as December wore on.

What do spending patterns in 2021 say about how advertisers might approach 2022 seasonal campaigns?

  1. Getting a head start is more important ever. Everyone should brace themselves for the launch of seasonal campaigns even earlier. That means Memorial Day campaigns starting sooner. Fourth of July, Back to School, Christmas 2022 – all sooner. That’s because the supply chain crisis is casting a permanent shadow over retail for the year and possibly beyond. During the 2021 holiday shopping season, retailers were launching holiday promotions in September to get out in front of the possibility of shortages hurting inventory availability. By Thanksgiving, 30 percent of consumers had made their holiday purchases, according to Salesforce. Even though the supply chain crisis proved to be less disruptive than many had feared, few retailers lack the scale and resources that the big box retailers possess to offset the effects of inventory shortages. In addition, retailers learned a lesson about the value of getting an earlier start, and now they are all feeling the pressure to get a jump on the seasonal sales before a competitor does. With uncertainty continuing, retailers will to advertise sooner.
  1. Big-tent events may have less impact. A byproduct of launching campaigns earlier is that they can dilute the actual impact of an event-oriented sale (Memorial Day, July 4, Labor Day, etc.) In 2021, Black Friday and Cyber Monday sales were subdued. But muted sales were only a problem for businesses that defined Black Friday or Cyber Monday as a single-day event. In fact, for the past few years, big retailers have been redefining Black Friday in particular as a series of events throughout the month of November. As a result, they may have expereinced strong “Black Friday sales” over a period of days, while sales from the actual Black Friday may not have been as strong. This is all OK. It just means that retailers need to adapt to changing shopping patterns and more creatively combine day-of sales with smaller flash sales that occur near the day-of sale.
  1. Adaptability is essential. Advertisers should be ready for the unexpected. For example, typically as December 25 approaches, we see a slowdown in online retail sales as consumers avoid taking the risk of buying a gift and missing the cutoff day for having a gift arrive by Christmas Day. But according to Salesforce, “Retailers nabbed 23% of their holiday sales during the final two weeks of the year, up 11% from the previous year, even though the shipping cutoff date had long passed by then.” Why? Likely because the surge in Covid-19 with the Omicron variant made shoppers more cautious about buying in-store. Interestingly, Salesforce reported a surge in buy online, pick up in store shopping during this period, which suggests that however they shopped, people just wanted to stay away from browsing in a store. Flexibility also means being adapting to different shopping formats online. Salesforce said that over the 2021 holiday season, 4 percent of global digital sales on a mobile device were made through a social media app; and 10 percent of mobile traffic originated from consumers browsing through social networks. Social commerce will be an increasingly part of the advertising and marketing mix in 2022 especially for any business whose customer base is composed of Gen Zers and Millennials.
  1. Promoting flexible financing options is important. With inflation worsening, consumers are looking for ways to ease the strain on their budgets, but they may be leery of racking up big credit card bills. These are reasons why, according to Salesforce, “Buy Now, Pay Later (BNPL) services in the U.S. during the holiday season increased 40% compared to 2020. Consumers turned to these offerings throughout the holiday season to offset the higher price tags. Alternative payment forms, including PayPal, Apple Pay, and Google Pay, also increased by 15% YoY in the U.S.” In fact, the rise of BNPL is one of the hottest topics in retail now. Retailers should make BNPL an important part of their advertising strategies for 2022.

In 2022, advertising will be an adventurous industry with so many fascinating formats arising and trends coalescing around changing consumer behavior. One thing is clear: wise businesses are going to advertise, both during lean times, prosperous times, and uncertain times. We’ve learned time and again that scaling back because of uncertainty is always a bad strategy, as we have discussed on our blog here and here. Get ready for an exciting ride!

Contact True Interactive

At True Interactive, we’ve helped a number of businesses develop and execute seasonal holiday campaigns. Contact us to learn how we can help you.

Image source: https://pixabay.com/photos/background-bauble-celebration-21658/

Consumer Shopping Trends for the 2021 Holiday Season

Consumer Shopping Trends for the 2021 Holiday Season

by Clare O'Shea Amazon Google Social media

What does the holiday shopping season hold for businesses? We have already heard plenty about the potential problems that a global supply chain crisis will pose. They include product shipping delays, bare shelves, and higher prices. But how are consumers planning to research and buy as the shopping season kicks into full gear? A recently conducted webinar by ChannelAdvisor, “Navigating Online Consumer Behavior: 2021 E-Commerce Trends and Forecasts,” provided some answers.

ChannelAdvisor and Dynata surveyed 5,000 global consumers to learn how they are shopping this holiday season, including 1,000 U.S. consumers. ChannelAdvisor also relied on secondary research from sources such as eMarketer. Here are some major takeaways:

E-Commerce Is Exploding

eMarketer data

 

Chart showing people shopping more

E-commerce has accelerated by two-to-three years as a percentage of total retail sales. ChannelAdvisor says that the accelerated pace will continue for the next few years. That’s because Covid-19 forced more shoppers online. Nearly 60 percent of consumers are shopping online more frequently than before the pandemic, and 32 percent of U.S. consumers have more confidence shopping online than they did before the pandemic. A whopping 58 percent of consumers are spending more time on Amazon.

Key takeaway: businesses should expect the major ad platforms such as Amazon, Facebook, Google, Instagram, Snapchat, and TikTok to integrate advertising and commerce more aggressively. We recently saw Google make it easier for shoppers to find products through visual search and display. TikTok continues to launch new shopping features. It’s important that businesses capitalize on these opportunities to capture revenue in these moments when people are searching and browsing on digital.

Get Ready for a Strong Holiday Shopping Season

A chart showing people shopping online

Holiday shopping is increasing in 2021

More than half of U.S. consumers will shop online more than before the pandemic. By contrast, 38 percent of U.S. consumers said they’d shop more online when they were surveyed in May 2020. And 37 percent of U.S. consumers expect to do more holiday shopping online compared to 2020. Only 6 percent of shoppers will shop less.

This finding is not surprising. We saw that even during the hardest days of the pandemic when the world faced economic uncertainty, consumers were willing to open up their pocketbooks and spend. But as ChannelAdvisor noted, much of that spending happened online.

Key takeaway: it’s going to be a busy holiday shopping season, and savvy advertisers are already ramping up their holiday shopping advertising. According to Deloitte, consumers will spend 9 percent more this holiday season compared to 2020. A new survey from JLL says that consumers plan to spend an average of $870 per person on holiday expenses this year, a 25.4 percent increase from last year. Consumers are ready to shop. On the downside, if the global shipping crisis is as bad as economists say it’s going to be, those consumers may experience the disappointment of product shortages. So advertisers are encouraging people to shop sooner while inventory is in stock.

Amazon and Google Dominate Product Research and Purchase

 

Research online

Purchase online

Amazon is the Number One destination for people to research product: 41 percent use Amazon to research products. Google, though, is a strong second place finisher. Amazon has built strong trust because when people are checking reviews, prices, and product inventory, Amazon gives them one easy place to do all that. During the holiday shopping season, even more consumers will do research on Amazon, and  65 percent will purchase on Amazon.

Key takeaway: capitalizing on Amazon Advertising products is a must if you want your brand to be visible when shoppers are doing deep product research. But don’t shift your ad budget from Google if you’re already a Google Ads customer. A two-pronged approach works best.

Social Media Is More Important for Younger Audiences

 

chart showing Instagram usage

People buying on social

Social is the key research channel for younger audiences. 53 percent of 18-to-25 year olds have researched products on Instagram. 51 percent have discovered products they purchased on social media sites. Facebook remains a strong source of product research for 26-to-35 year olds. Meanwhile, 30 percent of 26-to-45 year olds will do the majority of their holiday purchasing on social sites.

Key takeaway: although social media sites lag far behind Amazon and Google for product research, they index high for Millennial and Gen Z shoppers. Given the popularity of Instagram as a shopping destination, it’s important that advertisers capitalize on Instagram ad products such as Instagram Shop to reach younger shoppers. Essentially, Instagram ad products make it possible for businesses to turn posts and stories into ads. Instagram also makes it possible to create ads across Instagram and Facebook, which sounds very efficient – but remember that what works on Instagram might not be as effective on Facebook because Facebook appeals to a slightly older audience.

For more insight into holiday shopping trends, read a recently published True Interactive post, “How Retailers Can Prepare for the Holiday Shopping Season.”

Contact True Interactive

To maximize the value of your holiday shopping ad campaigns, contact True Interactive. We help our clients create effective online advertising all year-round, including the holiday season, and we understand the nuances of creating effective holiday ad campaigns.

Photo by Jakob Owens on Unsplash