Analysts forecast that US web shoppers would spend $62 billion this November and December realizing an eCommerce growth of 15.1% this holiday season. We already know most of the drill here, the trends include changing shopping patterns, increase in in-store pickups, competitive pricing strategy, popular household item categories, and banking on customer service. Here are 6 trends ringing bells for retailers & shoppers:
1. Consumers continue to change their shopping patterns. Includes increase in online shopping; research being done online and then they shop in the store; less traffic in malls at the usual times, but increase in in-store pickups and in-store sales. (see #3 below).
2. Retailers continue to evolve their multichannel and competitive shopping processes. A number of eCommerce companies, like Warby Parker very recently opened flagship stores. Stores offering online ordering and in-store pickup are offering some stunning statistics. (See #3 below).
3. Increase in in-store pickups. Retailers realize a nearly 40% boost in sales when they get the customer into the store.
4. Price competition, dynamic pricing in the retail market. Retailers continue to adopt the strategy of pricing to the market in real time. The pricing transparency phenomenon is being driven by mobile phones and Amazon and Google.
Two anecdotes from Deb Weinswig Global Retail Research Analyst at Citi Investment Group: Online Retail Trends You Need To Know For 2013:
*Deb said: We do a bi-weekly pricing survey for all groceries and drug type items, and it’s "shockingly" closely followed – to the point that the retailers themselves now quote it. They will actually make real time adjustments; they will literally go across the street and see the competitor's price.
*Deb said: Last year, we put out a weekly pricing survey, and we found that Amazon came out much higher-priced than Walmart, Target and some of the other toy retailers. Amazon said that couldn't possibly be true but we had made screenshots of the prices to show them.
5. Service really important. A retailer may be 10% higher than the other guy if he offers better service. There is something about service and making sure that everyone knows you have a differentiated offering; regardless, the retailer still has to know where he stands in the marketplace.
6. Category trends. Sales of big-ticket home items -- like furniture, washers, dryers, and refrigerators -- are the hottest categories. Mattresses, too, but décor items have not raised any excitement. Also, smaller interest in footwear, accessories, apparel, and toys.
*On the other hand, some key brands like North Face and Ugg Boots were driving the highest unit volume.
*XBox launch and PS4 launch impact the holiday, not only by their own sales, but will lead to proliferation of products on which to play games, so game buying segment is growing.
Bottom Line For Your Bottom Line
The season from Thanksgiving to Christmas -- including Black Friday, Cyber Monday and other promotions -- are the most important five weeks of the entire year. Price transparency is the highest at this time, as well. A retailer’s willingness to match price and to explain his pricing strategy is terribly important, along with enabling associates in a store to do what they need to do to get the sale done. Finally, although the analysts noted that it's a crowded market, specialty retailers can succeed if they have a unique value proposition.