Yieldify CEO Jay Radia, fresh from his return from NYC, discusses customer spending trends from recent weeks to give insights into the ways eCommerce will need to move in 2015 to keep up with changing consumer behaviour.
With a drawn out deal-heavy ‘Black November’ over and now Manic Monday on the retail calendar, we’re witnessing shifts in how consumers shop.
If forecasts are to be believed, online consumer spending isn’t going to let up in the dash to New Years. IMGR predict £675 million will be driven on Manic Monday in the UK alone – £15 million more than on Cyber Monday.
Changes in the way people shop are being driven by convenience, progresses in mobile technology and the optimisation of existing shopping channels, both online and offline.
Here we share our analysis of these key trends over the past few weeks so that eRetailers can learn from the habits of their potential customers moving into the New Year.
US and UK shoppers spent differently over Cyber Weekend
Earlier this week, we shared that Black Friday sales across all of retail – both high street and online – had fallen by 11% compared to the same period last year. With US consumer confidence down by 5.4 pts this month, it seems that forecasters may have been too optimistic for seasonal spending.
However, record breaking spending is now occurring online.
US consumers drove the biggest day in eCommerce history, spending $2 billion on Cyber Monday.
In contrast, UK shoppers spent more on Black Friday than on Cyber Monday (£810m against £650m).
This difference perhaps shows that the American sales window is having a slower proliferation across the water – but Black Friday was still the biggest UK online spend in the period on record.
SInce Amazon introduced these Thanksgiving deal days to the UK market four years ago, there has been constant year on year growth in online spending and there seems to be no reason to expect this to slow down over the same period next year.
The Guardian even suggests that Boxing Day – traditionally the UK deals day of choice – has now been supplanted by Black Friday. And Retail Times would have us believe that online spending this season knows no limits and will continue to climb, pointing to Experian Hitwise data that shows Boxing Day 2013 spending was up 8% on 2012.
Regardless of the overall figures, big spending inevitably occurs and even as the scale of that spend fluctuates, consumers are increasingly moving towards purchasing online.
Portable transactions are increasingly popular
Greater penetration of mobile and tablet devices means mCommerce is playing a more prominent role this season.
On Thanksgiving, Paypal saw a 47% year on year increase in global mobile payments – which jumped to 62% on Black Friday.
In John Lewis alone, 695% more convertible tablets have been sold compared to last year. Increased interest in mobile and hybrid products means a larger install base of future tablet shoppers.
Better mobile and tablet buyer journeys with more efficient checkout processes are likely to be driving up spending through these channels. But more than anything, this will be down to sheer ease of use.
Perception of the high street has shifted
The rise in online shopping is recasting the way consumers use bricks-and-mortar stores.
Millennials shopped more than any other group on Black Friday (74.3%). Far from this being testament to the strength of the high street, eMarketer suggests these 18- to 34-year-olds did this because of the event was a ‘novelty activity’. People viewed the discount bonanza as a unique social experience, which is unlikely to be repeated until the next blockbuster sale window.
Also Click & Collect is making shopping easier by blurring the lines between channels.
The service isn’t exactly new – Argos launched the first scheme in the 2000’s – however, increased adoption by brands has raised consumer awareness of the service that is now playing a key role in driving online and offline sales.
Maplin suggest that their ‘particularly popular’ click & collect service played a large role driving a 70% increase in online transactions and 30% rise in high street sales on Black Friday.
Enabling or cultivating this cross-channel solution should be a priority in 2015, not least because customer use of Click & Collect is forecast to increase to 76% by 2017 – up from 35% last year.
Social is beginning to impact buyer decisions
Social commerce has been an enticing prospect for some time, but uptake hasn’t been as swift and dramatic as expected.
This season, social has functioned as a researching tool rather than a channel for direct purchase.
Mailorder cosmetics service Birchbox found that 55.73% of women had been inspired to buy by blogs and that 33.94% of women will use social networks to look for the perfect Christmas present.
Beyond research, social has facilitated conversations which may provoke online shopping. In the 7 day period running up to the Cyber Weekend, Twitter chatter doubled from last year with 2 million discussions taking place using the hashtag #BlackFriday, and #CyberMonday was discussed 330,000 time, up 75% up on last year.
But research and chit chat doesn’t directly translate into sales.
Social is expected to be a bigger player in driving transactions in 2015 as big players roll out transaction infrastructure and clear calls-to-action.
Twitter, Facebook and now Tumblr are all launching ‘Buy’ buttons which link to internal or 3rd party transaction platforms. This a clear sign that social is seriously gearing up to drive conversions in the year ahead.
Consumers expect a coherent experience across all channels
Portable, Click & Collect, Social – these are all key areas of growth moving into the New Year. Forward thinking eRetailers are already taking steps to optimise all their channels by investing in a joined up omnichannel experience.
By staying on top of how consumers spend, you can keep your eRetail channels competitive. Paying close attention to these trends enables you to develop more intouch, relevant and agile strategies for speaking to your customers, driving up conversions.