02 Nov Top 8 Holiday Sales Predictions for 2015
The holidays are here! Cue: Panic. While personally that means I’m already behind on my shopping list and I probably won’t be sending out any Season’s Greetings, for business owners this time of year is filled with nail-biting excitement! You’re predicting high sales! You’re pushing out new marketing campaigns! You’re focusing on the season as part of new content and product advertising! You’re benchmarking other amazing holiday campaigns you’ve found online! You’ve made the list, and you’re checking it far more than twice as you’re eager to lead the charge on the New Year by putting a record-breaking successful 2015 holiday marketing campaign behind you. First things first, you have to prepare.
While you should already be well underway for your holiday marketing campaigns (see this blog post here about getting started early), what has yet to be revealed is what you can anticipate from this season. That’s why we’ve put together a few hard facts! So, let’s get started.
The 2014 holiday shopping season was, as the National Retail Federation puts it, “one for the history books,” with Disney’s “Frozen”—not merely a movie but a phenomenon—helping to drive merchandise sales. In addition, consumers started shopping early, even before Thanksgiving, and averaged more than $800 on holiday spending for gifts, decorations, and edibles.
How is 2015 expected to shape up in comparison? Below are several predictions for what retailers, online marketers, and small business owners can expect this year as the holiday season approaches.
1. Expect an Early Start
This year, businesses should expect consumers to get out of the gate early. Practical Ecommerce, the online marketing, management, and social media blog, expects that “at least 25 percent of holiday shoppers in the United States will purchase a Christmas gift before Halloween.”
This continues the trend from last year, where a similar percentage of shoppers began their shopping so early that it may not even have been included in holiday spending statistics. In fact, last year, up to 48 percent of buyers had completed most of their holiday purchases by Cyber Monday—the Monday after Thanksgiving.
2. Expect a 4-percent Increase Over Last Year
Deloitte, one of the “Big 4” tax and professional services companies, predicts that overall holiday shopping will top last year’s spending by up to 4 percent, with total sales of $961 to $965 billion dollars. Although this will not match 2014’s holiday season gain of 5.2 percent, it is nevertheless a healthy number.
Helping to drive this growth, the company predicts 8.5- to 9-percent revenue growth in non-store— including mail order and online—purchases.
3. Online Sales Growth Will Hit Double Digits
Practical Ecommerce predicts that online retail sales will grow nearly 14 percent over last year. This continues a trend of recent years in which online sales continually outpace retail sales growth overall. It almost certainly reflects consumers’ growing comfort and familiarity with online buying, as well as the convenience and cost advantages of shopping from home.
Total predicted online sales are $79 billion, which accounts for around 9 percent of total holiday sales for 2015. This rate of growth is slightly less than that enjoyed by retailers last year, but as Practical Ecommerce writes, “it is growth from a larger base, and is still very positive for the industry.”
4. Online Engagement Will Affect In-Store Sales
Not only will the Internet drive online sales this holiday season, but online engagement will dramatically affect in-store sales, as well. This is crucial, since—despite the growing importance of online retail—90 percent of all sales still take place within bricks-and-mortar outlets. The thing to note here is, how do they find your store and what your store has to offer this holiday season?
How are you keeping your local shoppers from finding that last minute holiday gift item somewhere else? Having a strong social media marketing strategy and by updating your website with the latest information, I have no doubt you will be surprised by the results this extra bit of customer service will bring for your business this year!
Ron Sides is Vice Chairman of Deloitte LLP and the sector leader for Deloitte Retail and Distribution. He says, “[N]early 80 percent of shoppers say they engage with a retailer or brand through digital channels before setting foot inside the store.” Not sure about that statistic? Well, Search Engine Watch agrees by saying 80% of consumers conduct local searches on search engines prior to making a purchase. In fact, as many as 15 percent of the people searching for local items are searching while standing in a store with the same or similar product. Of these location-based searches, 32 percent have led to an in-store purchase.
This is exciting news for bricks-and-mortar retailers and other storefront businesses the chance to connect online with holiday shoppers who seek gift ideas, product reviews, new technology, or the convenience of ordering online and picking up the item in-store.
In addition, shoppers who engage online via phone or other device—even while in the store—are more likely to buy and are likely to spend more.
5. Email—The Most Effective Marketing Tool
Email will continue to be the most important marketing tool driving sales during the 2015 holiday season. More companies will enact automated email marketing campaigns to take the drudge work out of connecting electronically with consumers. This lets businesses provide follow-up communications to buyers who have already made purchases, so the seller can stay connected to those buyers and drive additional sales all year round.
That businesses intend to take advantage of email is not surprising. Last year, a MailChimp Holiday survey revealed that 100 percent of respondents intended to interact with customers via email. Of those respondents, 73 percent operated e-commerce businesses, while the rest were bricks-and-mortar operations with one or more locations.
The survey revealed areas of possible improvement. For instance, most respondents—between 52 and 77 percent, depending on company size—did not vary their messaging according to audience segment. Savvy marketers will take advantage of automated email services and change the content of their messages to target different segments of their customer base.
6. Online Reviews Will Be Even More Important
Forbes predicts that, as buyers progressively engage with retailers on the Internet, online reviews will continue to increase in importance. Data suggests that 78 percent of buyers are influenced by online reviews. This means that businesses—small businesses in particular—must pay attention to what customers are saying on Yelp, Foursquare, Google+, and other review sites or pay the price in lost sales.
7. Sellers Must Embrace Mobile
CNBC reports, “The rapid increase in mobile penetration caused a number of retailers to stumble last holiday, most notably Best Buy. While there will still be some laggards, Sides said he expects companies will be better prepared for the shift.”
Deloitte’s Ron Sides reaffirms that companies who have embraced mobile technologies and made their sites friendly to users on phones, tablets, and other devices are likely to be the big winners this holiday season. Mobile sales made up 22.6 percent of online sales and 45 percent of retail traffic last year.
Therefore, a website that functions properly is crucial, as users have become used to quick page loads, smooth transitions, and well-designed infrastructures. Sides also added, “Online shoppers have a much shorter attention span than those who took the time to drive out to a physical store.” [Note that all three of these links are to the same article, but I included them because of the quotes]
8. Gift Cards Will Be Huge
Gift cards for restaurants, retail stores, online stores, and other businesses will likely comprise a significant percentage of holiday sales in 2015. These convenient, practical gifts allow recipients to choose exactly what they want, while allowing gift givers to target the gift to the recipient’s general tastes.
Businesses that do not offer gift cards should get on the ball and make the necessary moves to put them in place. In 2014, gift cards made up $31 billion of holiday sales. This year, the number is likely to be considerably higher. Since 2010, yearly gift card sales have increased by amounts between 5 and 10 percent. In 2015, sales are predicted to rise by 6 percent over 2014 levels.
Businesses preparing for the holiday 2015 season should make sure they have their technology in place. Automated email capabilities and mobile websites will be crucial this year. Online engagement will even affect in-store purchases, and a solid online presence—including favorable reviews—can make or break a business’s seasonal earnings. Overall sales growth from 2014 will be healthy, particularly online, and any business—not just retailers, but service providers, as well—who wish to maximize their sales should consider offering gift cards as another revenue stream.
It appears that this year could be a banner year for business, especially those that take advantage of the opportunities listed above.