The holiday shopping season is approaching and the marketers have to target consumers in the most relevant way. Which marketing and ecommerce trends should they look out for?
There’s a big marketing opportunity during the holiday shopping season, but there’s also a challenge of listening to consumers’ demands and delivering the right message to them.
I’ve been talking to Michael Klein, director of Industry Strategy for Retail at Adobe, about the top trends in marketing and ecommerce and how they affect consumer behaviour.
How is online spending expected to change during the holiday season of 2016?
We anticipate that Thanksgiving and Black Friday online sales will continue to grow. More than ever, consumers are using mobile devices for their browsing and buying activities while away from their desktops, which contributing to online sales growth. Black Friday, which saw $2.74B in sales in 2015, could eclipse Cyber Monday’s $3B sales figure from 2015 for the first time in history this year.
Additionally, what we started seeing last year is people shopping online later in the holiday season. According to Adobe Digital Insights data, in 2015 there were 31 days of at least $1 billion in online sales between Nov. 22 and Dec. 22 – a drastic increase in billion-dollar days over years past – and the largest increase in YoY in online sales occurred the week before Christmas.
We expect this trend of online shopping continuing later in the season in 2016, as well.
What’s the biggest trend of the year?
The importance of personalization. Consumers demand a personalized, engaging experience – whether they’re online or in-store. Marketers will continue to offer more value to shoppers who are willing to share information.
In fact, 43% of businesses will increase the amount that they spend on in-store technology this year. This includes the rise of voice-enabled shopping, augmented reality, virtual reality and personal shopping bots.
How is the retail industry changing with the rise of mobile shopping?
Last year, 50% of shopping visits and 27% of online sales were driven by a mobile device according to Adobe Digital Insights.
Consumers are actively shopping via mobile web and applications, across their smartphones and tablets. As such, retailers must continue to become more mobile than ever and offer convenience to consumers.
Expect to see retailers increasingly utilizing mobile to showcase last-minute deals, conducting mobile promotions to stay top of mind-for holiday shoppers on the go and more. We will also see increased conversion rates for mobile shopping, especially given the iOS 10 updates that now embed Apple Pay into both Safari and iMessage for one-click purchase while on an Apple device.
Should marketers focus more on mobile consumers?
Absolutely. As more shoppers turn to mobile for shopping, marketers must focus on the mobile experience. This includes ease of navigation, mobile optimization and providing a seamless way for people to easily enter payment information. Failure to focus on the mobile experience risks customers not making a purchase turning to competitors.
Mobile search also continues to be critical for the mobile consumer when they’re out and about. Between 2013 and 2015 there was a 76 percent growth in shoppers using mobile search to find a product or a particular retailer. During this same time period, we saw a 40 percent decrease in shoppers directly going to a retailer’s brand URL.
Marketers must focus on providing a personalized, mobile experience both online and in-store, such as:
- Use mobile payments options in-store to streamline the checkout process and meet consumers’ demands of efficiency
- Arm store associates with mobile devices to support better customer service, access to inventory availability and checkout services
- Use video and chatbots to inspire online purchases and increase the number of items within the shopping cart
How could VR change the shopping experience?
I saw an interesting stat recently from a survey by Greenlight VR – 53% of respondents would be more likely to purchase from a brand using VR than one that doesn’t.
The potential for VR in retail is huge. For example, think about the ability to allow shoppers to try on a dress or suit virtually via a retailer’s app and adjust venue settings to reflect a cocktail party or important meeting.
Or during a cross-country flight perhaps a traveler has an opportunity to virtually accessorize, and have that tie clip and cuff links he loves packed up and waiting when he lands in London. VR provides an opportunity to lure tech-savvy consumers with digitally-driven shopping habits.
VR may not make it into the physical store, but will be a game changer for consumers who are at-home, or traveling where they will have a secure location to view VR content without the feeling of vulnerability by having a headset on.
That being said, I think that AR will be bigger than VR, especially in categories such as home furnishings and home improvement.
There is a growing trend of conversational commerce with AI and bots the past year. How can retailers take advantage of it?
AI and chatbots have the potential to inspire purchases and increase the number of items in people’s shopping carts. Yes, this can lessen the load of your customer service team and sales associates, but the bigger opportunity maps back to personalization and engagement.
Look at Amazon’s Echo, for example. Echo ushered in the wave of conversational commerce, making it easy for people to simply ask what they need.
Similar to Amazon, retailers can take advantage of conversational commerce by offering online shoppers a “conversation” fueled by AI that helps them find what they need. This also further bridges the gap between best of in-store and online shopping experiences.
As for Facebook Messenger and other messaging apps, retail can learn from the travel industry and benefit from delivering a better experience than simply a search query that takes a consumer back to mobile web. The day will eventually come when retailers actually deliver product results within messaging apps.
We have seen an increased interest in online grocery shopping. How could grocery retailers adapt their strategy during holiday season?
Massive growth in online grocery shopping (66% YoY according to Adobe Digital Insights) is happening beyond major tech and urban centers, reflecting people’s desire for convenience and time savings.
This means digital strategies to reach online shoppers have become a must for grocery retailers marketing to consumers. This is especially important around Thanksgiving and dinners during Christmas of Hanukkah as families plan to cook for families and friends. Since over 95 percent of groceries are still purchased in a physical store, grocers must ensure they provide seamless experiences that cater to both the online and in-store.
Is “buy online, pick up in-store” another reason for customers to pick one retailer over another?
It can be, especially for consumers shopping at the last minute that are worried about gifts not arriving in time for the holidays. People look to retailers that can promise same-day, last minute delivery or offer “buy online, pick up in-store” options that alleviate concerns that items ordered the week prior to Christmas won’t ship in time.
Additionally, this option can mitigate high shipping costs. Perhaps more importantly is the ability to buy online and return to a physical store which recent reports indicated was the number one reason why a consumer would choose a brand.
Email and display advertising had been very popular last year during holiday season. Should we expect a change this year?
Email is the lifeblood of retailers and can be attributed to as much as 35 to 40 percent of business, so we will continue to see our inboxes flooded with emails.
Display will also be a key driver as brands become more aware of abandoned shopping sessions and carts. As stated above, personalization in will be key to stay relevant, but retailers must not cross the line where they’re viewed as creepy.
How does social media affect online shopping?
Social media messaging platforms present new opportunities for retailers. Smart retailers will look to tap into new ways to engage with consumers during the holiday shopping season using Facebook Messenger, Snapchat and more in a personalized, contextual and conversational way.
Additionally, user-generated content (UGC) presents an opportunity for retailers to build consumer loyalty and trust and increase engagement that not only leads to purchase, but drives advocacy to sell to others. UGC is one of the most effective ways to influence purchase decisions by creating real-time, engaging experiences that individuals can relate to.
What can we learn from online user behavior to be more effective in marketing?
Learning from shopper behavior is critical and marketers must take action from data to maximize value and provide a better, more relevant and personalized customer experience.
Start with your goals – is it to improve conversion rates, or to see more items added to shopping carts? Then use data from online behavior to identify trends and inform your marketing activities and customer interactions accordingly. This is about having a 360-degree view of the customer, which consists of their interactions both online and offline (versus in silos).
What’s the best way to target online consumers during holiday season to turn interest into sales?
This also maps back to retailers’ having a 360-degree view of customers. This way retailers can drive personalized offers and promotions for each individual.
How can marketers target a younger audience?
This is about understanding the younger audience’s preferences. There’s no one-size fits all approach; rather you need to take a data-driven marketing strategy.
Every consumer interaction regardless of demographic must be personalized based on behavioral, real-time contextual and even third-party data to personalize interactions as much as possible. That said, what I can share is a survey we conducted recently of 1,004 white collar workers unveiled that consumers prefer to receive marketing offers via email versus other channels, including millennials (ages 18-34).
What’s the best advice you could give to retailers when planning their strategy for the holiday season?
It may only be October, but retailers have already started planning for the holidays months ago. Consumers spent a record-breaking $83B online during the 2015 holiday season, according to Adobe Digital Insights, and we expect online shopping to surge even higher this season.
In order for marketers to attract and retain consumers during the upcoming holiday season, they can’t miss a moment with their audience. This means ensuring that the right mobile marketing strategy is in place across all marketing communications including email, ads, search, etc.
And, it also means being tapped into the latest innovations around voice shopping, VR and AR, social media and grocery shopping. As a marketer, ensuring your mobile strategy is buttoned up and that you’re using the newest technologies to reach and engage with shoppers, will be key to success this holiday season.