Europeans are expected to spend as much online during this year’s holiday season as they did in 2014. But shopping online to beat the queues during the holiday period is helping educate consumers about the benefits of ecommerce for the rest of the year.
That was one of the key findings of The Adobe Digital Index 2015 Holiday Shopping Predictions report, based on the study of more than 1trn visits to 4,500 retail websites since 2008, and a separate survey of over 400 consumers per country in the US, the UK, Germany, France, Australia, China and Singapore (Adobe is CMO.com’s parent company).
The prediction shows that the US will register the highest online sales during the Christmas period, with $83bn being spent, and that those holiday sales represent the biggest share of annual sales (22 percent). The UK leads the Christmas spending table for Europe at $26.7bn, followed by Germany and France.
Holiday Online Spending Stable
ADI research suggests that the proportion of holiday spending going online will be roughly the same as last year in the UK, Germany and France. Germans expect 60 percent of their holiday season spending to go online, compared to 57 percent in the UK and 53 percent in France.
The ADI survey showed that, while all EMEA shoppers indicate that lower prices and good deals are important motivators in their desire to shop online, product variety is an increasingly significant factor. The importance of variety has increased substantially over the last year in both France and Germany, making it the second-most important factor in France and the most important in Germany.
While consumers may say they go online for variety, ADI analysis actually shows that the bulk of online spending goes to a very narrow set of products. 65 percent of spend goes to a mere one percent of product SKUs, rising to 76 percent during holiday times. “In EMEA, people say they want variety but the actual spend patterns tell a different story,” says Doug Kessler, Co-Founder and Creative Director, Velocity. Maybe retailers would do better with far narrower product selections. This might make it easier for shoppers to find what they want and reduce the 'tyranny of choice' that tends to paralyse shoppers.
“The data suggests we should be seeing more focused online shopping experiences where people can see what they want and place the order, instead of constantly comparing and optimising.”
Frederic Cavazza, speaker and blogger, shares this sentiment, believing that consumers have grown immune to the plethora of ads and marketing messages online: “When faced with [a large] buying choice with limited time and money, they turn to known brands and products to secure their gifts. This could explain the concentration of spending on 1 percent of all product SKUs - they go to the safest choices.”
Other factors boosting the desire to shop online are that it is seen as less stressful than traditional shopping, although shopping via mobile is seen as more stressful than using a desktop, laptop or tablet.
But Kessler points out that the mobile experience is continually improving, and comfort levels with new payment options will also grow. “Just as mobile is eating the desktop web, it will take a massive chunk of ecommerce revenues. But only for the retailers who get mobile right. It's all about a constant, relentless commitment to delivering the best, fastest, cleanest, simplest buying experience on a small screen.”
There is also a suggestion that people think shopping online is more efficient.
“Nearly a quarter or more in each country say they expect to spend less time holiday shopping this year compared to last,” explained ADI spokesperson Tyler White. “Germans are particularly optimistic in terms of spending less time. They also have the highest percentage of anticipated online spending, which might indicate that online shopping is perceived as having made consumers more efficient over time.”
Martin Meyer-Gossner, CEO, The Strategy Web, agrees: “While the UK is going for Christmas business dinners, the Germans are doing online shopping. Germans tend to be very much efficiency-driven in general. You don’t want to know how much shopping will be done during work hours.”
Learning To Shop Online
While the holiday season--the months of November and December--represents 20 percent of worldwide online spending, White explained that the Christmas season’s dominance of the online spending patterns is beginning to erode as consumers get used to buying online all year round.
“The holiday season is when retailers get people used to shopping online,” he explained. “As a result, more online shopping is happening outside the holiday season, so the relative importance of the holiday season is diminishing slightly.”
That said, Meyer-Gossner believes that, in Germany, the return of online products after the festive season will be largely carried out in-store, as Germans prefer face–to-face contact.
Along with online shopping becoming more common outside the holiday period, the report also shows that the holiday shopping season itself is becoming extended. This is particularly apparent in Germany, where nearly a quarter of consumers expect to start shopping before 1 November, Women are more likely than men to start their holiday shopping early, with almost a third of women planning to start shopping before 1 November this year, compared to 22 percent last year.
Peak Days Differ
Within the holiday shopping period, different days are significant in different countries. The US has Black Friday--the Friday after Thanksgiving--and Cyber Monday--the following Monday. Black Friday is seen as the beginning of the holiday shopping season in the US, although Cyber Monday has been the biggest shopping day and is predicted by ADI to account for $3bn in spending this year, up 13.2 percent from last year.
In the UK, Black Friday is the most significant holiday shopping day, while in Norway and Switzerland it’s Cyber Monday. Mid-December sees the most ecommerce in Austria, Belgium, Denmark, Finland, France, Germany, The Netherlands and Sweden.
As Cavazza says, consumers learn fast and group their purchases during sales periods such as Cyber Monday and Black Friday, and smart shoppers are now very aware of the trading pattern around Christmas: “In most European markets, the shopping activity will reach its peak in mid-December (mostly Christmas gifts), then plunge until early January when sales promotions begin.”
Kessler suggests that several trends are at play in the growing popularity of ecommerce: “The continued rise of the ‘big’ shopping days; shopping for the holidays later and later; the anticipation of less time spent shopping; and the stress levels of offline shopping all indicate that online shopping has created an attractive opportunity for an increasing share of time, wallet and affection.”
Reviews Grow In Importance
Another factor that emerged as increasingly important from the survey is product reviews, according to ADI spokesman Ryan Dietzen.
“We’re seeing the rise of social media as a source of product reviews,” he said. “It’s a key part of the customer journey as people turn to social media for input.”
Almost half of respondents in the UK said product reviews are one of the top two influencers on them when making major purchases, and 43 percent said they used social media to find out which products are “best” compared to only 25 percent last year. The number influenced by reviews was even greater in Germany at 64 percent, while in France the percentage of respondents using social media for research jumped from 28 percent in 2014 to 35 percent this year.
It is not a finding that shocks Jerry Silfwer, Digital Strategist, Spin Factory: “When asked how much they are influenced by others, most customers tend to underestimate the effects of social proof on themselves. So I don’t find it surprising to see more and more online retailers incorporating social recommendations into the very fabric of their platforms.”
He adds that retailers who remove social media recommendations from their platform will simply drive customers to look for those recommendations elsewhere. “In tests that I’ve run, bad or mediocre reviews actually led to higher conversion rates than showcasing no reviews at all.”
The ADI 2015 Holiday Shopping Predictions report is based on analysis of aggregated and anonymous data from the Adobe Marketing Cloud, Adobe Analytics, Adobe Mobile Services, Adobe Media Optimizer, and Adobe Social.
About Adobe Digital Insights
Adobe Digital Insights publishes research on digital marketing and other topics of interest to senior marketing and e-commerce executives across industries. Research is based on the analysis of select, anonymous, and aggregated data from more than 5,000 companies worldwide that use the Adobe Digital Marketing Cloud to obtain real-time data and analysis of activity on websites, social media, and advertising.
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