This year shoppers will go about their business in a retail environment where online commerce has taken a bigger piece of the holiday sales pie.
Customers are clearly appreciating the frictionless shopping experience that online platforms and payment providers can offer. It also doesn’t hurt that 59 percent of people, according to a PayPal study, would rather do almost anything than deal with holiday shopping crowds. That includes shoveling snow for a quarter of that group.
Here are six points that highlight how technology has reshaped holiday shopping—and the perceptions of those doing the shopping.
1. Online Holiday Sales This Year Will Rise 17 to 22 Percent
If this prediction announced by Deloitte in September comes to fruition, then online holiday sales will beat last year’s increase of 16.6 percent. All told, e-commerce sales are expected to reach as high as $134 billion—that’s a 22 percent increase year over year—during the 2018 holiday season.
That’s a strong growth rate, but the numbers associated with mobile may eclipse it as we look ahead to 2020 and beyond. Which brings us to point number 2.
2. Sixty-Five Percent Of Millennials Plan To Make A Purchase On A Mobile Device
That’s compared to 48 percent of Gen X shoppers and 30 percent of baby boomers, according to survey data released by RetailMeNot, which publishes websites that give consumers access to coupons.
Millennials demonstrate a higher level of comfort with mobile shopping compared to other age groups. They’re also more likely to demand retail experiences that are personalized and instantaneous, Marissa Tarleton, the chief marketing officer at RetailMeNot, said when the survey came out last month.
Half of retailers that responded to the survey said savings websites and apps are the most effective at increasing sales revenue during the holiday season.
This growth in mobile sales is rippling across the globe. In fact, mobile purchases as a percentage of total digital purchases in Europe increased from 15 percent in 2013 to over 30 percent in 2017.
The Asia-Pacific market’s evolution is even further along — increasing from 32 percent to 65 percent in the same timeframe.
3. Shopping’s Center Of Gravity Has Shifted To November
Before e-commerce, Black Friday was one of the biggest shopping days for brick-and-mortar retail. When consumers started holiday shopping online, Black Friday and Cyber Monday (which debuted in 2005) fueled the trend toward an earlier and longer shopping season.
Adobe Analytics reported that Americans spent $19.62 billion online in 2017 during the five-day period between Thanksgiving and Cyber Monday, an increase of 15 percent over the previous year’s totals.
In the words of one online commerce expert: “Holiday online shopping continues to trend earlier and earlier each year, with this year eclipsing last year by about a week.”
But the U.S. holiday shopping spend during this five-day period pales in comparison to Nov. 11 in China. Known as Singles Day, the “holiday” that began as an excuse for students to celebrate being single is now an Alibaba-fueled international shopping tour de force that last year generated $25.3 billion in sales.
4. Generation Z Will Change Digital Commerce
Answers to many of the questions regarding the future of retail may be held by Generation Z, or those born between the mid-1990s and the early 2000s.
Generation Z will represent 40 percent of the consumer market by 2020. And because this generation may spend twice as much mobile time shopping than millennials, online retailers must do all they can to adapt to them.
A recent study by LivePerson that polled young consumers in six developed countries found that most would rather leave home without their wallet than without their phone.
Now, it’s true that Gen Z’ers are more likely to shop at the mall than millennials. But pay attention, brick-and-mortar retailers. You’ll still need to be tech-savvy to lure them in. That could mean offering a streamlined “buy online, pickup in store” experience, providing simple methods for purchasing via social platforms like Facebook, Instagram and Pinterest or supporting social payment methods like Venmo.
Social media’s influence on purchasing is increasing, and while purchasing through social networks has yet to explode, Gen Z’ers are likely to be the catalyst.
5. Holiday Travel Is Almost Entirely Digital
While travel agents continue to provide a valuable service by saving their clients time and putting together itineraries they might not have created on their own, the numbers don’t lie. Only 14 percent of Americans polled at the beginning of 2018 said they had used a travel agent to plan holiday travel. That’s compared to 59 percent who said they used their smartphones to plan their journeys.
Although the European online travel market is growing almost as fast as the U.S., regions like China are bucking the trend by clinging to travel agents.
As forward-thinking travel sites use payment technology like Hyperwallet to simplify the complexities of booking across global regions and currencies, the two largest online travel agencies, Expedia and TripAdvisor, are expected to dominate into the future.
6. New Payment Systems Are Emerging And Streamlining Online Shopping
Just as payment systems like PayPal paved the way for—and continues to offer—a dramatically improved payment process, digital wallets like Apple Pay and Venmo are taking online shopping to the next level.
With Apple Pay, anyone with an iPhone can purchase online and in-store with one click or touch. With Venmo, U.S. customers can check out as easily as they can send money to friends and family. Because consumers can announce their purchases to their networks, businesses that offer Venmo can receive a word-of-mouth marketing bonus.
Shopping online has been a part of our lives since Amazon launched in 1995, but holiday shopping really found its groove around 2010 and 2011, when retail e-commerce sales flourished after a few flat years.
Considering the industry’s evolution during this current decade, imagine what online shopping will be like as we approach 2030. Expect an environment that supersedes by an order of magnitude today’s frictionless experience.