Pumpkins are still out on porches and windowsills, but it’s crunch time for retailers as consumers shift into holiday season mode.
It’ll be yet another season where mobile and online shopping continue to grow, at least that’s what data from Adobe’s annual holiday forecast predicts. Taking a look at “trillions of visits to U.S. retail sites,” plus an accompanying companion survey of more than 1,000 U.S. consumers, the report details what retailers and brands can expect this holiday season.
“The overall takeaway is that the online shopping growth is very healthy,” said Peter Sheldon, senior director of strategy for commerce, Adobe. “The other takeaway [is that] mobile is really coming into its own as a channel.”
Adobe predicts that $124.1 billion online sales will occur this year, representing a 14.8 percent increase from last year’s $108.2 billion. Major shopping days like Cyber Monday present their own findings, such as the “golden hour” of shopping that day, which occurs from 10 p.m. to 1 a.m. ET. Consumers will also spend 5 more percent on shipping and return 18 percent more items on Cyber Monday. Though shipping and returns are costly to retailers, Sheldon said not all brands offer free shipping or return and that some “take a strategy” to invest in these perks as a “holiday investment.”
Another revenue opportunity is in mobile shopping—Adobe predicts smartphones will drive 48.3 percent of retail visits and 27.2 percent of revenue. Sheldon said that while mobile revenue is up 11.6 percent year over year, there’s still a lot of friction in mobile checkout and mobile-responsive sites. He said he expects retailers to shift from creating responsive websites to progressive web apps (PWA) next year, which load faster and are used by companies including Starbucks and Debenhams.
“There’s a lot of mobile revenue being left on the table,” Sheldon said. “We’re very bullish [on] the case of [the] mobile experience across retail significantly improving next year.”
Another reason Sheldon thinks companies will move to PWAs is because app users spend 2.4 times more time browsing, look at 30 percent more items, and are two times more likely to order on an app versus the web.
“Apps aren’t going to go away, but we’re going to see a shift in investment dollars away from apps and into PWAs,” Sheldon said.
While social commerce is becoming an increased area of interest for retailers and brands, Adobe’s forecast shows a decrease in revenue per visit of 11 percent, while other referring channels like direct traffic and search are up 36 percent and 23 percent, respectively. Sheldon attributes the decline to “consumer skepticism” coming into play, with people wary of the ads they see on social media and what they click.
But, for retailers who have a bricks-and-clicks strategy, brick and mortar is leading to a 28 percent conversion online. According to consumers Adobe surveyed, 58 percent of millennials will visit a store to see an item that they want to buy online. Another positive area of retail is the buy online, pick up in-store model, which grew 119 percent from January 2018.
“Yes, the store is still playing a critical role as a showroom, as a flagship destination to see the product, try the product etc., but it’s so much more convenient to go home, discuss that purchase,” Sheldon said. “But, ultimately they are buying the product from that retailer.”
The report also shows that retailers don’t need to worry about the midterm elections taking away from visits; while there is a 6 percent dip, it’s predicted to go back up by 8 percent on Friday.
“Some retailers were a bit concerned with the timing of the midterms and the impact it might have on spend and during Thanksgiving period,” Sheldon said. “The retail data that we’ve collected here is really showing that it’s negligible impact.”
Adobe rounds out the report by pointing out the best days for low prices, such as saving 16 percent on Black Friday on computers, as well as when items will be out of stock, such as Nov. 30 for toys. The company also found from the survey that more than 20 percent of people shop while in the bathroom and 5 percent at an event like a wedding. This shows that shopping really can occur anywhere, at anytime..