Article

What's in store for the 2013 holiday shopping season?

Five predictions for what retailers can expect this holiday season and how they can prepare.

September 24, 2013

By Jake Weatherly

CEO of SheerID

Although there were a few memorable highlights in the busiest shopping period of 2012, last year's holiday season will not go down in the history books as one of the most successful for retailers. What can retailers expect this year, and how can they prepare now?

Retailers will kick off the holiday season way before Halloween.

The holiday season starts earlier and earlier every year, and this year will be no exception, as 30 percent of retailers surveyed by Baynote and The E-tailing Group claim that they'll begin marketing their holiday offers before Oct. 1.

However, businesses expect to see slow sales in early November this year as shoppers wait to see what Black Friday will bring. And even though many shoppers were outraged last year when stores opened their doors on Thanksgiving instead of waiting for Black Friday, the move paid off. ShopperTrak reported that 28 percent of shoppers who made purchases at brick-and-mortar stores over the holiday weekend started shopping by midnight on Thanksgiving Day.

Expect to see retail store employees skipping Thanksgiving dinner or heading back to work after the pumpkin pie to man their cash registers again this year. Now is the time for retailers to cement their plans and promotions for the 2013 holiday season and make any necessary technology upgrades.

Black Friday and Cyber Monday will morph into one, long Cyber Week.

Traditionally, Black Friday has been the day that families and bargain-hunters head to the mall and big box stores to snag the best in-store deals of the season, while Cyber Monday was believed to be the best day to score the best bargains online — suggesting that the rise of omnichannel and cross-channel marketing has changed the retail landscape and consumers' expectations and behavior. Shoppers now expect to find the same prices and discounts available on a retailer's website and in the retail location.

Last year's data from the National Retail Federation revealed that online shopping was up 17 percent year-over-year on Thanksgiving, Black Friday and Cyber Monday, while in-store spending was down almost 2 percent on Black Friday. During the 7 days following Black Friday, year-over-year sales were up more than 22 percent, according to the Chase Holiday Pulse. Anticipate a similar pattern this year as e-retailers launch week long blitzes of discounts, flash sales, and other marketing promotions constructed to create a sense of urgency the week after Thanksgiving. Marketers and inventory managers need to plan accordingly.

M-commerce will continue to gain traction with shoppers.

Analysts are abuzz about the future of m-commerce, and with good reason. Now that more than half of adults in the United States own smart phones and one-third own tablets, the majority of retailers concur that there will be a significant increase in mobile transactions this year.

The Baynote / E-tailing group 2013 Holiday Survey found that almost 40 percent of business owners are hoping that mobile will drive shoppers to their brick-and-mortar locations, but other forecasts predict that consumers will make most of their mobile purchases on tablets. Either way, it is worth it to invest time, money and energy into making sure the mobile user experience is optimized and all mobile payment technology is up to speed by mid-November.

E-commerce will flourish as in-store sales stagnate.

Last January, Internet Retailer pulled reports from ShopperTrak and comScore, reporting that online retail made up 45 percent of 2012 holiday retail growth — a record high. Retail store sales and foot traffic were only up 2.5 percent in 2012 compared to 2011, while online sales were up 14 percent. This year eMarketer conducted a study that predicted online sales in the U.S. to increase another 15 percent year-over-year.

Last minute shoppers used to have no other choice but to make a mad dash for the mall, but this year retailers will provide free shipping as late as December 22nd, and many retailers like Amazon, Walmart, and eBay have been testing same-day or next-day delivery. New or improved e-commerce platforms and third-party service providers have made it simple for any boutique or local business to have an online presence, giving consumers even more choices for shopping online. Retailers need to take a hard look at their e-commerce platforms, shopping carts, conversion rates and servers to make sure they're prepared for online holiday traffic.

Retailers will use technology to create customized offers for shoppers as a differentiator.

In the last couple of years, consumers have been trained to expect deep discounts and free shipping throughout the holiday season. Free shipping with a minimum purchase is nearly universal on e-commerce sites in November and December, and a 30 or 40 percent discount is now the starting point for businesses looking to nab the attention of price-sensitive shoppers.

This year retailers will be looking for ways to differentiate their businesses from the sea of other e-commerce sites offering deep discounts and free shipping. Similarly, e-retailers whose margins don't allow 40 percent discounts or free shipping will be trying other strategies to win business. In our showrooming culture, the importance of basics, like outstanding customer service, an intuitive purchasing funnel and excellent customer reviews, can't be underestimated.

But a growing number of retailers are also trying to relate to their customers on a more personal level. Whether they're offering geo-targeted mobile deals in-store, using email marketing to offer product recommendations based on purchase history, or creating special offers based on customer attributes, retailers will be using technology to form a personalized connection with holiday shoppers. Marketers who come up with creative ways to connect with customers this holiday season will not only increase sales in Q4, they'll also improve brand loyalty and continue to enjoy the payoff in 2014.

Jake Weatherly is the CEO and co-founder of SheerID, an online service that verifies if a retail customer qualifies for special offers, exclusive products, or targeted coupon codes, acting as a bridge between a company's website, POS system, mobile app, or internal customer service console.

Read more about multichannel retailing.

Cover photo by Jo Web.