Technology in Holiday Shopping

Six Ways Digital Has Changed Holiday Retail and E-Commerce Sales

Explore six holiday retail trends changing the consumer journey, including AI-driven product recommendations and conversion optimization at every touch.

This year was another banner year for Black Friday and Cyber Monday sales, and the efforts put behind complex digital marketing journeys deserve much of the credit. Estimated Cyber Monday sales broke records at $6.6 billion, a 17% increase compared to 2016. Americans also spent $5 billion online during Black Friday, leading to an overall increase in sales despite foot traffic at physical retail stores going down nearly 2%.

Analysts saw the continued move from brick-and-mortar to online sales as one of the biggest shifts this year. Another interesting development was the rise in the use of multiple channels and mobile phones for product research. Personalization also had a big role to play, as did the increasing pull to provide a consistent omnichannel shopping experience.

To show you just how much these developments have altered the way we shop for the holidays, consider the following biggest trends seen during this year’s shopping season so far.

Single-Day Sales Lose Importance as Online Sales Grow and Deals Stay Put

We wrote a few years back about how Black Friday has become less of a single-day event and more of an October-to-December sales push. Online deals have a tendency to pop up in waves around this time, and they aren’t nearly as time sensitive as traditional Black Friday doorbusters.

“Every day is Black Friday because consumers are so well educated as long as they have a smartphone in their hand,” observed one industry insider.

Indeed, many deals found on the biggest retailers’ floors could also be found online and not just in the 24 hours of Black Friday. A survey of consumers in the Chicago area found that the number of locals who intended to make purchases via smartphone doubled, and shoppers indicated they planned to spend more money online than in-store. People across the country also spent $2.87 billion on online shopping on Thanksgiving Day this year.

Retailers have been shifting these practices in direct response to consumer behaviors and demands. Since holiday shopping requires just a few minutes at a time rather than an entire day off work fighting the crowds, there is less pressure to be somewhere at a particular time and place to get deals.

Product Discovery and Inspiration Found Almost Everywhere Online

Holiday shoppers — whether looking to buy in-store or online — increasingly turn to a multitude of digital channels during their buying journey for ideas and research. For example, 85% of people turn to Google for product information and 72% turn to Amazon, indicating that a significant majority use both. In response, online channels and the technology powering their systems accommodate a variety of individualized shopping journeys with unique tactics for converting the buyer to the next stage at nearly every touchpoint.

Reflecting these diverse starting points along the path to purchase, consumers now have more places to look for gift inspiration than ever before. Sixty-eight percent turn to YouTube content, 70% read online product reviews, and 57% turn to social media to ask friends, family, and colleagues for recommendations.

Among the general population, TV remains the biggest source for gift ideas. According to the National Retail Foundation, 41% to 47% of people get ideas from television programming and commercials. However, younger generations indicate that this dominance is shifting. Forty-seven percent of millennials use Facebook for gift ideas, and 44% of Gen Zers turn to Instagram.

These shifting preferences mean marketers will need to provide content, paid ads, and influencer collaborations across multiple channels to generate the same inspirational spark most people once found on TV. For instance, Resolution just launched CommerceConnect™, an integrated set of capabilities that help brands engage with shoppers throughout their path-to-purchase, driving discovery, consideration, and sales in the expanding digital shelf.

Fractured and Cross-Device Customer Journeys Lead to Increased Need for Consumer Identity and Attribution Solutions

Due to the increasing use of smartphone devices and diverse shopping channels, the need to track movement and attribution across both devices and channels has grown.

People are actively researching products and taking action like “add to cart” throughout the day on their smartphones. One study saw that as many as 85% of consumers indicated they were likely to use a mobile app during their shopping process. Total e-commerce retailer traffic from smartphones rose 22%, and purchases made on mobile rose 39% compared to 2016. These percentages represent huge gains even though 76% of purchases were ultimately made on desktops.

Having the ability to track consumer actions from mobile research to final purchases can highlight effective mobile marketing tactics. Retailers can use this information to increase the likelihood of converting someone to a final sale, even when that person ultimately buys on a desktop.

Some of the most popular solutions for achieving cross-device and cross-channel tracking include data aggregation across sources and the use of identity graphs.

Added Versatility to Search Engines, Social, and E-Commerce Platforms Helps Guide Conversions

Since people use multiple start points when shopping for or researching products, online platforms have grown to accommodate a variety of cross-channel buyer movements. For example, a search-engine query can be an upper funnel activity for people who have just started buying. But specialized shopping ads, which enable direct purchases and shipping partnerships with major retailers, have transformed some search engine queries into an end destination.

Additionally, major e-commerce platforms like Amazon are often seen as the end journey for consumers who have intent to buy. But Amazon Spark aims to capture top-of-funnel audiences through content, community posts, and product profiles — all essentially creating a perpetual shopping journey where content and promotions commingle.

It’s worth noting that 37% of people still turn to retail websites when researching products. Retailers should thus consider how to improve the shopper experience through optimized product listing pages and engaging content that highlights product possibilities.

Effective Personalization Causes Consumers to Take E-Commerce and Retailer Recommendations to Heart

When retailers speak, consumers tend to listen — at least when it comes to personalized product recommendations. According to the NRF Report, over half of people have made a purchase based on a retailer’s digital recommendations over email or on product websites.

In fact, many younger people eagerly anticipate these types of recommendations for what gifts to buy. A recent survey found that 60% of shoppers under the age of 50 want personalized recommendations, while only 20% of those older than that say the same.

To power recommendations, a growing number of e-commerce companies use artificial intelligence. Predictive AI can harness sales data and marketing data related to consumer behaviors to predict items someone is likely to buy. A University of Toronto study found that Amazon’s AI could predict around 1 in 20 items someone was likely to buy next. Alibaba disclosed that personalized recommendations increased its customer conversions by 20% during an online shopping event earlier in the year.

Personalization could also lead to a simpler overall shopping experience on mobile. Since smartphone screens are small, offering a curated and personalized list of available products prevents endless scrolling through every last item in the inventory. More development in this area could boost the volume of purchases started and completed via mobile.

Technology Makes In-Store Shopping More Like Online Browsing for an Omnichannel Experience

Perhaps most interestingly, brick-and-mortar retailers are finding ways to implement personalization features into the physical shopping experience. For example, a phone app from one retailer offers recommendations to people shopping in-store as well as guidance to help people locate products.

These features bring the convenience of online browsing together with the immediacy of in-store shopping. They also create a more consistent omnichannel experience so that shoppers don’t have to give benefits up by choosing one channel over the other.

Omnichannel benefits can apply to retailers, too. By combining digital experiences with in-store browsing, shoppers leave traceable data footprints that can lead to insights. Research from Resolution expects technology like these in-store apps to combine with eye-tracking, geolocation data, and facial recognition technologies to create deeper, more granular data about in-store shopping behaviors. This information can be used to observe behavior trends and more accurately attribute marketing impressions to completed sales.

Conclusion: 2017 Was a Record Year for Holiday Shopping and for Consumer Data’s Role in it All

With so much retail activity going on, both in-store and online, huge brands will have access to more consumer purchase and behavior data than ever. Marketers can use this data to optimize their existing customer journey and add complexity to touchpoints in the ways shown above.

This data can inspire e-commerce businesses and physical retailers to drive conversions within nearly every possible touchpoint since each channel can facilitate buyer movement in a variety of ways.

Even as holiday gift-giving traditions remain constant, the journey the buyer takes to discover and purchase those items will be more complex and diverse than ever.

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