Christmas – What Will Online Spend Be This Year (2016)?

Let’s face it – these days, Christmas really starts in September. By the time October rolls around, it is estimated that as many as 40% of UK consumers have already begun their Christmas shopping.

During the three months leading up to Christmas, there is an ever increasing number of ‘special shopping’ days – in particular with the advent of Black Friday, and Cyber Monday in late November. christmas shoppingBut there are also many other promotional events, such as, “Small Business Saturday” and “Free Shipping Day”, which means that the last quarter of the year has now become absolutely critical to the bottom line results of every online retailer.

In 2015, the total online retail spend for the year was £114 billion, with £24 billion of this spent over the Christmas period. Sales during November and December showed a 12% growth over 2014. It is estimated that this year there will be a further 11% growth in the online retail market with a total spend for the year of around £126 billion.

The UK retail online market, which has its peak during the Christmas period, is moving inexorably towards the point when over 50% of all e-commerce transactions will be made using multiple mobile devices.

Are Your Ready For Christmas 2016?

So now is the time for the major players to re-examine their systems and strategies and ensure they are in the best possible shape to take full competitive advantage of the most important trading period of the year.

Firstly some important facts to consider:

  • 27% of retail sales now take place online.
  • 77% of internet users, or around 43 million people, accessed the Internet to make a purchase online in 2015.
  • In 2015, the average value of an order was £79.
  • There are 74.92 million mobile connections in the UK, which exceeds the entire UK population by some 15%.
  • Sales via mobiles in 2015 are estimated to be over £21 billion. Tablets continued to be the major device for mobile retail sales (“m-retail sales”), but an increasing number of purchases (4 in 10) were made on smartphones, as their screens became larger, facilitating access to retailers’ websites and apps.
  • In 2015, Christmas sales made by smartphones and tablets were up 55% on 2014 and 37% of online sales were completed on a mobile device – with an estimated 8.9% of total retail sales.
  • It is estimated that 40% of the major online retailers do not have a “mobile site”, (App), and less than 10% have a truly responsive website that properly engages their customers.
  • Black Friday week in 2015 generated £4.3 billion in sales, a 44% increase over the same period in 2014, making it the busiest period of Christmas. What became apparent in 2015 was that Black Friday made a dramatic shift from being a High Street event to an online event with discounting continuing for the entire week. It also revealed that sales through mobiles were the primary source.
  • The most popular product categories bought online are: clothing, books and home electronics; the preferred ways to pay are : Credit/Debit card (49%), Paypal or similar (40%) and Direct Bank Payment (5%); and the top three delivery methods are: delivery to home, collect instore, (increasingly popular due to the ‘click-and-collect’ phenomenon), and pick-up point.

And now, six strategies to think about and plan as Christmas fast approaches.

  1. With more people than ever starting to plan their Christmas shopping in September, it is essential to start building meaningful relationships with those who may be seeking advice and inspiration on how to pep up their Christmas shopping lists. Your customers want to be informed about products as well as where and what to buy, and the more information you can provide, the more likely they are to buy from you when the time comes.
  1. Review, and where necessary, redesign your online webpages and ensure they are mobile-friendly for the millions who will be using mobile devices as their main Christmas buying device.

It has been estimated that mobile users are 20% more likely to complete their purchase than users of other devices. So it is essential that none of your potential customers will be deterred by having to deal with web pages that may be difficult to access, to navigate, to understand or to finalise a transaction. In short, your website needs to be optimised for mobile use, or you must provide a separate mobile app that does the job in a friendly and creative manner.

  1. Plan ahead for Black Friday weekend and beyond – indeed for the whole Christmas period. Determine the dates/events and the levels of discounting you plan to offer, alert your main suppliers and do deals with them. Gone are the days when you can afford to slap blanket discounts across your product lines. Keep a close watch on the discounting policies of your competitors and try to match or beat them whenever possible.
  1. Ensure that your systems will be in good shape to ‘take the strain’ – especially during the feverish activities of the Black Friday weekend. The worst possible scenario is that your system crashes, or your customers are left hanging.

While the idea of putting online customers in queues is preferable to a total crash, it still should be avoided whenever possible, as it leads to bad customer experience. The details are likely to be immediately shared on social media.

  1. Don’t get left behind in the battle for hearts and minds. Everyone understands the race to have the top Christmas video ad, but it is more than just a competition. There is a whole new world out there of “inclusive, soft and feely” advertising.

Most of the successful online retailers are putting their Christmas videos online ever earlier with high quality content that will persuade consumers watch and discuss the ads on social media. This will ultimately play a major part in their decision to buy a particular product.

The number of people viewing Christmas ads on YouTube increases 60%, year on year. Consumers like to see quality videos and they will identify with the brands advertised. There is an increasing trend to make online ads longer (average 2.8 mins), that are not just regurgitated versions of TV ads.

  1. Ensure your delivery/collection options are working well, and in particular, ensure that any guarantees on delivery dates are kept. Failure to do this will result in adverse publicity.

So there you have it, a few facts, some of which may come as a bit of a surprise, and a few solutions – both of which may help you make this the best Christmas ever for your online sales.

Happy Christmas.