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Digital This Holiday Season

How are companies dealing with the challenges it brings?

16Nov

The Thanksgiving Weekend sales have become one of the most highly anticipated events of the year for retailers and consumers alike. Shops have also begun opening during the evening of Thanksgiving day as they try to attract shoppers into their Black Friday sales even earlier. Many stores, such as Macy’s and Target, now open at 6pm, while JC Penney has defied a petition urging it to stay closed by deciding to open at 3pm this year - two hours earlier than last year.

For many, stores opening on Thanksgiving is an encroachment on a day that they believe should be reserved for family. Bringing forward the Black Friday deals also extends what can often be an unedifying spectacle, as people risk life and limb in the crush for bargain priced consumer goods.

Increasingly, however, people looking to avoid the barbarian hoards by going online to pick up holiday deals. Many people simply don’t want to leave their family on Thanksgiving, with an ICSC survey finding that just 12% of shoppers even want to go to stores, though Accenture found that half of consumers plan to shop on Thanksgiving, with 40% saying they'll go to a store and 43% will shop online.

Adobe Digital Index has estimated that online shopping in the U.S. will rise to $1.6 billion for the day, an 18% increase on last year. This has been driven by a rise in the use of mobile devices for purchases, up 12% on last year, now accounting for 29% of online sales. Black Friday, though commonly associated with brick-and-mortar scores, will grab $2.7 billion from online shoppers, an increase of 15%, while Cyber Monday, the day most associated with digital deals, will see $3 billion in online sales, 12% more than last year.

Adobe's predictive commerce model is exhaustive, using analysis of aggregated data from more than 1 trillion visits to 4,500 U.S. retail websites over eight years. The company claims to have predicted consumer online spending for Thanksgiving and Cyber Monday within 2% in prior years, and offers a variety of other insights about shoppers’ habits that can be used for targeted marketing. For instance, iPhone users are 23% more likely to make actual purchases than Android users when it comes to mobile shopping.

Retailers are adapting to the change in people’s shopping habits by focusing their efforts on digital marketing. Target, for example, have invested heavily in digital marketing campaigns this year. They will put out 12 commercials in 60-second and 30-second iterations, which began airing on TV on November 4. Target is dedicating a total of 61% of its media spending to digital, up from 51% last year. They are also determined to use the Thanksgiving sales not just as a one off revenue boost, but as a jump-off to drive sales throughout the seasonal period leading up to Christmas. They will have 10 days of deals Nov. 22 through December 1, offering blanket discounts on entire categories each day. Enthusiasm for the big sales does appear to be waning, with more than half of consumers telling Deloitte's holiday survey of more than 4,000 people that they rely less on Black Friday than they used to. The move to a more even distribution of sales is a new challenge for companies, and one they will have to adapt to fast.

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