Ho ho ho! Retailers rejoice: ’tis the season to be merry. Those in retail know how critical seasonal sales are. But just how critical?
Retailers care a lot about the holidays for a reason – holiday months make up almost 20 percent of their total annual sales.
After a turbulent start to 2014, the NRF announced it expects sales in November and December (excluding autos, gas and restaurant sales) to increase a healthy 4 percent to $617 billion, which is higher than 2013’s actual 3 percent increase during that same time frame. So what is driving growth in sales this season?
IBM’s real-time analytics captured some preliminary insights on holiday sales
Breakdown of holiday sales analytics:
What are the trends that propel these sales growth? All statistics point toward four key trends. Let’s dive straight into the drivers that are pushing these trends forward (all data from IBM 2014 Black Friday Report):
1. Consumers love to cash-in on online bargains: In 2014, the average order value on Thanksgiving was $125, a decrease of nearly 2 percent over the same period in 2013, and Black Friday was $129, down by 4 percent. This trend may indicate that shoppers are becoming digitally savvy in how they use online coupons and rebates to obtain the best bargains. It’s time to capitalize on this trend by creating more bargain incentives and a user experience that makes it easy for consumers to save money.
2. Consumers browse with smartphones, buy with tablets: When was the last time you made a purchase on your tablet? Did you check the items out on your phone beforehand? Smartphones drove nearly 35 percent of total online traffic for Black Friday, nearly double that of tablets (which accounted for nearly 15 percent of all online traffic). However, tablets are winning the shopping war. Tablet sales accounted for 16 percent of online sales, more than 35 percent than smartphones, which only accounted for almost 12 percent of total online sales. User experience is key; creating consistent brand experiences across channels should be a top priority.
3. Apple iOS trumps Google Android: Apple leads the way in average order value, online traffic, and online sales. Apple consumers spend an average $122 per order compared to $98 for Google Android users, and accounted for 34 percent of total online sales, which is more than double that of Google Android.
4. Facebook is a better referral engine than Pinterest: Facebook referrals converted sales at twice the rate of Pinterest. Remember this when allocating resources for your social engagement strategy.
So what’s the key takeaway for retailers as the next round of holiday buying approaches? Retailers who have a clear understanding of what drives sales figures are better informed and better equipped to make the right decisions for the most impact. According to the State of Marketing study, which surveyed more than 500 marketing professionals worldwide, marketers who act on insights systematically belong to organizations who own 1.8x gross profit, 3.4x net income, and 2.4x stock price.
Whether it means allocating adequate resources for the right channel mix, optimizing effective strategies to engage clients, or crafting effective social strategies, retailers who pay attention to these insights can dramatically improve their performance. This holiday season is an optimistic one for retailers: it is the season to be merry.
- When data doesn’t agree with your gut – from the IBMCAI Marketing Science study
- Customer experience: Getting beyond table stakes – from the IBMCAI State of Marketing study
- Who wins in an omni-channel world? You – from the IBMCAI Retail Merchant study
- IBM ExperienceOne Benchmark Live – real-time holiday shopping analytics
- IBM Digital Analytics Benchmark Reports – for key 2014 holiday shopping periods
- Follow @IBMExpOne for the latest charts and data