HOLIDAY SHOPPING GOES DIGITAL: SMARTPHONES AND TABLETS, DAILY DEALS, PHOTOSHARING SITES AND EMAIL DRIVING ONLINE SALES

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Online shopping will break more records in 2012. E-commerce is quickly catching up to brick-and-mortar shopping and the importance of digital marketing has never been more important for retailers. The infographic below shows online shopping predictions for Black Friday and Cyber Monday.

Thanksgiving Day Weekend Shopping

• 226 million consumers visited stores and shopped online, up from 212 million in 2012.
• The average shopper spent $398.62
• In 2011 52.4 billion was spent, an increase of 16% from 2010 when 45 billion was spent shopping.

Black Friday

• Shoppers made 9.8% of their online purchases from mobile devices, up from 3.2% in 2010.
• Mobile traffic increased 14.3% in 2011 compared to 5.6% in 2010.
• Paid search increased 128%, making Black Friday 2011 the most ever spent on paid search.
• From 2010 to 2011 Black Friday sales were up 24.3%
• Online and Offline sales grew 39.3% at 11.4 billion, with 17.37% of shoppers visiting retailers' sites.

Cyber Monday

• From 2010 to 2011, Cyber Monday sales were up 33%.
• 10.8% used a mobile device to visit a retailer's site on Cyber Monday, up from 3.9% in 2010.
• Cyber Monday 2011 was the heaviest online shopping day in history at 1.25 billion in sales.
• Half of the dollars spent online at U.S. websites originated from work computers.
• 2011 Mobile sales were up reaching 6.6% on Cyber Monday vs. 2.3% in 2010.
• Social discussions leading up to Cyber Monday increased 115% YoY.

2012 Online and Mobile Shopping Predictions

• 16% of consumers will shop on mobile devices in 2012, up from 13% in 2011.
• Web shoppers who plan to visit stores will drop from 48% to 46%.
• The average consumer who shops online will make 6% of their holiday purchases from a mobile phone. 62% online and 32% in stores.

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COMMENTARY:   After a year of technical innovations, most notably the emergence and rapid adoption of smartphone and tablet technology, the shopper-seller relationship has changed dramatically. In this article, Rakuten, one of the world’s top 3 E-commerce and Internet service companies by revenue, who recently acquired eBook company Kobo and Play.com in the UK, announces its industry predictions for 2012.

In the year ahead, cutting edge mobile devices, worldwide broadband penetration and innovative social shopping services will continue to open up global markets, providing huge growth opportunities for merchants large and small, and giving consumers unparalleled levels of choice.

The predictions cover the entire E-commerce market and discuss 6 key trends for 2012, including:

1. Tablet-commerce and Mobile-commerce retail therapy
2. Bricks and mortar in the cloud
3. Shopping with your social network
4. Borderless shopping communities
5. Flexible, local shipping models
6. Online shopping gets personal

In a year where international retail markets floundered E-commerce displayed resilient growth, with reports out from research house ComScore at the end of 2011 citing double digit growth in the US festive period.

Over the last 12 months the E-commerce sector has rallied against challenging economic conditions and driven innovation in business and shopping models, thanks in part to the unabated rise of the e-marketplace entrepreneur. At Rakuten alone in 2011 we attracted over one thousand new sellers and grew the total value of the marketplace to over $13 billion.

A flurry of technical innovations, most notably the emergence and rapid adoption of Smartphone and Tablet technology, has transformed the shopper seller relationship. Fuelled by mobile technology, E-commerce growth shows no sign of abating. JP Morgan estimates that global E-commerce revenue will hit $963 billion next year.

Rakuten considers six key trends which will fuel E-commerce growth in 2012:

1. T-Commerce and M-Commerce retail therapy – In 2011 web enabled mobile devices transformed E-commerce, opening up a new 24/7 channel to the consumer and creating innovative new ways to engage them, from QR codes to location based offers. In 2012 m-commerce will continue to gather momentum, but it is T-commerce that’s particularly exciting. The rich functionality of the tablet shifts the traditionally transactional and bargain hunting online experience into a virtual store experience, making the web an almost tactile experience. For example, Rakuten’s BuyTV in the US and Rakuten SuperTV in Japan bring video reviews to enrich the tablet shopping experience. Better still, mobile commerce is not exclusively for big brands with big budgets. Better still, mobile commerce is not exclusively for big brands with big budgets. Thanks to affiliate services and marketplaces like Rakuten, merchants large and small can harness the mobile channel without incurring heavy infrastructure costs. Gartner estimates that by 2013, smart mobile web devices will overtake the total number of PC’s in use, exceeding 1.8 billion. With 1.8 billion consumers just a click away this too big an opportunity for retailers to miss. 
2. Bricks and mortar in the cloud – The boundaries between online and offline worlds are becoming increasingly blurred, as retailers fuse their digital and real-world offerings. Barcode scanning services such as ShopSavvy help users find the best deal, by allowing them to scan the barcode and search for better offers online. However, the challenge with these applications is they fail to reward the store whose display instigated the purchase. To avoid cannibalising the high-street we believe a new system must emerge in 2012 that rewards offline and online ecosystems.
3. Shopping with your social network– Getting a second opinion before committing to a purchase is nothing new, but now rather than taking a friend shopping you can take your entire social network with you. Retailers are becoming increasingly aware of the power of “the fan” and social will form an integral part of the E-commerce evolution in 2012. Data released in July by Hitwise indicated that 1 Facebook fan was equal to 20 additional visits to a retail website in the course of a year. Retailers are now using social not just for brand awareness, but for product development and customer service too. Rakuten’s ShopTogether feature lets all merchants capitalise on social service by enabling Rakuten marketplace users to invite friends to view products and live chat whilst looking at the product page.
4. Borderless shopping communities – 2012 will see the rise of the local global e-marketplace. In 2012, international marketplace models will provide sellers of all sizes around the world with the opportunity to expand their operations internationally, without the cost intensive outlay traditionally associated with establishing local delivery models, storage facilities etc. Sellers will be able to dabble in international shopping communities and dedicate resources based on real world demand. This will open up opportunities with burgeoning markets, such as China, India and Brazil. In late 2011 Rakuten surveyed international interest in shopping globally online and the results revealed that consumers are open to borderless shopping. Brazil is leading the global e-shopping charge with 81 per cent of consumers keen to shop in different markets online, followed by Indonesia (77%), Thailand (74%), China (69%) and Spain (66%).
5. Flexible, Local shipping models -According to a report by Forrester in January 2011, shipping issues were one of the most common reasons for cart abandonment in Europe. It’s true that the internet has created a global marketplace, but local market shopping preferences must be taken into account. In Indonesia for example, locals are reluctant to pay online, to combat this Rakuten set up a shipping model, of local bike couriers, who collected payment on arrival. In 2012, flexible shopping models will be vital for growth, as evidenced by the growing popularity of the click & collect phenomenon, which accounted for 10.4% of all E-commerce sales in the UK this Christmas according to the IMRG.
6. Online shopping gets personal – The old adage “Information is power” takes on new impetus in 2012 as retailers seek to capture the fickle attention spans of information savvy internet shoppers. Gone are the days, when retailers tracked consumer behaviour based on loyalty points. Today’s online retailers can acquire huge volumes of data on both their potential and existing customers based on user browsing habits alone. In 2012 data exchange between retailers and social networks will begin to provide solid business models for social platforms and offer new insights into the psyche of the shopper. What matters most to retailers however is how their marketing teams translate this wealth of data into meaningful and timely communications with customers. The web generation is already jaded from a surfeit of push advertising, to truly engage consumers in 2012 and beyond, retailers must learn how to harness user specific data to provide timely, personalized and relevant communications.

Commenting on the E-commerce industry in 2012, Adam Stewart, Marketing Director, Rakuten’s Play.com said: “In 2011 we barely scraped the surface of what’s possible with online retail. We are on the cusp of creating an experience-rich, 24/7 international shopping community. In the year ahead, cutting edge mobile devices, worldwide mobile and broadband penetration and innovative social shopping services will open up global markets, providing huge growth opportunities for merchants large and small and unparalleled consumer choice.”

eMarketer's "Online Holiday Shopping Forecast and Trends" webinar held on September 20, 2012 provides the latest digital shopping forecast and trends.   Some of the highlights of the webinar are as follows:  

• Online sales during the month of November and December 2012 will hit $54.5 billion, up 16.8% from the same period in 2011.
• Online sales for the year ending 2012 will reach $224 billion, up 15.4% from 2011.
• Four new trends will fuel online sales growth in 2012:
  • Daily deals - Includes offerings from discount offerings from major retailers and offerings from daily deal sites like Groupon and LivingSocial.  
    • Daily deals are often used by retailers to reduce their inventories by offering discounts of 30% to 50%.  
    • Retailers use daily deals to catch the attention of consumers.   
    • Daily deals provide retailers with permission to offer daily deals.  
    • Popular daiy deals often lead to powerful word-of-mouth on social networks.
  • Smartphone and tablet online shopping.
    • Smartphones are used to satisfy immediate shopping needs.  Smartphones offer a convenient way to quickly compare prices and check for product reviews.  46% of consumers using a smartphone to conduct product and retailer research resulted in an instore purhase.
    • Mobile device purchases could comprise up to 20% of total online sales for the year 2012
    • Tablets are the preferred mobile device for making online holiday purhases. For the year 2011, 48.6% of total mobile devices purchases were made using tablets, while smartphones were only used 14.4% of the time.
    • Tablet shoppers outspent smartphone and traditional onine shoppers.  Tablet consumers spent $129 during Back Friday, compared to only $91 for smartphone shoppers.  Tablet shoppers spent $123 compared to only $80 for smartphone shoppers during the year 2011. 
    • Use of comparison-shopping mobile apps is exploding.  55% of consumers use their smartphones to compare prices. 
    • Tablet are stretching the online shopping day beyond regular business hours.
  • Photosharing sites.
    • Pinterest (30%) has emerged as a serious contendor to Facebook (54%) in driving consumers to apparel sites.
  • Email and search.
    • Email is the preferred vehicle for online consumers to receive holiday promotions.  Direct mail came in second, while Facebook ranked third.
    • Emails will included more sophisticated "triggered" emails that allow consumers to make their purchase by clicking a BUY button right on the email.
    • Google shopping cart makes its debut during the 2012 Christmas shopping season.
  • Early and Late Christmas Shopping. 
    • Consumers will do more shopping earlier and later during the 2012 Christmas shopping season.

eMarketer Webinar: Online Holiday Shopping Forecast and Trends from eMarketer

I have a feeling that many consumers will be doing their shopping earlier during the 2012 shopping season because of the possibility of the White House and Congress unable to agree on a Fiscal year 2012 budget and forcing the U.S. economy to go over the Fiscal Cliff as Christmas approaches.  My logic:  They will buy now instead of later while they have the money, especially if we do go over the fiscal cliff, the Bush tax cuts finally end at the end of 2012, and everybody's tax rates go up beginning in 2013.  

UPDATE:  U.S. retail sales hit $59.1 billion during the Thanksgiving weekend, up 13% from the same four-day period last year, according to NRF, with 28% of the weekend's shoppers hitting stores on Thanksgiving night.  NRF CEO Matthew Shay said. 

“I think the only way to describe the Thanksgiving openings is to call it a huge win.  [Shopping] has really become an extension of the day’s festivities.”

Courtesy of an article dated November 24, 2012 appearing in Social Media Today and an article dated December 1, 2012 appearing in Digital Strategy Consulting and an article dated September 20, 2012 appearing in eMarketer