How Holidays Influence e-commerce

This article plans to analyze both e-commerce and offline (retail) sales volume trends so that the key findings underlined here would positively influence your online store.

We have a year full of red letter days. Some have more social meaning than others; few are political, and a couple of them have a strong religious significance. Each of these events carefully indicates a certain aspect of our socio-cultural or spiritual lives.

If we were to look closer, beyond the attached financial component, these celebrations had been subtly emphasizing on key character traits and mass behaviors, that as nations we were always eager to demonstrate.

Unfortunately, though, we cannot ignore the economics of anything nowadays, let alone annual festivities. So, it seems that time and time again we experience similar stories only to learn the exact same lesson – that there’s a consumerist strategy silvery (under)lining holidays throughout the year.

e-commerce Key Learning Points for the Busy Reader

• e-commerce has caused SMEs to move online and go mobile. A report by Statista says that 40 percent of worldwide internet users have shopped online at least once via desktop, mobile, tablet or any other devices. This predicts the total number of online consumers over 1 billion which is rising every year. Ergo, make sure your online shop is responsive!
• The holiday season returns 30-50% more sales than the rest of the year. With carefully designed marketing campaigns, these seasonal events could positively impact your bottom line.
• Online shoppers demand 3Fs when it comes to their shopping experience: Free & Fast Delivery, Free & Easy Returns, and Formidable Discounts. Therefore, make sure your marketing tactics, as well as your pricing strategy, are aligned with these expectations.

America – the land of e-commerce opportunities

Whether we’re doing it on or offline, we spend each holiday differently; and each holiday, we spend differently. Get it? *Wink.

According to what we’re celebrating that month, retail sales register a predictable yo-yo trajectory. For example, we spend less in the first half of the year partially because we’re still recovering from last year’s budget allocation, but also because of social segmentation. Super Bowl, Mother’s Day, Father’s Day, April’s Fool, Memorial Day are all festivities aiming smaller and specific civil fragments, whereas Independence Day, Halloween, Thanksgiving Day or Christmas address a broader audience.

We also differentiate accordingly to the holiday’s specificity. For instance, in January and February, we usually focus on everything related to sports, but somewhat directed more towards services rather than commodities. This happens due to the fact that people want to shed those holiday extra pounds off, only to put them back during summer when celebrating Independence and Memorial Days during which we focus on abundant meals. On the same note, flower, candy and jewelry sales will go up on Valentine’s Day and Mother’s Day; and sales in the stationery sector will increase during autumn when we pursue the Back to School campaign.

Below, you can analyze a calendar of the most important US holidays with an emphasis on monthly, quarterly and annually retail revenues.

Source: Census

As you can depict from the table above, e-commerce is the only constant there. Its weight in the total retail sales revenue grows by quarter – slowly, but solidly.

According to SpendManagementExperts, the share of online shopping in the total retail sales revenue has increased from 6.5% in 2014 to 7.4% in 2015. At an even deeper analysis, in their e-commerce Pulse study, Custora.com splits the online purchasing numbers into desktop, tablet and smartphone as shown in the mini-table below.

Source: e-commerce Pulse by Custora

This shows how, during the Christmas season, M-Commerce has gained ground in the entire sphere of e-commerce. It seems that we’re integrating our mobiles more and more in our daily life and that shapes the way we buy, as well.

The Inflection Point – One out of control Black Friday sale!

As we can observe from all year round expenditure numbers, when we say Holiday Season, we mostly refer to the Christmas Creep. Or the Golden Quarter as others name it. Or the Silly Season as some Australians refer to it, for they have found the average Aussie allocates shopping 3 times more his income in this time of the year.

The length of the holiday season differs from region to region. For instance, in the United States, Christmas shopping season starts mid-October (right before the Black Friday which is a huge event there, but just starting to gain ground in Eastern Europe). Canada kicks off timidly right after Halloween (October 31st), but marketers up their game after Remembrance Day (November 11th). Australians and Europeans, on the other hand, have a shorter season, commencing mid-November. It all depends on cultural customs and social norms.

The Holiday Season returns 30-50% more sales than the rest of the year. It’s a rat race! It seems that we work the entire year so that we could give it all away in the last two months, and we repeat it the next year; and the one after that.

This year, though, the United States have witnessed a major inflection point that will, most probably, influence the collective mindset. Fortune.com notes that it was the first time in history when during the Thanksgiving and Black Friday weekend, online shopping registered a higher rate ($103 million) than in-store purchases ($102 million).

As a general direction, it seems that over the past few years we’ve been shifting from commodities to experiences. You can see that from the way spirituality movements shape our lives today to the types of gifts we acquire.

In terms of what satisfies our needs, we’re searching more and more for meaning, processes and making memories rather than goods which fulfill our necessities on a shorter term. As a result, we’re reallocating time from individual, offline shopping experiences to socializing and family events. Hence the e-commerce spree – it saves us time to gather and it allows us to be spontaneous and enjoy our 21st-century mobility.

In-store sales still generate 90% of all retail sales, but all these digitized trends are on the go, expanding yearly. For instance, M-Commerce sales grow 3 times faster than e-commerce ever had.

Even legacy retailers such as Wal-Mart or Gap use mobile strategies to catch up with their younger competitors’ online marketing. We can easily slice this “procurement process” (fancy term, here) in research, comparison and purchase and it becomes safe to state that E & M business is heavily covering the first two bases. But we developed a culture for shopping offline in years, so we’re not just going to flip a switch one day and turn everything around.

Easter Trends in e-commerce

So, it almost goes the same way on Easter, but on a lower scale and with a slightly different focus.

According to the National Retail Federation, 21.4% of American customers declared they will go online for Easter shopping this year, in comparison to the 18.8% of last year. They are expected to spend $17.3 billion.

If during Christmas we’re spending mainly on gifts, food and decorations in this order, Easter is about food, clothing and gifts. Because of the religious approach, it seems that Christmas is more festive. The celebration of Christ’s birth is more cheerful, so we tend to share the joy with friends and family.

On the other side, Easter is a more serious remembrance of Christ’s journey towards His final sacrifice. In this context, we’re more focused on the sad, inner journey and our gathering becomes about mourning rather than celebrating. But, essentially, Easter is about being happy that Jesus rose rather than sad that He died, right?

From another angle, according to IBISWorld – the global business intelligence website – in 2014, the largest part of the Australian budget went primarily on traveling, food and chocolate. Aussies are more centered on the neutral Easter Bunny, hence their purchase choices.

Isn’t it a bit funny and impressive at the same time how much our shopping behavior reflects our cultural beliefs?

The Romanian e-commerce Way

A country which neatly follows the trend we have been describing, especially during Holiday Seasons, is Romania. In their study, GPeC states that out of 11 million internet users approximately 61% have shopped online at least once.

The smartphone market is in full growth process here. Thus, over 50% of the 2015 key online shops traffic has been mobile generated.

There are 5000 active online shops in Romania.

To get a glimpse of the pace we’re going here: if back in 2014, Black Friday generated a 75 million EUR sales figure, in 2015 the campaign almost hit the hundred.

For 2016, we’re expecting online Easter shopping to grow, as well, in comparison to last year’s level. Experts also predict mobile commerce to keep its ascension pace steady.

From their E-Shop purchasing experience, Romanians want 3Fs:

• Free and Fast delivery,
• Free and easy returns, and
• Formidable discounts.

Therefore, if you can deliver all of these over a technical bearing of increased traffic and a facile customer service process, you’re basically set and equipped for this season.

In the end, holidays seem to be a bit tricky at the beginning. In order to be financially successful, both personally and as a digitized vendor, you need to be telling your money where to go and not the other way around.