Photographer: Patrick T. Fallon/Bloomberg
I had a chance to read the Holiday Shopping Report put out by Criteo, global experts in on digital targeting and found that is contained some deep insights into people’s tendencies to shop in-store vs. online as the season progresses.
Criteo’s data, based on analyses of more than 260 million in-store and 66 million online transactions in the U.S. and Europe, the Middle East, and Africa (EMEA), finds clear patterns of tendencies for consumers to shop online vs. in stores. Essentially, there are four periods:
1) November prior to Black Friday
The Criteo report found that in both the U.S. and EMEA, in-store shopping accounts for a majority of sales. The figure for in store sales in both markets during this period is 60%, marking it clear that in-store shopping is very popular in both regions in spite of online dealers being offered early in the month. This very likely is attributable to many people simply enjoying shopping as part of the holiday season and likely includes a disproportionate number of people who wrap up their shopping early and do not procrastinate.
An interesting twist on holiday shopping in the U.S. this year is with Thanksgiving coming so late, the “traditional” holiday shopping season has been shortened. I asked Jaysen Gillespie, Criteo’s VP Head of Analytics and Data Science for his thoughts on the how the shortened season will affect retailers. He believes the impact will be significant: “The holiday season being shorter is definitely playing a role in online and in-store sales. Walmart, for example, rolled out promotions much earlier this year as a means to entice customers to start their holiday shopping earlier in the season. I think we will more brands doing the same over the coming weeks, and we’ll see online brands offering heavily discounted or free and speedy shipping in the days leading up to Black Friday.”
2) Black Friday and Cyber Monday
According to Criteo, in-store sales drop to 30% of sales on Black Friday and 56% in the EMEA. In the U.S., this very likely is a result of people associating Thanksgiving weekend with the beginning of the traditional shopping season. Surely, some consumers prefer to avoid crowded stores as well. Moreover, the heavy emphasis on online promotions, especially on Cyber Monday help kick a period where digital sales increase.
Gillespie emphasizes that during that for online having a mobile presence has become an industry standard stating: “Retailers need to build a mobile experience that drives engagement through constant feedback and enhanced imagery. Per our Holiday Research report, data from mobile analysis firm App Annie showed that in 2018, time spent in shopping apps on Android devices grew to 18 billion hours in 2018, up 45% from two years prior. It’s important marketers continue to keep mobile top of mind, as data from the same report shows that mobile shopping is expected to encompass 75% of global ecommerce transactions by 2021.”
3) Post-Cyber Monday Until Christmas
From Cyber Monday through early December, online sales remain high. However, as Christmas day comes closer, consumers are more likely to go back to stores. Indeed , in the week before Christmas, 73% of U.S. purchases and 87% of EMEA purchases are made in store. As the Criteo report notes, crunched consumers begin to fear that their online orders won’t be delivered on time. It also makes sense that those who procrastinate get to the point where they need a trip to “finish off” their shopping lists.
4) After Christmas
We usually think of the post-Christmas period as one of returns, which conjures up images of consumers waiting in line at a customer service desk of a brick and mortar store. With more consumers in stores for returns one might think that this meant a high relative proportion of sales. However, based on Criteo’s data, this is not the case. After Christmas, the report notes, people tend to prioritize spending time with their families and travelling. As a result, extra trips to stores are not in the cards.
The Future
Going forward, we can be pretty sure that the retail environment will continue to see some changes. Gillespie believes the future holds a mix of the old and the new. “For instance, I believe the omnichannel experience will continue to matter,” he says, “For a lot of retailers, the discovery of a product can take place in a store, where a consumer can see and touch the products. Yet, shoppers will also rely on digital channels for convenience. Moving forward, retailers that offer both will continue to have a significant advantage among competitors.
In terms of new trends Gillespie believes AI and chatbots will lead to more conversational commerce as messaging platforms become integrated with commerce, providing consumers with the convenience of shopping directly through their social apps. He also thinks that more brands will begin to experiment with AR and VR, allowing consumers to test out products virtually. Overall, it sounds like some holiday shoppers of the future will be exposed to innovation and should be in for some fun.
