For online retailers, the end of the year is the peak time for generating revenue. In 2019, in the US alone, ecommerce sales grew by 13.2%, to $137.6bn. So, by all predictions, 2020 should have been the biggest year for online retailers yet.
Of course, we don’t need to tell you that 2020 has been an utterly unpredictable year. A global pandemic leading to a record-breaking economic slowdown for many countries has changed the customer landscape dramatically. It’s also meant that this holiday period is ‘make-or-break’ for many online retailers. And it’s never been more critical to understand customer behaviour and spend during Q4 2020.
How is customer spend different this year?
Luckily, despite all the disruption 2020 has thrown our way, spending over the holiday period is set to stay stable – and even increase. According to Tinuiti research, the vast majority of customers plan to spend the same (or more) as last year. Take a look at some of the key stats for customer spending in Q4 2020:
Below, we look closer at some of the top insights from the report to help prepare you for the coming holiday season.
Customers planning to spend the same (or more) on holiday gifts
Overall, despite the disruption and uncertainty this year has brought, customers are still keen to celebrate the holidays and spend money during Q4 2020. This means the overwhelming majority (81.3%) plan to spend the same, or more, as last year. Since 2019 was the highest level in 3 years, be prepared to forget coronavirus for a while as you enjoy a bumper holiday season.
Early preparation is crucial
Customers are also planning to do their holiday shopping early this year. Just over a third (38%) of the customers surveyed said they would start shopping before Thanksgiving and 34.2% claiming that they will begin purchasing during ‘Cyber Weekend’ (Thanksgiving through to Cyber Monday). This means ensuring you’re fully prepared for the onslaught of customers in the weeks before the expected uptick is critical.
US retailers should also be aware that they will be competing for advertising space with election campaigns this year.
Support for black-owned businesses on the rise
Customer spend this year is also expected to be influenced by the unprecedented support of the Black Lives Matter movement. More than one in five shoppers (21%) say that they plan to shop at Black-owned businesses, or will patronise brands that have expressed support for the Black Lives Matter. This is most significant for Gen Z shoppers, where 40% report that the movement will impact their spending, and 27.9% say they will specifically shop with more or only Black-owned businesses.
Fully understanding your data and customers has never been more important
The holiday period is always a time that puts even the most-prepared online retailers under pressure. There’s just so many unexpected issues that could throw off your digital performance, from technical issues on the website causing people to abandon shopping carts to price glitches undermining your bottom line. That’s why it’s so important to have a full understanding and awareness of your data during this period.
However, the huge amounts of data that come through your business day-in, day-out is near impossible for any human to manually monitor. Fortunately, when it comes to analysing vast swathes of data, this is where AI and machine learning flourishes. The technology is able to autonomously monitor all of an online retailers’ data, alerting them to the data fluctuations they really need to know about, in real time. It’s also incredibly accurate and can run through data 24/7, so it can keep track of all your ecommerce KPIs even better than a whole team of data analysts could. During the upcoming holiday period, it’s a complete gamechanger.
Try out our machine learning KPI tracking tool, Millimetric, for free today and see how much easier it makes the holiday period.