Princeton, NJ, August 17, 2017 – Following in its tradition of accurately predicting the holiday shopping season, retail search marketing company NetElixir has released its 2017 Holiday Forecasts report. NetElixir predicts a slower rate of ecommerce growth for the 2017 holiday shopping season of 10%, down from 11% last year. NetElixir attributes these findings to:
The Amazon factor: Amazon’s growing user base and the adoption of new devices like Alexa have contributed to the increasing pervasiveness of the ecommerce platform this year. Consumers also purchased early Christmas presents during Amazon’s Prime Day in July.
Lower prices online: The shift of ecommerce sales to marketplaces does not lead to overall incremental ecommerce growth for merchants. This is because discounts and lower prices are more prevalent on online marketplaces.
Macro-economic factors: This year, we have seen an overall sales slowdown and retail drop with more store closings. In H1 2017, we compared this year’s revenues, orders and average order value (AOV) for our clients to last year’s. We saw a significant drop for all of these with revenues down 10%, orders down 9% and AOV down 1%.
The report also forecasts the impact that Amazon will have on this holiday season. NetElixir projects that Amazon will take 34% of holiday sales this year, up from 30% in 2016. This percentage equates to $28.5 billion dollars in sales this year. Compared to $23 billion Amazon made in holiday sales last year, this year will mean an increase of $5.5 billion in holiday sales for Amazon. All other retailers combined are projected to make an additional $2.5 billion in holiday ecommerce sales this year. NetElixir’s report also projects that purchases made on voice-enabled devices (mostly through Amazon’s Alexa) will experience 1.5-2x increase this year.
Other key factors impacting this holiday season are the continued reliance on mobile shopping. NetElixir projects that mobile shopping will account for 35% of purchases. Consumers will also be incentivized to shop online due to better integrated fulfilment. NetElixir predicts that despite a longer than usual holiday shopping period between Thanksgiving and Christmas, consumers will still wait till the last minute (Dec. 20 – 22) to purchase gifts. One day shipping as well as order online and pick-up in-store options will play an important role for customers looking for convenience.
“With Amazon continuing to play a huge role in ecommerce consolidation, retailers need to prioritize ecommerce in order to stay competitive during the holiday shopping season,” said Udayan Bose, founder and CEO of NetElixir. “There are also some expected consumer behaviors that retailers can leverage, like the higher percentage of consumers who will make last-minute purchases before Christmas. We also found that post-Christmas purchases, otherwise known as “me buys,” are going to experience a substantial increase this year, giving retailers an opportunity to reap some of their losses from the holiday period.”
Methodology
NetElixir’s 2017 Holiday Forecasts was compiled through an analysis of key retail search metrics & trends for NetElixir’s mid-size and large customer base with revenues of just under $400 million for ecommerce holiday sales. NetElixir’s Retail Intelligence group applied sophisticated forecasting models on the aggregated data, investigating specific areas like prior-key event ecommerce sales, market share tracking for Amazon vs. rest of retail ecommerce, variation in basket size over time and other key factors. NetElixir considered 450 million sessions across five main verticals including gourmet food, apparel and shoes, home & décor, gifting and consumer electronics. NetElixir has been aggregating this data since August 2008.
About NetElixir
NetElixir is a rapidly growing search marketing agency with over 12 years of experience working with retailers on their search marketing needs. By helping retailers to decode what makes customers click, NetElixir is helping these businesses succeed online. Its analytical team of industry experts, technology builders and business strategists drive exceptional results and uncover actionable customer insights through a combination of proprietary paid search optimization technology, strategic growth models and expert campaign management services. The company’s LXRMarketplace hub is a destination for small businesses and solo entrepreneurs in need of free or low cost search engine marketing tools. NetElixir is headquartered in Princeton, NJ with wholly owned subsidiary offices in London and Hyderabad, India. For more information, please visit www.NetElixir.com.
Ellie Dautner, a finance postgraduate from the University of San Diego, is an expert journalist in fintech and mobile payment technology. She specializes in writing about fintech, mobile payments, startup funding, and acquisitions.