- November 20, 2018

Holiday 2018: Digital Commerce Trends to Watch for This Season

Ian Essling
Director, Survey Innovation

Thanksgiving is almost here and beyond ample amounts of turkey and gravy and a time to give thanks, it means one thing to consumers: shopping deals. As we approach this year’s holiday retail season, what are some of the biggest online shopping trends we can expect to see?

New and Emerging Tech: What Will be This Year’s Smart Speaker?
Last holiday season saw the emergence of the smart speaker as a force in the connected home arena, and it instantly captured the attention of many consumers. While only 11% of households had a smart speaker in October 2017, this exploded to nearly 20% by February 2018, fueled largely by holiday purchases. Is there anything that can match that this year? Perhaps not to that dramatic of a degree, but there are several new tech advancements which could make some noise. One big trend to watch is the number of newer models of smart speakers that add screens. While this is just a step-change on last year’s big trend, Comscore's research on smart speakers has found that many consumers shy away from using smart speakers for purchases due to a lack of visual feedback. Currently, only 31% of smart speaker owners have ever used their device to make a purchase, and just 15% have done so in the past month. But if screens on smart speakers provide an enhanced level of comfort, we could see even more users embracing the technology to make purchases in the years to come. 

Virtual reality devices are another technology where we expect to see some movement this holiday season, albeit one with a more niche audience. Our quarterly State of Retail survey found that consumers have mixed opinions about how valuable VR devices will be in the future. While half felt that VR devices would be very valuable for gaming, a higher proportion saw VR as ‘not’ useful for retail purposes like clothes or furniture shopping. However, generational cohorts greatly impact this metric – while 31% of Millennials felt VR would be valuable for clothes shopping, only 17% of older respondents agreed that VR would be valuable for such use.

 

Virtual Reality

 

Consumers Will Continue to Embrace “Big Ticket” Purchases on Mobile
Purchases of “big ticket” items via mobile (an item of more than $500) hit an inflection point last year, as significantly more consumers were completing transactions for these items on mobile devices. Our data show that this trend has not only continued, it’s accelerated. Two or three years ago, few consumers were comfortable purchasing appliances, couches or other similar items on mobile phones. Now, we see this type of activity far more regularly. Mobile commerce growth has been outpacing desktop growth for years, but often lent itself more to categories that had an easier/shorter purchase cycle or lower dollar amount. Now, our data have shown that big-ticket items are a much more common occurrence on mobile. When you consider all the holiday deals on high-value electronics and other items, we expect big ticket transactions on mobile to ramp up even more.   

Can Anything Slow Down the Meteoric Rise of Food and Beverage Mobile Spending?
The short answer is no, probably not. While food isn’t the first thing most people think of when it comes to the typical holiday shopping list, it’s becoming increasingly common for consumers to use mobile to buy their holiday meals. We expect mobile purchases of food, beverage, baby supplies, and pet food to continue to soar in this holiday season. Year to date, mobile spending on CPG/food has grown over 115% in 2018 versus 2017, by far the highest growth category being on mobile. While grocery remains one of the smallest categories in terms of online vs offline share, retailers from Amazon to Walmart to Target and many others have made the category a focus of online efforts this past year. As consumers look for quicker ways to get all those holiday dinner supplies, buying on mobile will increasingly be a preferred choice.

Tablets as a Commerce Device Will Continue to Decline
It was only a few years ago that tablets were the big holiday story, but today tablets illustrate how quickly digital trends can shift. As smartphone screens get bigger and bigger, and smart speakers start to add screens, tablets may be relegated to fifth-wheel status with the modern connected household. Compared to just one year ago, smartphone share of online spending has increased from 15.6% to over 20%, while tablet share has moved only slightly, from 7.5% to 8.1%. This has been a consistent trend we’ve monitored, as larger smartphones are sapping spending from tablets. Clearly, the uniqueness of tablets in the purchase process, a larger screen to see items, is being minimized by larger phones and “phablets.” As retailers optimize their site experiences and mobile apps specifically for smartphones and on-the-go consumers, we expect this trend to continue.

Cyber Monday Will Still Be Strong, But Retailers Are Increasingly Trying to Pull Those Sales Forward
Two years ago, Cyber Monday became the first-ever $1 billion shopping day on mobile. While we still believe Cyber Monday is likely to be the biggest online spending day of the holiday season, last year mobile spending on both Thanksgiving and Black Friday grew at a higher rate than on Cyber Monday, signaling a shift to earlier holiday season spending, particularly on mobile. As retailers like Amazon are pushing a full week of Black Friday deals this year, such activities may pull spending forward and shift dollars even earlier in the holiday season.

This can have a ripple effect on online retail spending. The tried and true strategy of pushing huge online deals on Cyber Monday may end up reaching consumers who have already completed more of their shopping than in previous years, and retailers could lose out by starting sales too late. Conversely, retailers must also balance hitting the gas pedal too soon: our State of Retail survey results showed that as of early November, only 34% of online consumers had started their holiday shopping. It will be extremely interesting to watch the ebb and flow of deals and promotions this season, and to see what impact that has on the big online spending days of Thanksgiving, Black Friday, and Cyber Monday.

Digital Commerce Will Have Another Strong Holiday Season
Comscore’s official holiday prediction is a rise in online spending of +18-19% compared to 2017. Not only will overall digital commerce grow significantly, but we also expect mobile purchases (smartphone and tablet) to make up over 30% of online dollars spent in the holiday season. Large-screen smartphones have fueled an impressive run of mobile growth over the past year, and we see that trend accelerating in the holiday season. Ensuring a seamless and glitch-free mobile commerce experience continues to be top priority for retailers, as consumers are shifting more and more of their screen time (and spending) to their smartphones.

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