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Businesses are placing their resources into the online domain more than ever before as the festive season approaches, with digital battle lines being formed across web platforms. Even markets without traditional shopping spikes in December and November are beginning to tap into the festive mentality, with China’s Singles Day on November 11th becoming the world’s largest e-commerce event. As more of the global population comes online, increasingly through mobile platforms, the myriad of ways to interact with consumers continues to expand, with trends such as social commerce and “showrooming” likely to dominate the 2013 holiday season. However, bricks-and-mortar retailers without online, and particularly mobile, strategies will struggle to pull in the holiday spenders.
Global Internet Retailing Value and Internet Penetration: 2008-2013
Source: Euromonitor International from trade sources/national statistics
Note: 2013 percentage of the population online figure is forecast
Multiplatform Approach to Festive E-Commerce
The penetration and integration of e-commerce brands across social media, forums, blogging and micro-blogging mediums is set to reach a peak in the winter holiday season of 2013-2014, in a trend commonly referred to as social commerce. US sites such as Groupon and Living Social are splitting consumers into segments based on demand and demographics, such as mums, teenagers and gamers, letting them build their own shopping communities that divert traffic to the relevant e-commerce locales.
Meanwhile, the practice of “showrooming”, when consumers locate items at physical retail locations just to buy them later through a better deal online, will divert more purchases to online platforms in the holidays, especially as shoppers avoid long queues in peak shopping hours. For many, the pleasure in shopping is to find the best deal available, which is far less time consuming when done over the web. In the USA, both “showrooming” and social commerce will be major drivers of a projected record US$55.2 billion spend across all digital devices over the November-December 2013 holiday period, according to comScore.
An International Landscape Offers Hotspots of Online Demand
Although holiday-focused Internet retailing booms were traditionally an aspect of Western economies, largely due to their superior telecom connectivity, the e-commerce calendar is expanding across emerging markets, providing opportunities for international retailers. This is driving global Internet retailing value, which is set to reach US$638 billion in 2013.
The autumn/winter period offers the greatest spike in emerging market digital demand:
Firms outside of the massive Indian and Chinese markets are increasingly looking to cash in on these spending sprees and are competing against local providers. With large sections of populations still offline, major emerging markets will continue to see online uptake expansion, especially during popular holidays.
Mobility is Essential for Digital Competitiveness
Reaching consumers through mobile devices is becoming a vital component of a holiday e-commerce strategy. This practice is already relatively mainstream in developed economies where consumers use their smartphones regularly to purchase goods online, often referred to as “sit-back shopping”. However, the gulf between mobile phone and PC possession in emerging economies is far greater, meaning a mobile offering in such markets holds more significance. In China, for example, household mobile possession is expected at 92.9% in 2013 compared to only 37.6% for a broadband-enabled PC.
Physical stores or even online retailers without a mobile application for their shoppers will risk losing sales over the upcoming holidays. Much like the shoppers desperate to grab bargains on Black Friday, fierce online competition is seeing retailers utilise all resources in a dash for the digital holiday consumers.