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For online retailers Q4 is historically the biggest revenue driver of the year. However, 2020 has been anything but traditional.That has made predicting ecommerce spending for this period difficult and widely varied.
Previously, there’s been a glut of forecasts around holiday spending online, which includes mega shopping days Black Friday, Cyber Monday. Each year these milestone dates have hit new record-setting levels.
But this year projections were revised as the result of ever-shifting rules, restrictions and safety concerns resulting from the pandemic. Changing consumer shopping behavior based on closures and stay-at-home orders has driven more shoppers online since March. As consumers have become more accustomed to ordering online (whether for delivery or contactless curbside pick-up) market prognosticators are revising their online spending forecasts for Q4.
Market research firm, eMarketer revised its February 2020 forecast, which projected modest growth of 2.8% to $5.621 trillion in total US retail sales, New numbers expect there to be a 10.5% decline in total US retail sales this year, with a 14% drop in brick-and-mortar sales.
Online shopping is expected to offset the decline of in-person shopping. Ecommerce is poised to grow 18% following a 14.9% gain in 2019, according to eMarketer.
NPD’s Future of Tech report is also inline with eMarketers numbers. NPD expects Q4 2020 will see historic growth of 18% compared to Q4 2019, which saw 4% growth.
Still, market volatility and an uncertain end to the pandemic make it harder to predict the long-term growth.
Deloitte’s annual holiday retail forecast is even more optimistic about ecommerce sales. Deloitte expects ecommerce to grow by 25% to 35%, year-over-year for 2020-2021 holiday season. This compares to sales increasing by 14.7% in 2019. Ecommerce holiday sales are expected to generate between $182 billion and $196 billion this season.
Deloitte’s report notes high unemployment and economic anxiety will weigh on overall retail sales this holiday season. However, reduced spending on pandemic-sensitive services (restaurants and travel) may help bolster ecommerce holiday sales.
According to PowerReviews Holiday Consumer Survey, online shopping volumes will be the highest of all time. Sixty-four percent of consumers say they will spend more online than last year.
Brands are looking to Q4 to recapture lost revenue from a difficult year. But many acknowledge there may be some trial and error along with experimentation to cope with pandemic restrictions.
A Vertebrae survey says consumers want the ability to virtually place items in real-life environments (57%), virtually try on products (39%), and flip or spin digital renderings of items to inspect details (63%).
By implementing this functionality brands seek to ease concerns of shoppers new to online shopping. Those new shoppers fear whether items will fit, the ability to touch or feel products, and whether the item that’s delivered will look the same as advertised online.
Regardless of the range of overall ecommerce holiday spending predictions, most industry watchers agree that mobile will be a winner.
Seventy percent of U.S. consumers intend to make their holiday purchases online this year via mobile, according Glassbox. App Annie predicts the biggest Q4 holiday shopping season on mobile yet — with nearly 1 billion hours to be spent on Android devices in the U.S., up 50% year-over-year.
So, while forecasts for the holiday season vary, most agree that ecommerce will be a winner.