Consumer Insights | Digital Commerce 360 https://www.digitalcommerce360.com/topic/consumer-insights/ Your source for ecommerce news, analysis and research Tue, 24 Oct 2023 14:21:06 +0000 en-US hourly 1 https://wordpress.org/?v=6.3.2 https://www.digitalcommerce360.com/wp-content/uploads/2022/10/cropped-2022-DC360-favicon-d-32x32.png Consumer Insights | Digital Commerce 360 https://www.digitalcommerce360.com/topic/consumer-insights/ 32 32 Web shoppers will prioritize their holiday spending https://www.digitalcommerce360.com/2023/10/24/web-shoppers-prioritize-holiday-spending/ Tue, 24 Oct 2023 14:21:06 +0000 https://www.digitalcommerce360.com/?p=1311081 The evidence continues to pile up that web shoppers will keep spending online this holiday shopping season. But shoppers, both online and offline, do have limits, including how much they will spend and where they will spend it, according to new research from the International Council of Shopping Centers. The survey of 1,007 consumers projects […]

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The evidence continues to pile up that web shoppers will keep spending online this holiday shopping season.

But shoppers, both online and offline, do have limits, including how much they will spend and where they will spend it, according to new research from the International Council of Shopping Centers.

The survey of 1,007 consumers projects that about 204 million consumers (87%) will head to brick-and-mortar stores this holiday season. Meanwhile, three-quarters of respondents say they plan to make a purchase online and have the items shipped to them. Expected spending is evenly split between online and in-person shopping, with 41% of total expenditures expected to happen at a physical store, compared with 42% online, and 17% click and collect.

Consumers plan holiday spending differently

Consumers anticipate consolidating their purchases across fewer retailers this holiday season. They plan to purchase from an average of 2.4 different types of retailers, compared with 3.4 in 2022. Discount department stores remain the most popular stop for 63% of shoppers. Traditional department stores are the second-most popular destination (34%), followed by electronics stores (22%).

During those shopping trips, most consumers plan to pay with a debit (63%) or credit (50%) card. Nearly half (48%) expect to pay with cash, while 14% will leverage buy-now-pay-later options.

Gift cards remain the most popular category for purchases — an item that’s on the shopping list of 63% of respondents — followed by apparel and footwear (56%), and toys and games (49%). 45% of consumers plan to purchase food, like pre-packaged baskets and alcohol, while electronics and experiential purchases were cited by 41% and 22% of respondents, respectively.

79% of consumers plan to start shopping for the holidays earlier than they normally would. In fact, one in four already started their holiday shopping in August or earlier. Of the consumers who plan to shop earlier for the holidays, 51% do so for the early promotions.

“This year’s forecast shows the industry is balancing itself out after rapid growth over the last few years,” ICSC CEO Tom McGee.

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Research firm predicts sluggish holiday spending https://www.digitalcommerce360.com/2023/10/23/cgp-predicts-sluggish-holiday-spending/ Mon, 23 Oct 2023 19:10:52 +0000 https://www.digitalcommerce360.com/?p=1311063 2023 holiday spending could be a disappointment for retailers. Retailer research firm Customer Growth Partners (CGP) estimates holiday spending will increase by just 2.1% over 2022, to $928 billion from $909 billion the previous year. That would be the lowest holiday spending growth since 2012. “As consumers revert to more conservative and thoughtful spending patterns, […]

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2023 holiday spending could be a disappointment for retailers. Retailer research firm Customer Growth Partners (CGP) estimates holiday spending will increase by just 2.1% over 2022, to $928 billion from $909 billion the previous year. That would be the lowest holiday spending growth since 2012.

“As consumers revert to more conservative and thoughtful spending patterns, the pendulum has swung from 2021’s 13% growth to today’s anemic 2%. After two years of warp-speed growth, consumer spending on goods is easing to near-normal historic rates,” ” says Craig Johnson, CGP president.

CGP’s prediction is lower than the estimate from accounting and consulting firm Deloitte. Deloitte forecasts holiday spending to grow between 3.5% and 4.6% in 2023. 

Online holiday spending will fare better

CGP estimates ecommerce spending will grow 5.1% this year, more than double the growth rate of overall spending. That’s still below Deloitte’s estimate of 10.8% to 12.8% ecommerce growth, but it’s in line with Adobe’s 4.8% growth projection.

Inflation hits consumer spending

“The sharp deceleration in retail growth is due to stubborn inflation in many sectors, spiking interest rates, a year-over-year decline in COVID-era federal stimulus, and the ongoing rotation of consumer spending from goods to services,” Johnson says.

Student loan repayments restarting and a drop in the housing market may also have an impact, he says.

Inflation and rising costs for consumers are most likely to impact sales of discretionary items, according to the report. Big-ticket items like products from home improvements and furnishing retailers will likely feel the pinch, CGP says. That’s consistent with what many retailers said in second-quarter earnings reports, citing consumer reluctance to spend discretionary funds and turning to discount retailers.

What sectors will have the highest holiday spending?

CGP projects the health and personal care category will experience the most significant growth in spending, up 5.2% thanks to growth in the beauty market this year. Adult beverages, both alcoholic and non-alcoholic, will grow 3.1%, while apparel will grow modestly at 2.5%, CGP predicts. General merchandise sales will remain stable, with projected 1% growth.

Meanwhile, home-related retailers will likely see losses. CGP predicts sales will decrease 6% in the home furnishings category and 4% in the home improvement category. Toys and hobbies and consumer electronics will likely see more modest losses, at 2.8% and 2.5%, respectively.

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Online shoppers will open their wallets for the holiday deals they want https://www.digitalcommerce360.com/2023/10/19/online-shoppers-holiday-shopping-deals/ Thu, 19 Oct 2023 15:56:11 +0000 https://www.digitalcommerce360.com/?p=1310910 Despite caution around spending during the holiday shopping season due to economic fallout from the pandemic and subsequent inflationary pressure, consumers are expected to spend an average of $1,652 this holiday shopping season. That represents a 14% increase from a year ago, according to Deloitte’s 2023 Deloitte Holiday Retail Survey. It is the first time […]

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Despite caution around spending during the holiday shopping season due to economic fallout from the pandemic and subsequent inflationary pressure, consumers are expected to spend an average of $1,652 this holiday shopping season. That represents a 14% increase from a year ago, according to Deloitte’s 2023 Deloitte Holiday Retail Survey. It is the first time in three years consumer spending during the holiday shopping season will exceed pre-pandemic levels, according to Deloitte, which conducts the survey annually.

Along with spending more this holiday season, more consumers plan to purchase holiday gifts than in 2022. Some 95% of consumers surveyed plan to purchase a holiday gift this year. That’s up from 92% in 2022, and 88% in 2021. The trend also reflects a return to pre-pandemic levels, according to Deloitte.

“In recent years, we’ve seen consumers hold back on holiday spending, but this year, we are seeing higher planned participation during the holiday shopping season and higher spending, especially in categories we haven’t seen that in for a while,” says Lupine Skelly, retail research leader for Deloitte and a co-author of the report.

Gift card spending is up

One trend that stands out, Skelly says, is that gift givers plan to spend $300 on gift cards, on average. That’s up from $219 a year ago.

Gift cards are also a way for gift givers to ensure gift recipients receive a gift they want, but which the giver may not be able to purchase themselves. For example, gift cards can purchase an avatar for a video game or other types of digital goods.

“The increase in spending on gift cards is a way to put inflationary pressure on gift card recipients by making sure that gift givers are giving a gift that represents money well spent,” Skelly says.

Prices will determine holiday shopping

Other key trends to emerge include consumers seeking out more promotional deals to help stretch their budgets, and consumers budgeting for higher prices by planning to buy fewer gifts on average than the previous year, despite planning to spend more. In 2023, consumers plan to purchase eight gifts, on average, compared with nine in 2022, to compensate for higher prices.

Retail executives expect prices to be higher this holiday season. 56% expect a single-digit percentage increase and 19% expect a double-digit percentage increase. Deloitte surveyed 43 retail executives in the United States from June 23 to June 30. On the consumer side, 72% of consumers expect to see higher prices this holiday season.

54% of respondents who will shop online plan to add a gift to their wish list or shopping cart, then wait for a sale that will lower the cost of the item before purchasing it. Deloitte surveyed 4,330 consumers in the U.S. between Aug. 30 and Sept. 8 of this year.

Consumers will likely be active bargain hunters during the five-day stretch beginning Thanksgiving Day through Cyber Monday (also known as the Cyber 5). During that period, retailers offer some of their best deals of the holiday shopping season to drive sales. 66% of consumers plan to shop during this period, up from:

  • 49% in 2022
  • 47% in 2021
  • 53% in 2020

Black Friday and Cyber Monday will most likely be the days when bargain hunters are most active. 31% of consumers plan to shop on each of those days, respectively. Another 25% of respondents plan to take advantage of October promotional events for the holiday season.

“We’re seeing more consumers planning to take advantage of promotional deals, especially Black Friday and Cyber Monday deals,” Skelly says.

Consumers want free shipping

Another factor driving consumers to seek out promotional deals is that the window for the holiday shopping season has shrunk in recent years from 7.4 weeks pre-pandemic to 5.8 weeks.

“As the holiday shopping window narrows, it puts more emphasis on promotional events,” Skelly says.

In addition to seeking out promotional deals, online shoppers this holiday season are more likely to seek purchase thresholds to receive free shipping. Eight of 10 respondents who plan to shop online this holiday season say they are willing to meet the minimum purchase threshold to receive free shipping. In comparison, six of 10 online shoppers say they would abandon their shopping cart if they discovered hidden shipping costs before checkout. On average, consumers say they want to spend $40 to receive free shipping, while retailers say they plan to offer free shipping this holiday season on orders totaling a minimum of $64, on average.

Holiday shopping plans vary by income level

While consumer spending is expected to increase across the board this holiday season compared to last year, middle-income consumers, those earning between $55,000 and $99,000 annually, are expected to have the highest increase in holiday spending. Consumers in this demographic expect to spend $1,534 on holiday gifts, a 26% increase from the previous year. Millennials who fall within this demographic expect to spend $1,949 on holiday gifts, a 35% increase from 2022.

High-income individuals, those earning $200,000 or more in annual salary, are also expected to significantly boost their holiday gift giving spend. Consumers within this demographic expect to spend an average of $3,922 on gifts this holiday season, a 22% increase from the same period a year ago. Within this demographic, women expect to spend 23% more than men.

Gifts are not the only thing consumers plan to spend more on this holiday shopping season. Many plan to spend more on gifts for themselves or their home. Some 75% of consumers say they can be tempted to purchase an item for themselves when gift shopping this holiday season.

82% of consumers say they plan to purchase a non-gift item this holiday season, compared with 77% in 2022, and 74% in 2021. Apparel, home furnishings and holiday decorations are expected to be the most popular non-gift items this holiday shopping season, with 67% of respondents planning to purchase apparel and 59% expecting to purchase the latter.

“Non-gift purchases are easy to cut out if a budget is tight. That consumers plan to spend more on non-gift and self-self-gifted items is a positive,” Skelly says.

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Gen Z consumers are optimistic about AI improving online shopping https://www.digitalcommerce360.com/2023/09/22/gen-z-online-shopping-ai/ Fri, 22 Sep 2023 19:11:01 +0000 https://www.digitalcommerce360.com/?p=1309515 Gen Z consumers say they have high hopes for artificial intelligence and its uses in online shopping, according to a new survey. 88% of Gen Z consumers say they believe AI will improve online shopping, according to a survey from ecommerce software company Rokt of 6,023 consumers in May 2023.  “Brands and retailers across categories […]

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Gen Z consumers say they have high hopes for artificial intelligence and its uses in online shopping, according to a new survey. 88% of Gen Z consumers say they believe AI will improve online shopping, according to a survey from ecommerce software company Rokt of 6,023 consumers in May 2023. 

“Brands and retailers across categories are scrambling to identify how they can best use AI to elevate their ecommerce customer experience and drive revenue,” Elizabeth Buchanan, chief commercial officer at Rokt, said in a press release. “This research provides decision makers with a roadmap for creating new strategies and implementing advanced tech, such as AI, to significantly help improve the online shopping experience in ways that will surprise and delight shoppers.”

55% of Gen Z consumers in the survey also said they were interested in an AI assistant that could make finding new products simpler. 51% said they would try shopping in augmented reality and virtual reality. 

Gen Z survey respondents also said AI could be used in other ways:

  • Compare prices (47%)
  • Find deals (45%)
  • Receive relevant offers and product suggestions (41%)
  • Receive personalized assistance (37%)
  • Find reviews (28%)

How will AI change online shopping?

Retailers are already implementing AI to save on costs and improve customer experiences. 

For example, men’s grooming DTC retailer Huron uses AI to automate bookkeeping services. Huron uses AI vendor Finaloop to track revenue across its multiple sales channels and manage inventory.

Online electronics retailer Newegg Commerce Inc. is also implementing AI, but in a way that more directly impacts consumers. The retailer uses generative AI to summarize common points that come up in customer reviews in “Review Bytes.” As of September, 20% of SKUs have AI-generated summaries. 

Google recently released a new AI tool that lets consumers virtually try on clothes. Several brands from Digital Commerce 360’s Top 1000 online retailers in the U.S. are already compatible with Google’s tool. Consumers can try on clothes from Anthropologie (part of Urban Outfitters Inc., No. 30), Everlane Inc. (No. 271), H&M, and Loft (part of Ascena Retail Group, No. 33). The tool can also suggest specific products based on customer preferences like color and price across brands. 

However, some retailers are more cautious about the changing technology. Dean McElwee, director, global ecommerce collaboration at The Stanley Black & Decker Company, recently told Digital Commerce 360 why generative AI is “still immature” and not ready to be implemented just yet.

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Consumers plan to cut holiday spending in the face of rising prices https://www.digitalcommerce360.com/2023/09/18/consumers-plan-to-cut-holiday-spending-in-face-of-rising-prices/ Mon, 18 Sep 2023 14:49:34 +0000 https://www.digitalcommerce360.com/?p=1309238 Holiday spending will be more difficult for many U.S. consumers in 2023, according to a new survey. Online review platform Trustpilot released its annual holiday survey of 2,000 U.S. adults.  Consumers have less disposable income to spend than in previous years, and they’re finding alternatives to fund purchases. One in three holiday shoppers told Trustpilot […]

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Holiday spending will be more difficult for many U.S. consumers in 2023, according to a new survey. Online review platform Trustpilot released its annual holiday survey of 2,000 U.S. adults. 

Consumers have less disposable income to spend than in previous years, and they’re finding alternatives to fund purchases. One in three holiday shoppers told Trustpilot they’re considering going into credit card debt to make holiday purchases this year. The same proportion are willing to take on additional side hustles to fund holiday spending.

34% are considering using savings for the holidays. An even larger percentage, 41%, are considering using Buy Now, Pay Later services to fund purchases. Two out of five consumers even said they would cut back on essentials, like food and gas, for holiday purchases. 

Respondents told Trustpilot they’re planning to spend less, and spend differently, than in 2022. 

On average, U.S. consumers said they plan to spend 39% less on holiday shopping this year than they did in 2022. The remaining gifts they still plan to purchase are less likely to be physical items. 41% said they plan to opt for some digital options, like gift cards. 

Shipping prices are an impediment to holiday spending

Shoppers say these choices are a response to rising prices that reduce spending power.

43% said increases in product prices would be a reason not to do their holiday shopping with a particular retailer. 42% said the same about increased shipping costs. 

Nearly two-thirds (64%) said if delivery costs increased, they would reduce their cart total to offset the cost. The same number said they would switch to exclusively shopping in physical stores, and 60% said they would only buy from online retailers offering free shipping.

Consumers also noted shipping mishaps they experienced in 2022, which impact choices in 2023 holiday spending. 

“Last year’s mishaps damaged consumer trust, and with a tighter grip on their wallets this season, meeting consumer expectations will be key for retailers’ success,” Mieke De Schepper, chief commercial officer at Trustpilot, said in a written statement. “Based on experiences shopping online last holiday season, 30% of Americans trust businesses a lot to get them the products they need on time this year, and while that is promising, there is still more work to be done to increase that number.”

35% of consumers said they might decide not to purchase from a retailer based on their choice of shipping carrier. That’s due to shipping mishaps in 2022. Lack of communication was the biggest complaint, which 57% of shoppers cited. Lost or damaged packages were a problem for 51% of shoppers, followed by delayed packages (49%) and unpleasant delivery people (41%). 

Consumers are split on who to blame for a poor shipping experience. 37% blame a retailer, and 25% blame the brand. 

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Holiday spending has already begun https://www.digitalcommerce360.com/2023/09/15/holiday-spending-has-already-begun/ Fri, 15 Sep 2023 18:21:21 +0000 https://www.digitalcommerce360.com/?p=1309078 Holiday shopping is top of mind for retailers as they want to make it easy for consumers to shop for their products. Pura, a retailer that sells fragrance products, is preparing for the busy holiday shopping season well before Black Friday with its annual “Influencer Early Access” promotion. The retailer’s promotion occurs November 1-2. Last […]

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Holiday shopping is top of mind for retailers as they want to make it easy for consumers to shop for their products. Pura, a retailer that sells fragrance products, is preparing for the busy holiday shopping season well before Black Friday with its annual “Influencer Early Access” promotion.

The retailer’s promotion occurs November 1-2. Last year, influencers shared the promotion through their social media channels like TikTok. Shoppers were instructed to tap on the influencer’s link and type in a unique password to redeem the promotion.

Pura early influencer access

Last year, influencers shared unique links and passwords for followers to use to redeem a buy one, get one free Pura diffuser with fragrances.

Sam Forrest, senior digital marketing manager, said the retailer is preparing for the holiday season with dedicated campaigns in Q3 and Q4 2023. In the third quarter, Pura is is focusing on promoting Pura Car, its new product for car fragrances. In Q4, it will be at LTK Con, an invite-only conference in September. LTK is a shopping app that connects influencers with brands; it hosts the conference.

“We are excited to position both Pura Car and the Pura Smart Fragrance Diffuser as must-have gifts for the holiday season,” Forrest said. “We will also be putting a large emphasis on gifting.” This includes specific sets and gift options that will be available for purchase to make shopping easy, she said.

Last year was a BOGO offer, but this year will be Pura’s “best deal of the year,” according to the retailer. The promotion was the brand’s biggest online sales period for 2022, Forrest said, without revealing more.

Holiday sales expected to grow in 2023

Accounting and consulting firm Deloitte projects holiday ecommerce sales will total between $278 billion and $284 billion between November and January. In 2022, holiday online sales grew 7.9% year over year to a total of $252 billion.

Deloitte also forecasts total holiday sales (in store and online) of retail and consumer products to total between $1.54 trillion and $1.56 trillion from November to January. The projected 3.5% and 4.6% year over year growth would be at a slower pace compared with 7.6% growth in 2022, due in part to inflation, said Daniel Bachman, Deloitte’s U.S. economic forecaster. “This means the total value of retail sales will grow more slowly than last year,” he said.

Pura home diffuser influencer holiday promotion

Pura launched its “Influencer Early Access” promotion well before the holiday season last year, too. This is part of a larger trend of retailers starting promotions well before the season to encourage early holiday spending.

Ted Vaughan, assurance market leader at BDO, says he thinks the holiday season is going to start earlier once again this year.

“I mean, it’s already started; I don’t think that’s going to die away,” Vaughan said. “I don’t think it’s going to lose its steam. And one of the reasons is because of the consumer purchasing power, as it’s gone down.

Early holiday spending is trending

Rodney Mason, head of marketing and brand partnerships at LTK, said the shopping app is working with retailers to prepare for the holiday season.

“We are working with retailers much earlier to get holiday messaging in the market sooner and in new and different ways to address shifts in consumer shopping behaviors,” Mason said. “We found in our recent holiday shopper study that a large portion of the general population intend to begin holiday shopping by September to afford them more time to find better-quality values this year.”

38% of shoppers are planning to start holiday shopping as early as September, a 25% increase from 2022, according to the LTK study. LTK conducted the holiday survey on June 30, 2023 with 1,136 of consumers identified as Gen Z and Millennials.

Vaughan added that retailers have found it better in previous years to provide flexibility by marketing early promotions. By promoting the holiday season earlier, he said, retailers lengthen the amount of time for consumer spending. It can be challenging for consumers to spend their holiday budgets all in November, he said.

Vaughan said the omnichannel experience is increasingly important to holiday online sales.

“Something like Black Friday has become less of an event, right?” Vaughan said. “And so coming into the store has now been replaced in large part by online sales.”

Abbas Haleem contributed to this article.

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Deloitte: Holiday ecommerce sales to grow this season https://www.digitalcommerce360.com/2023/09/13/deloitte-holiday-ecommerce-sales/ Wed, 13 Sep 2023 20:51:08 +0000 https://www.digitalcommerce360.com/?p=1309042 The 2023 holiday season is fast approaching, and retailers are preparing for it. Accounting and consulting firm Deloitte announced Sept. 13 that it estimates 2023 holiday ecommerce sales to grow 10.3% to 12.8% over 2022. Deloitte projects holiday ecommerce sales to total between $278 billion and $284 billion between November and January. That compares with […]

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The 2023 holiday season is fast approaching, and retailers are preparing for it. Accounting and consulting firm Deloitte announced Sept. 13 that it estimates 2023 holiday ecommerce sales to grow 10.3% to 12.8% over 2022.

Deloitte projects holiday ecommerce sales to total between $278 billion and $284 billion between November and January. That compares with 7.9% growth in 2022 to a total of $252 billion in holiday ecommerce spending.

Holiday ecommerce and overall retail sales

Ecommerce sales over the Cyber 5 period (the five days from Thanksgiving through Cyber Monday) alone grew 4% year over year in 2022, Digital Commerce 360 reported at the time. They reached $35.27 billion in the five-day period, up from $33.90 billion in 2021. Digital Commerce 360 also found that holiday ecommerce sales in November and December 2022 increased 3.5% to $211.7 billion.

Deloitte also forecasts total holiday sales (online and offline) of retail and consumer products to total between $1.54 trillion and $1.56 trillion from November to January. That would be growth between 3.5% and 4.6% year over year in 2023. In 2022, Deloitte said, holiday sales grew 7.6% from November to January.

“Inflation, which accounted for much of the increase in the value of retail sales last year, should moderate,” said Daniel Bachman, Deloitte’s U.S. economic forecaster. “This means the total value of retail sales will grow more slowly than last year.”

Bachman added that Deloitte’s holiday ecommerce sales forecast also reflects a decreasing pool of pandemic-era savings. That, plus inflation, will weigh on retail sales, he said.

Meanwhile, Nick Handrinos, vice chair of U.S. retail, wholesale and distribution and consumer products leader at Deloitte, said holiday ecommerce sales should be strong this year. He said Deloitte expects “retail sales to increase even as higher prices continue to create a battle for consumer spending.”

“This season, ecommerce sales should continue to be strong as consumers search for the best deals online to maximize their wallets,” Handrinos said. “Retailers who remain flexible to shifting consumer demand and behaviors will likely be poised for growth this holiday season.”

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Retailers are driving East Africa’s adoption of digital payments https://www.digitalcommerce360.com/2023/09/05/east-africa-ecommerce-digital-payments/ Tue, 05 Sep 2023 15:05:41 +0000 https://www.digitalcommerce360.com/?p=1308616 Retailers such as grocers and department stores are driving the uptake of digital payments in East Africa. Buyers in the region prefer to pay online instead of using physical debit or credit cards, according to payments provider Pesapal Ltd. The typical ecommerce basket in East Africa is about 5,242 Kenyan shillings ($36), while a basket […]

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Retailers such as grocers and department stores are driving the uptake of digital payments in East Africa. Buyers in the region prefer to pay online instead of using physical debit or credit cards, according to payments provider Pesapal Ltd.

The typical ecommerce basket in East Africa is about 5,242 Kenyan shillings ($36), while a basket settled using a point-of-sale terminal averages 5,117 shillings (about $35), according to Agosta Liko, founder and group chief executive officer of Nairobi-based Pesapal.

The company forecasts East Africa ecommerce basket values will increase by as much as 18% in the next two years.

“It will be driven by growing acceptance among customers and by retailers diversifying to digital products,” Liko said in response to emailed questions.

Africa ecommerce growth

A report by McKinsey & Co. published in September projects East Africa’s payments market, primarily in Kenya and Uganda, to grow at 20% annually until 2025. West Africa, including Nigeria, Ghana and Ivory Coast, is the fastest-growing sub-region at 35%. On the continent, the industry is forecast to reach $40 billion by 2025. That would be up from $16 billion in 2020, according to the management consulting giant.

Other ecommerce payment drivers in East Africa are the travel and hospitality industry, telecommunications companies, utilities and government services, Liko said.

“Public policy continues to enable innovation and even drive adoption through e-government initiatives,” Liko said. “Ecommerce is still fragmented, but COVID-19 kicked this forward by a decade.”

The payments platform began operations in 2009. It offers services to more than 50,000 businesses and people in:

  • Kenya
  • Rwanda
  • Tanzania
  • Uganda

Pesapal partners with platforms including Apple Pay, Fitbit Pay and Google Pay, telecommunications companies such as Airtel Africa Plc, MTN Group Ltd., Safaricom Plc, and Tigo by Millicom International Cellular, to enable payments both online or at a physical point-of-sale.

Africa is the world’s fastest-growing smartphone market, and with integration of innovations such as QR codes and near-field communication in phones, changes in its payments landscape are likely to accelerate, Liko said.

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80% of Chico’s customers sign up for its loyalty program in the first nine months https://www.digitalcommerce360.com/2023/08/09/80-of-chicos-customers-sign-up-for-its-loyalty-program-in-the-first-nine-months/ Wed, 09 Aug 2023 19:01:42 +0000 https://www.digitalcommerce360.com/?p=1244737 Chico’s FAS Inc. debuted a new loyalty program in June 2022, with hopes of seeing 65% of its customer base join in the first year, senior vice president of marketing Leana Less says. Within nine months, 80% of Chico’s customers were members of the program, she says. Loyalty programs are still fairly uncommon among retailers […]

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Chico’s FAS Inc. debuted a new loyalty program in June 2022, with hopes of seeing 65% of its customer base join in the first year, senior vice president of marketing Leana Less says. Within nine months, 80% of Chico’s customers were members of the program, she says.

Loyalty programs are still fairly uncommon among retailers in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers. Fewer than one-third of Top 1000 retailers have a loyalty program, and under 40% of apparel retailers have the option. Just under half of retail chains have loyalty programs, more than any other merchant type, according to Digital Commerce 360 data.

The loyalty program, Chico’s Rewards+, divides customers into four tiers based on their annual spending. The lowest tier encompasses customers who spend less than $200 in a year, up to $2000 or more for the highest level of the program. Members are also eligible for rewards points based on their spending, free shipping, and free returns, depending on which level they’re on. 

Chico’s ranks No. 108 in the Top 1000. The apparel retailer‘s brands include Chico’s, White House Black Market, and Soma.

Retailer uses technology to better target customers

2022 was the first time Chico’s made major changes to its loyalty program since the 1990s. 30 years later, “our technology was outdated,” Less says.

“The previous programs had significant limitations of what we would be able to do in the future,” she says. 

The new technology gave Chico’s the capability to better target consumers. Now, the retailer has access to “really phenomenal micro segmentation” of consumers, Less says, calling it “really critically important.”

With the previous technology, a promotion would go out to the entire rewards member base. Now, Chico’s can target promotions to get the most value; for example, by giving a specific discount to members who are at the top of one tier to migrate them to the next level, Less says.

Chico’s most loyal members have near 100% rewards redemption rate

Chico’s Rewards+ members are incredibly valuable for the retailer, according to Less. 

In the most recent fiscal quarter, average spend per customer was 40% higher among members than among non-members. While there isn’t year-over-year data because the rewards program is so new, early results are promising. The average member “spends significantly higher [than non-members] and then the likelihood of her coming back the next quarter versus somebody that’s not in the loyalty program is significantly higher as well,” Less says.

Order frequency is also “off the charts,” she says. Members order three to four times more frequently than non-members. 

Those numbers are even more appealing for Chico’s when looking exclusively at the Phenomenal tier, made up of customers who spend at least $2,000 annually. That tier is the smallest of the four in terms of how many members are in it, but is overrepresented in sales, Less says, and is responsible for “the bulk of revenue.” The top 100 customers in the program are responsible for $15,000 in annual sales. These top purchasers are ordering five to 10 times as frequently as lower-tier members, who are already outpacing non-members, Less says. 

Members at that level also have “close to a 100% redemption rate” on rewards, she says. Rewards at Chico’s expire after 90 days. The high utilization rate shows members, especially those at the top level, enjoy “playing the game” of using rewards to get the best deal, Less says.

Rewards are important to consumers across retail

Though a minority of retailers in the Top 1000 offer a free loyalty program, they can be a valuable way to collect consumers data. For some retailers, consumers embrace the membership and discounts that might accompany it.

40% of consumers said they’re most likely to open an email with an offer tied to a loyalty program in a Digital Commerce 360 and Bizrate Insights survey of 1,015 people in May 2022. That’s behind messages about discounts, and shipping, order and delivery confirmations, but more likely than free shipping, back in stock and other messages.

28% of consumers said being a member of a loyalty program makes them more likely to place an order from that retailer, in a Digital Commerce 360 and Bizrate Insights survey of 1,060 online shoppers in January 2023.

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Apparel shoppers accelerate online buying https://www.digitalcommerce360.com/2023/08/07/apparel-shoppers-online/ Mon, 07 Aug 2023 13:00:38 +0000 https://www.digitalcommerce360.com/?p=1231969 Apparel shoppers say they love online shopping, but few are willing to give up the advantages of visiting stores. Digital Commerce 360 and Bizrate Insights surveyed 1,003 online shoppers in June 2023 to learn more about their buying tendencies within the apparel and accessories category of Top 1000 retailers. 35% of online shoppers said they bought […]

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