The festive season is fast approaching once again, and this year consumer spending is expected to skyrocket. With Black Friday and Cyber Monday only weeks away, shoppers are searching for the latest deals. Evie Rusman writes
Countrywide lockdowns have meant that most discount shopping will likely be done online this year. This poses a new challenge for merchants, who need to prepare for an upsurge in sales.
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Speaking to EPI, Peter O’Halloran, VP and General Manager of Global Digital Commerce at Fiserv, discusses how the holiday sales period is likely to be different this year.
He says: “We are really seeing major shifts in comparison to what we have seen over the years. Due to the pandemic, merchants need to be ready for Black Friday online sales and they need to capitalise on it. In this quarter, people are still unsure whether they will be able to go to physical stores and buy Christmas gifts, and so people are focusing more on shopping online.
“As a result, merchants have transformed this period into more of a Cyber November or Cyber Autumn. So, what we are seeing is that every week or every second week there is a new offer or discount. This means that the usual period of Black Friday sales is stretched out.”
Holiday sales – sink or swim?
In 2019, FirstData statistics revealed that in the US Black Friday sales grew 4.2% year on year, meaning consumers spent a total of $69m over the Black Friday weekend.
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By GlobalDataO’Halloran predicts that this figure is likely to be blown out the water this year as consumers have more disposable income to spend due to many being forced to stay at home.
“Even in mid-October, we saw a significant uptick in consumer spending,” he says. “In Asia, we have also seen this new phenomenon that started in China called ‘revenge spending’, where people have been forced to stay in, unable to travel, and as a result, are spending much more online. It is the idea that people are buying products to make themselves feel better.
“Ultimately, we do think that the trends we have seen over the past few weeks, and indeed, the second half of the year, are going to continue. I think it is going to be a great cyber November for online merchants.”
Despite this positive outlook, eCommerce consultancy Wunderman Thompson Commerce predicts that overall consumer spending will shrink. Based on the company’s recent research, the Black Friday period has been forecast to fall by nearly a quarter (22%) this year.
Hugh Fletcher, Global Head of Consultancy and Innovation at Wunderman Thompson Commerce, says: “Against the backdrop of Covid-19, Brexit and an uncertain economy, 2020 looks set to remain tough for many consumers, despite the appearance of this new and elongated discounting peak.
“While consumers may not have as much disposable income as they did last year, what they do have, they are more likely to spend online – and could well see a record for the biggest digital spend on Black Friday ever. For businesses, this means that there has never been a more important time to get their online offering right.”
Merchant preparedness
A huge upsurge in online sales could cause challenges for online merchants especially because we are in an era where consumers are becoming more and more impatient at the checkout.
According to 2019 statistics from Klarna and BigCommerce, four in ten (38%) of shoppers in the UK abandon an online purchase at least once a week.
The research suggested a lack of fast and affordable delivery options as the number one reason behind cart abandonment – over half of UK consumers (54%) admitted they have abandoned their online shopping due to delivery frustrations.
Speaking on this, Laurel Wolfe, VP marketing at Klarna, says: “Customer expectations are higher than ever before — their demands are greater, and their tolerance is lower. What our research highlights is that today, dropped baskets can happen at any stage of the customer journey and can be due to many factors — from a poorly designed website and a lack of payment options, to security fears and a clunky checkout process.
Adding to this, O’Halloran advises that merchants invest in the right ecommerce platforms to ensure a smooth checkout process. “Merchants need to invest in ecommerce platforms that feature trustworthy payment solutions – solutions that will help them manage their product catalogue online as well as offer a smooth checkout process.”
