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December 19, 2024
Content Director, Bizrate Insights
According to the National Retail Federation, an estimated 197 million people shopped from Black Friday to Cyber Monday. During this time, shoppers focused on the plentiful deals and discounts available online and offline.
This year, shoppers took an extra helping, spending more than in 2023. Mastercard Spending Pulse reported that consumers spent 15% more online on Black Friday alone. The stores, however, saw a paltry gain of 0.7%, with an overall increase of 3.4%.
Shoppers were savvy as retailers spread promotional cheer early in Thanksgiving Week, and many seemed to extend these sales into the following week. The shortened holiday season may have influenced their approach as they looked to make the most of the remaining selling days before Christmas.
As always, the subject lines of the emails told the story. They called out headlines like “Starts early, up to 70% off amazing gifts.” The deals then centered on “your final chance” or “this is your last day.” However, some took it into a second week, with Cyber Week savings still ongoing. Perhaps it will never end.
Shoppers had to be discerning as, in some instances, the discounts grew while others were merely a twist on a prior sale at a later date.
Bizrate Insights surveyed 500 online shoppers immediately after Cyber Week from 12/3-12/5 to understand buyer behavior, as the numbers only tell part of the story. According to Adobe Analytics, Cyber Week (the five-day period from Thanksgiving to Cyber Monday) generated $41.1 billion, up 8.2% from 2023.
Interestingly, this is very much in line with their 11/1-12/31 overall holiday projection of an 8.4% increase.
Over half (55%) of those surveyed shopped on Black Friday, while Cyber Monday saw purchasing among 46% of this audience.
Q. Did you shop online during any of the following times?
53% of that group spent $250 or less. 19% of the remaining shoppers look to be bigger splurgers, spending more than $500 online during Cyber Week.
Q. How much did you spend online during Cyber Week (Nov. 28-Dec. 2)?
One of the most interesting aspects of the holiday season is the focus on self-consumption versus gifting. Though gifting dominates the messaging, the shopper’s mindset has shifted to taking advantage of both the best personal and holiday-related deals.
With 49% of shoppers spending over half their budgets on personal consumption, this holiday week is poised for future growth. Shoppers have learned the promotional cadence of their favored retailers, and they wait for the sales to open their wallets.
Q. When shopping online during Cyber Week, what percentage of your purchases were for self-consumption rather than gifts?
Shoppers typically have a desired discount threshold in mind. Unfortunately, our survey results show 39% were frustrated when promotions were lower than expected.
I was surprised as my own experiences tended to see the blanket 30% or 40% off everything by many retailers. Another 36% felt that prices seemed higher than in 2023, and inflation likely played a role. Buyer’s remorse was also in play, as 27% didn’t like not knowing if prices would be reduced even further in subsequent weeks.
Then, there is the out-of-stock factor, as 26% felt that more products appeared to be out of stock. That discussion was actually part of my Thanksgiving dinner, resulting in frustration for several guests when they could not find their clothing sizes from multiple retailers.
Other frustrations included the 18% who didn’t find the hot products on sale, which is typically the case as markdowns are unnecessary. Shoppers never like to see restrictions regarding free shipping, yet this seemed to be the case for 18% of shoppers. Delivery appeared not to be of concern except for 13% of shoppers.
However, one survey respondent called out an apparel retailer that offered free shipping but cited poor service and late delivery of a selected item. A few other minor callouts included slow sites, while another noted that hundreds of products didn’t meet their desired search criteria.
Q. Did you find any aspects of your Cyber Week shopping frustrating?
Most (53%) online shoppers had a promotion beyond free shopping on 50% or more of their purchases. Shoppers are conditioned to find and take advantage of these deals and will wait for their availability. In keeping with the abundance of promotions seen during this period, it’s essential to start with the fact that 21% of Cyber Week shoppers reported that all their purchases had a promotion beyond free shipping.
Conversely, only 8% said those purchases did not have such a promotion. One can only conclude that these promotions are standard fare this week and often throughout the year.
Q. What percentage of your online purchases had a promotion beyond free shipping?
A look at who reaps the spoils of Cyber Week shows that while 19% of shoppers only shop at Amazon, 41% have Amazon as part of their retailer shopping mix, along with a handful of other favorites. Many shoppers remain creatures of habit, as 23% shopped at almost the same retailers as 2023’s Cyber Week.
It’s nice to see that some shoppers will experiment, as 27% revealed that they shopped at some of the same retailers in 2023 but also bought from new ones. Though small in number, it’s positive that 12% shopped from smaller retailers. Hopefully to maintain the vitality and viability of these businesses.
Q. Thinking about the retailers where you made purchases online during Cyber Week, which of the following is true? (Multiple responses allowed)
The reasons and “why” behind purchasing from a brand or retailer should be instructive to all companies in customer-acquisition mode. Being competitive with prices and promotions tops the list, as shoppers are savvy when it comes to saving money. Those savings also included getting free shipping for 31% of those surveyed.
Fundamentals appeared to be in favor, as well, and 30% cited having products in stock, and yes, of course, interesting products can steer shoppers toward a particular retailer. Others of interest included a wishlist, while logistics also were a factor for 17% of those surveyed. Marketing generally had a lower frustration rate at 12%, with social media posts being a factor for just 13%.
Q. If you purchased from a brand or retailer for the first time, why did you buy from them? (Multiple responses allowed)
So now we wanted to understand the strength of each channel and the contribution that would likely be made relative to one’s overall holiday shopping. Shoppers continue to shift their dollars to the online channel, and the reasons in the subsequent chart make that easy to understand.
2 in 3 online shoppers will purchase more than half of their holiday shopping online.
Next, we look at how they see their full-year online behavior relative to 2023. While almost half (49%) will spend about the same, 33% of shoppers will have bought more online, propelling the growth of this channel. The fact that only 18% of those surveyed will buy less speaks to the satisfaction levels seen among online shoppers.
1 in 3 online shoppers will buy more online, while about half will purchase the same year-over-year.
The findings here are consistent with what I’ve seen among online shoppers. Their channel selection is driven first and foremost by convenience. Having witnessed the role of promotions relative to Cyber Week, one can only expect the impact of lower online prices at 37%, the ability to comparison shop to find the best prices (31%), the fact that there are more sales and promotions offered online (30%) or at least similar prices (23%) to all be most impactful when it came to spending increases.
Never forget the role of the assortment, as cited by 35% of participants. This becomes particularly important as retail stores are often challenged with putting forth the proper inventory, giving online a distinct advantage. 19% noted such an inventory challenge.
Regarding information, 25% expressed interest in reading product reviews, while 23% said information is more readily available online, fostering more informed purchases. 17% also cited better shopping experiences and tools online. Surprisingly, only 12% called out the crime factor, with just slightly more feeling like the retail store experience could be better (17%).
Convenience overwhelmingly drives increased online spending, while prices and better assortment increase spending for 1 in 3 online shoppers.
Given their sheer volume, we wrap up our research by looking at overall year-over-year holiday spending, store holiday shopping, and Amazon.
The National Retail Federation expects overall holiday spending to grow 3.5%. Here, shoppers indicate that 28% will spend more, 6 in 10 holding steady, and just 12% expect to spend less.
The store sees similar numbers at 60% flat, where those increasing (21%) and those reducing (19%) seem on par.
Amazon is in a perfect position and will likely see expansion, with 30% saying they will spend more. Just a limited number of shoppers (13%) will buy less, and 57% are expected to shop about the same.
Now is the time to plan for the new year. Here are a few ideas for putting your best foot forward and driving growth and profitability.
When you’re ready to put some of these ideas into practice, let us help you measure their success.
Book a demo today with Bizrate Insights.
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