At Christmas last year a five-year-old asked me where my presents came from. I told him Santa made them in his workshop at the North Pole. He looked at me quizzically and asked: “Why doesn’t Santa just buy them online?”
The kid’s right. Santa is working too hard. But more importantly it’s a clear sign of the shifting mentality of shoppers, especially around the festive season. The rules have changed, but only the most advanced and successful businesses have realised this and taken action.
Christmas is still the most vital shopping period of the year for almost every retailer. But the stereotype of people leaving their shopping until the last minute is not ringing true any more. Online sales and promotional periods have broken the rhythm of last-minute buying.
Last December, Australian Bureau of Statistics retail trade data showed that online made up 5.6% of the annual retail figure. That’s a good number, until you realise November accounted for 6.6%.
There are a few key reasons for this, and they’re all overseas phenomena that have taken hold locally. Ipsos marketing research showed that Australians are increasingly shopping during key sales events. (1)
- Singles Day (November 11) – originally a date for single people to go shopping in China, but as of 2018 one that sees 4% of Australians now joining in the frenzy.
- Black Friday – the day after the US Thanksgiving holiday, and traditionally the start of their Christmas season – is growing rapidly in Australia. Ipsos marketing research showed that 15.5% of Australians opened up their wallets for it in 2017 and 24% of us did so last year.
- Cyber Monday – the Monday after Thanksgiving and two days after Black Friday – is a recent creation of retail lobbies. Designed to encourage people to shop online as the festive season ratchets up a gear, it is clearly catching on locally with 17% of Australians partaking by shopping in 2018, up from 11% the previous year.
In Australia, rather than being two distinct shopping days, Black Friday through Cyber Monday has promptly developed into an all-encompassing four-day promotion. If you’re not at the table for these events now you’re allowing your competitors, and overseas retailers, to capture both intent and customers.
And if you need more convincing, Australia Post’s 2019 eCommerce Industry Report revealed the five weeks from November 11 to December 15 accounted for almost 15% of all eCommerce transactions for the year.
The peak for this period was the four days from Black Friday to Cyber Monday, which provided the bridge to the biggest online shopping week in Australia’s history, seeing growth of over 28% between 2017 and 2018.
Why are people going earlier now?
There are several reasons we are seeing more of these early-bird shoppers each year in Australia. Firstly, there’s the seasonal influence of warmer weather and major sporting events that start to land in October and November.
With this increase in festive vibes, there may be some desire to refresh the wardrobe with online retailers, get fit, attend events and generally emerge from hibernation. Accordingly, in 2018, Facebook and Instagram conversations around “gifts” started to ramp up from mid-October, with gift conversations on Instagram rising markedly from early November.(2)
But one of the most significant drivers of this growth is the ongoing rise of mobile and social platforms. These channels have fast become the new shopping and discovery destination for consumers.
Accenture research shows the Facebook Family of Apps is now a key discovery channel for consumers, regardless of product type.(3)Instagram Stories, in particular, is becoming a key source of inspiration for gift giving.
Automation with social marketing around these peak spending periods is becoming an essential plank in retail strategy. Cutting edge direct-response advertisers are now tapping into a specific set of automated ad tactics to drive new growth via the Facebook Family of Apps.
Australian e-commerce success story The Iconic is just one brand that has profited through these tactics. Using dynamic ads targeted at broad audiences, it boosted its campaigns, creating a 67% higher return on ad spend and a 2.76x increase in sales, when comparing January and May figures last year.
In short, brands now need to plan how they’re going to guarantee a consistent presence in the modern-day shop window if they want to thrive.
Equally important is ensuring business opportunities don’t go begging when the festive period commences. It’s now accepted wisdom that a slick customer experience that doesn’t jar is essential for any e-commerce business.
PwC’s Experience Is Everything study from 2018 showed a third of shoppers globally would stop doing business with a brand they love after only one bad experience. Boston Consulting Group’s Zero Friction Future report last year also revealed the estimated annual opportunity cost of friction in the APAC region is a staggering $325 billion.
Offering a clean and easy check out process will be a priority for everyone from now on.
What’s the opportunity?
Ipsos research shows in 2019 the average Australian shopper is planning to spend 17% more on their holiday purchases than the year before.
The trend is most noticeable among the younger demographics, with 18-34 year-olds estimating they will spend 25% more this festive season. Australian parents are freeing up the purse strings too, anticipating they will spend 21% more.
So not only do we expect that the festive shopping season will start earlier than ever in 2019, consumer sentiment suggests those with an attractive proposition will be the biggest winners.
It’s a simple equation; businesses that are in-market earlier and have a mobile optimised, social-led experience are in the box seat for a very merry Christmas indeed.
1.“Facebook 2019 Holiday Study” by Ipsos marketing (Facebook-commissioned online study of 1,519 respondents, ages 18+, Australia), Jan 2019.
2.Facebook and Instagram data, ages 18+, Australia, Sep-Dec 2018.
3.Facebook IQ commissioned online study by Accenture of 71,794 respondents ages 18+, across 9 countries and 7 verticals, 2018-2019.