Autumn is already in the air and more and more companies, especially electronic stores and exchanges, are preparing for holiday shopping around Christmas and New Year. However, expectations are contradictory.
After two years of the pandemic, physical distancing and avoiding the gathering of many people in closed physical spaces, e-commerce sites can probably say that these have been the two most successful years in the history of their existence.
Sales during the holidays of 2020 and 2021 were many times more. Not only that, but through this process, people have become accustomed to online shopping. Those for whom this was news two years ago learned and are still benefiting.
But what will it be like in the winter of 2022? The economic crisis, which is already a fact on a global scale, is causing many households to shrink their budgets. Will this affect holiday e-shopping?
Large logistics companies, which could barely cope with the excessive demand that appeared due to the pandemic, now have the opposite problem – too much delivery capacity. Today they have overcapacity.
For example, the three largest courier services in the US now have the capacity to handle 110 million holiday packages per day. That beats peak-season demand by 18 million packages a day, according to Satish Jindel, a consultant whose holiday volume forecasts are closely watched by delivery firms.
Such an imbalance could lead to “financial challenges for carriers if they don’t reduce staffing for this peak season,” Jindel says. This is because the increased volume of home deliveries is low-margin and difficult to offset the additional costs of maintaining temporary workers.
At the same time, however, e-stores expect a significant increase in purchases. According to some forecasts, holiday e-commerce will grow by 15.5% in 2022. Companies in the sector should prepare with appropriate stocks and personnel.
A key factor for online shoppers is the ease of making a purchase, according to a survey recently published by the Daily Scandinavian. This factor is decisive for 48% of shoppers.
For a third, low prices are important. They like free shipping almost as much, and one in four appreciates the fact that the product is in stock and doesn’t have to wait for it to be delivered to the retailer. It is extremely important for companies in the sector to be aware of consumer behavior and the rapidly changing business environment, analysts emphasize.
A detail that’s good to keep in mind is that last year’s purchase requests were roughly evenly split between desktop and mobile devices. This means that e-shops have an interest in taking care of the functionality and convenience of both versions: desktop and mobile.
The holiday shopping season is awaited with no less excitement by the advertising business. Online advertising is an industry that runs into overdrive around the approaching Black Fridays, Christmas and New Years.
Analysts report that conversion rates — the conversion of viewing an ad into an actual order — spike before the holidays. However, the conversion rate is much higher on desktop than on mobile, the data shows (about 6.9% compared to 3.4%).
In parallel, experts warn that with the boom in electronic sales, a boom in the activity of all types of virtual fraud and cyber-attacks should be expected. Along with good protection of own IT resources, e-shops should also think about the fact that someone might try to cheat people on the back of honest e-merchants or tarnish their name.
Fraudsters will try to use well-known, trusted brands to attract unwary and naive buyers and deceive them. The negatives of this – the dissatisfaction of deceived customers – will most likely fall on the backs of honestly operating companies. Teams must be prepared for such a scenario and have a plan to react in such a situation.