This holiday shopping season is expected to break e-commerce records. Here are seven trends we’re keeping an eye on over the next month.
Seven E-Commerce Trends to Watch For During the Holidays
The Street is watching.
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Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
Delivery issues
All signs point to an early start to the peak holiday shopping season. Paid search spending started to rise four days earlier than normal this November, according to search firm Kenshoo, and Amazon blasted out its Black Friday come-ons even earlier than usual. Online retailers and shipping companies such as UPS and FedEx will be watching to see if this means that more shoppers are getting their shopping done early, or whether online shopping is set for historic growth, according to ChannelAdvisor CEO Scot Wingo, whose company develops e-commerce software.
If it’s the latter, customers could be in for a repeat of last year when shipping companies were overwhelmed by demand, and orders from online retailers like Amazon arrived late. FedEx and UPS say they’re ready this time and are working more closely with some online retailers to plan ahead.
One of them is the online sports retailer Fanatics, which makes more than 50 percent of its revenue in the fourth quarter alone. Before Thanksgiving, Fanatics held five meetings with FedEx to discuss its expected order volume, CEO Doug Mack recently told Re/code. FedEx guaranteed Fanatics a certain amount of shipping capacity, and starting from Thanksgiving, Fanatics execs will get on a call every day with the shipper to update them on projections.
Breaches, breaches, breaches
In the wake of last year’s massive security breach at Target, retailers know their systems will likely be targeted this holiday season. Next year, U.S. consumers will start getting more secure credit cards embedded with chips, and the adoption of safer data transmissions — called tokenization — should help slow down data thieves. But those advancements won’t help this time around. It’s also worth watching whether hackers will turn their attentions to online retailers as physical retailers lock down systems in other ways.
Brick-and-mortar stores doubling as warehouses
In an effort to combat Amazon’s quick shipping speed, retail store chains like Target, Best Buy and Walmart have started shipping some online orders directly from stores to slash delivery times. For example, Target’s online shoppers should soon start receiving orders on the day after they are placed for no extra charge, an exec said recently at a press briefing. The retailer is using 140 of its stores as mini shipment centers, and next-day deliveries will be free for customers who use Target’s Redcard or for non-cardholders who spend more than $50 on an order.
Walmart, Best Buy, Target and Toys “R” Us are among the retailers who also offer online shoppers the free option to order a product online and pick it up in store. Target is even experimenting with having the order waiting for shoppers at the curbside so they don’t have to enter the store.
If early-adopter retailers are successful, expect more companies to jump on board the ship-from-store and pickup-in-store trends.
Sites crashing on the biggest online shopping days
Walmart.com ran into trouble last year when its site buckled under the weight of the Thanksgiving and Black Friday crush. Part of the cause was an in-store promotion that drove people to register online to secure out-of-stock items. This year, fashion clothing site Net-A-Porter already crashed after launching a giant sale on Wednesday. Let’s see if Walmart.com and other big online shopping sites have learned anything from last year’s issues.
The mobile shopping explosion
Retailers love to cite growth in their mobile traffic to show they’re keeping up with the times. One problem: Shopping conversions on mobile phones are less than one percent on average, compared with around three percent on desktop, according to ChannelAdvisor’s Wingo. Mobile traffic crossed the 40 percent mark last year during the five days starting on Thanksgiving for those merchants who used ChannelAdvisor’s services. If those mobile traffic numbers increase this year, retailers need to be ready or risk losing more business to Amazon, which dominates with its one-touch checkout. Apple Pay could help Amazon competitors compete more effectively in mobile commerce.
On-demand startups partnering with brick-and-mortar shops
Expect some on-demand companies to pitch retailers on instant services such as delivering goods right away, or even free rides to the mall. I’d be shocked if we don’t see any retail tie-ups with the likes of Uber, Lyft, Postmates, Taskrabbit or Shyp.
For the last few years, some studies have argued that social media sites continue to have very little influence on online shopping. Will this be the year that the Facebooks, Twitters, Instagrams and Pinterests of the tech world prove them wrong? Industry observers will be watching Twitter especially closely, since it recently introduced a Buy button embedded in tweets as well as offers that can be claimed in a tweet and redeemed in a physical store.
This article originally appeared on Recode.net.
