Well, Thanksgiving dinner is over and as I sit here, after having eaten way too much Turkey and way too many deserts, it is time to ponder the online holiday season that is just minutes away from kicking off. Actually, it seems in many ways it has already started. Things used to be simple...and defined. We had Black Friday and Cyber Monday. But now, many retailers have turned this week into "black Friday week" with aggressive discounts all week long. I remember reading an article a while back where many prominent retailers said there wasn't going to be the deep discounting that we have seen during prior holidays. We will see if they can hold out. From the looks of things so far, I doubt it.
All of us that work in and around e-retail are being asked about our predictions for 2009 holiday sales online. Here are my predictions.
Overall, I’m cautiously optimistic and think sales will be up. And I say that for a few reasons.
1. Everyone’s being a lot smarter about inventory, and e-retailers always have a leg up when it comes to inventory because they can leverage so many different warehouses, while a brick and mortar store has more limited inventory. Those who have bought well will do better both online and offline, but the lack of inventory offline will help online retailers this year.
2. H1N1 paranoia will send more people online to do their shopping. What better way to avoid nasty germs (except for those in your own house or office...and of course those computer viruses) than by shopping online? That reminds me of a story about my grandmother. Thanksgiving seems like a good time for a story. Many years ago, back in the mid to late 80's, when we first started hearing about computer viruses there was a widely publicized computer virus. At that time I was working in technology at National Bank of Detroit. My grandmother calls me and is all worried, wondering if I am sick. She was even ready to bring me some chicken soup. I told her I wasn't sick, and she said, "but I heard on the news about that awful computer virus and I know you work with computes all day". Aren't grandmothers great!
3. For the first time last year, we saw price had a big impact on satisfaction. In previous years, it was interesting that that despite e-retailer’s assumption that people cared only about price, there were actually other elements of the online shopping experience that impacted them more. We were able to find this out using the powerful technology of the American Customer Satisfaction Index (ACSI) and prove it to be true with the data. But last year, with the recession, we saw that change and price became a key driver of satisfaction. Retailers are jumping on discounting early and they know they need to slash prices to attract customers.
4. Recession fatigue. We’ve been in this recession for more than a year. Those of us that have jobs who have been saving money and watching spending may be tired of being so careful and may be a little more willing to spend money this year. Maybe some of the pessimism is finally lifting. I wouldn’t say we’re jumping for joy, but maybe we’re hopping for mild excitement. And what a better time to show that mild excitement then during the holiday season.
5. When we look at years of satisfaction trending data, we see that customers are as satisfied today as they were six months ago and a year ago, after sat took a huge dive last September. Since satisfaction as measured by the ACSI is predictive of online and offline purchases, if satisfaction is keeping steady into a Christmas season, we would expect to see sales go up this holiday season.
So what are your predictions?
