This Could Be the Year: Online Will Outdo In‑Store Holiday Sales; Prime Membership Could Reach 90 Million
November 9, 2017
This holiday season, online retail could hit two big milestones: In the share of shopping going online over the holidays, and in Amazon’s ever-burgeoning Prime membership. Even with all this online growth, a new report says that when it comes to omnichannel retail, U.S. brands are not as forward-thinking as their international colleagues. We’ll take a look.
Online May Outpace In-Store This Holiday Season
While researchers and analysts differ on the particulars, all seem to agree that this holiday season will be one for the online retail record book. Just about every prognosticator is projecting that this holiday season, online sales will be worth more than in-store sales. Some specifics from Deloitte’s 32nd annual survey of consumers’ spending plans and a survey from The NPD Group include the following:
- Shoppers will generate more than $110 billion in online sales between November and January. (Deloitte)
- More than half, or 51%, of consumers expect to spend their holiday budget online. (Deloitte)
- Consumers plan to spend an average of $793 online, or 70 percent more than the $467 they plan to spend in stores. (The NPD Group)
Retailers’ omnichannel offerings are also blurring the line between online and in-store sales. In Deloitte’s survey, 43 percent of consumers said they expected to buy items online and pick them up in-store. So while consumers maybe going in-store, they’re not actually shopping there, making online retail an even more critical for engaging and converting consumers.
Prime Membership Hits 90 Million, Maybe…
Even as Amazon refuses to divulge the size of its Prime membership, researchers and analysts keep attempting to nail it down. Most recently, Consumer Intelligence Research Partners (CIRP) pegged Amazon Prime’s total membership at 90 million, which is a 40 percent year-over-year increase as of September 30th, reports Internet Retailer.
Now totaling about 63 percent of all Amazon customers, Prime members contribute significantly to Amazon’s online dominance. What’s more, Prime members are extremely loyal. Based on its survey, CIRP’s survey estimates that 95 percent of Prime members will “probably” or “definitely” renew their membership.
Other researchers think those numbers could actually be conservative. In a survey of 1,000 household shoppers ages 21 and over conducted by Market Track, 41 percent reported they were Prime members, reports USA Today. That’s the equivalent of 104 million members, based on 2016 population figures from the U.S. Census, which is 14 million more than CIRP’s estimate.
The actual shopping impact of Prime members could be less powerful than the numbers indicate. A Q4 2016 survey by Forrester found that 25 percent of consumers shopped using Prime in that last three months. In comparison, 60 percent said they had shopped at Walmart.
U.S. Retailers’ Lag Overseas Competitors in Click-and-Collect
Plenty of countries are outdoing the U.S. when it comes to the share of retailers offering click-and-collect services to buy online and pickup in store. In the U.K. 67 percent of retailers offer click-and-collect to their customers, whereas only 29 percent of U.S. retailers do, according to a study from Order Dynamics.
The study, which reviewed 1,000 websites in the U.S., U.K., Australia, Canada, Sweden, Finland, Norway, and the U.S., also found that U.S. companies also don’t promote their click-and-collect services very aggressively. Only 38 percent of U.S. retailers include any mention of click-and-collect services on their website home pages
The study also found that alerting customers that their pickup is ready is a challenge for U.S. retailers. Only 6.3 percent offer more than one notification method, such as text and email, whereas 17 percent of non-U.S. retailers offer two notification methods.
Prepping Retailers for Holidays 2022
Data & AI
How Interactive Experiences Can Upgrade Your Data Collection Strategy
With the sun setting on third party cookies, businesses are recognizing the need to revamp their data acquisition strategies. Customer relationships need to be...
Creating a Customer Value Exchange to Drive Better Personalization
This byline was originally posted on Forbes.com Some of the polish on retailers’ personalization strategies is starting to fade. While many retailers were focused...