- E-Commerce

eCommerce Trends to Watch This Holiday Season

Black Friday and the holiday shopping season are fast approaching, and customers know this just as well as retailers. Based on last year, between Labor Day and mid-November we can expect online customers to change their behavior by deferring purchases. As an industry, we have conditioned our customers to expect exceptional offers in the run up to Black Friday.

At SeeWhy, we track both conversions and shopping cart abandonment rates, and you can see this change in behavior in the data. Shopping cart abandonment rates normally average 70 percent, i.e. 7 out of every 10 people that place items in the shopping cart do not complete the transaction. But last year from Labor Day through November 15, the number of online sales fell by almost 56 percent compared with the volume for the previous month, and the shopping cart abandonment rate shot up, peaking at 83 percent.

But once holiday promotional offers were rolled out, the transaction volumes rose sharply, and the abandonment rate fell dramatically. You can see this in the graphs below.

Note also how the day of the week is very significant: During the weekends, customers were researching, not buying. The pattern of high shopping cart abandonment rates during the weekend is normal throughout the year as customers research online before potentially making a purchase during the week. However, this pattern was much more pronounced from mid-September through mid-November, reflected in a peak abandonment rate for the year.

What happened in mid-November, of course, was that Black Friday-specific promotions were being rolled out across the board, triggering seasonal buyingnot browsingbehavior and the ramp up to the peak on Cyber Monday.

Based on last years pattern, we should expect that, until the big Thanksgiving promotions get rolled out in mid-November, many customers will defer purchases, having become conditioned not to purchase online but to wait.

This reinforces what we have known for decades; promotions shift the timing of revenues and may not provide significant lift overall.

Well be monitoring both the discounting trends and the shopping cart abandonment rates through the rest of the holiday season, and it will be interesting to see whether the Holiday 2010 will be a rerun of 2009.