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Holiday Shopping Season Promising for Retailers in Tune with Shopper Habits

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Holiday shopping predictions are out and customer spending habits are looking up for retailers. This year, holiday sales are expected to see a 5.7% year-over-year increase to $885.70 billion — the largest jump since 2011’s 6.3% rise and just what the industry needs after first half challenges.

Customers were more frugal during 2014’s holiday season, but this year, shoppers are expected to increase their spend thanks to increases in wages, decreased unemployment and a greater willingness to spend in categories other than gas, for which prices have dropped substantially. Much of this shopping will take place through online stores, as ecommerce is expected to claim a larger portion of total retail purchases. While ecommerce drove 8.3% of sales in 2014, its share is predicted to increase to 9% for the upcoming season.

Despite this, don’t expect customers to open their wallets without having done their due diligence with online research and pricing comparisons. Omnichannel trends and a rapid increase in mobile shopping will play a major role in shaping customer behavior and, therefore, impact how top retailers should strategize.

This year, mobile commerce has captured nearly 30% of the total U.S. ecommerce sales and is projected to reach $104.1 billion by the end of the year. By 2016, experts see this number increasing rapidly at a rate 300% faster than the rest of the ecommerce industry.

“As U.S. consumers become more comfortable with conducting a litany of activities with their smartphones, fewer people are putting down the phone to make a purchase using another device,” eMarketer analyst Monica Peart said in her holiday season predictions. “Consumers are opting to complete their transaction with the same device they began the shopping journey with, and that is increasingly with a smartphone.”

Aside from the purchases people are making on their mobile devices, 75% of customers use their mobiles to compare prices and research products in-store, including the two-thirds of Pinterest users who browse pins while walking the aisles. For the approaching holiday season, mobile will likely continue its massive impact on the overall ecommerce outlook, from top-of-funnel acquisition to conversion. Expect customers to use their mobile devices to increase efficiency throughout the holiday shopping process, including looking up gift ideas and comparing prices while they are already in store.

Customers have also embraced another trend: store pickup of online orders. In August 2015, 30% of shoppers picked up online purchases in-store. Of those shoppers, 62% used in-store pickup to save on shipping costs, while 17% did so to get their products immediately.

Indeed, brands that have already embraced in-store pickup have reaped the benefits. Home decor retailer Kirkland’s reports that shoppers who pick up their online purchases spend nearly twice as much as those who opt for home delivery. In response, Kirkland’s has revised its supply chain model, choosing to cut the number of items available online by one-fourth over the last year. By streamlining their inventory, Kirkland’s can guarantee most items are in stock for pickup without breaking a sweat.

In addition to this increase in average order size, in-store pickup also opens opportunities for brand exposure among online shoppers. When standing in line might be the only in-person experience a customer has with your brand, it is vital to make pickup as smooth as possible, offering superior customer service and strategic merchandising around the package pickup area.

As the holiday rush approaches, SMBs should prepare for longer customer service lines and be proactive about staffing. In fact, 60% of shoppers already report some sort of negative experience when picking up their products, mostly because of long wait times.

As with each holiday season, the stakes are high among retail competition. In order to compete with big brands and online marketplaces, SMBs must start their holiday season planning now and keep customer spending habits and shopping desires top-of-mind. Consider how this year’s mobile trends fit into each part of your marketing and product strategy, whether it’s updating omnichannel offerings, optimizing responsive designs or adding filtered search capabilities. Each step made to minimize the chaos of holiday shopping for your customers will increase your holiday revenue.

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