The holiday time is when most advertisers are spending, retailers are profiting, and consumers are buying. According to the National Retail Foundation, last year during the holiday season retail spend was up 4% from 2015, totaling $658.3B. A number that actually exceeded the NRF’s initial expectations for the holiday season.
“These numbers show that the nation’s slow-but-steady economic recovery is picking up speed and that consumers feel good about the future,” NRF President and CEO Matthew Shay said. “Retail mirrors the economy. And while there might have been some bumps in the road for individual companies, the retail industry overall had a solid holiday season and retailers will work to sustain this in the year ahead.”
Because the holiday season is a tremendous opportunity for sales, it is a time where advertising peaks in order to drive those sales. As a result of the holiday ad spend fury, Facebook IQ was developed to provide insights to marketers on consumer shopping habits and behaviors from previous years so that advertisers can capitalize off the data to adjust their marketing campaigns for maximum effect. Advertisers can better understand consumer behavior and have an idea of what to expect this year based on previous data.
Interestingly, Facebook found that mobile first shoppers grew 30% from 2015 & 2016 and that 53% of conversions were on mobile last year. The data points to the fact that mobile needs to be a primary focus for advertisers in order to align with user behavior. This data is very similar to the data that Adobe Analytics put out that stated for the first time this year more purchases will take place on mobile than on desktop. Adobe calculated an estimated 54% of purchases will take place on mobile, taking a slight lead on the Facebook IQ data from the previous year.
According to Recode, Adobe Analytics also predicts that Cyber Monday will be the most profitable shopping day, with sales totaling $6.6 billion which would be 16.5% more than last years’ profits. Adobe Analytics also forecasted that $19.7B will take place between Thanksgiving and Cyber Monday.
In response to the Cyber Monday hype, consumers plan ahead to find the best deals and quite a bit of research is done on mobile.
“In fact, the Sunday before Cyber Monday last year was the highest mobile traffic day of the entire year on our platform, as consumers were researching products and hunting for the best deals,” said Marcus Startzel, general manager of North America at Millennial Media, Baltimore, MD. “Advertisers have noticed the increased role mobile plays in the shopping experience, and are responding by shifting spend from traditional channels.”
With the emphasis on mobile this year, retailers will need to make sure that users have an optimized mobile experience that is engaging, enticing, and easy to use. Never before has the mobile experience been so crucial to retailers and so key in driving revenue. Banner ads, rich media, and mobile video will all be part of the holiday ad season to attract shoppers and maximize profits during the holiday season.
This year, no one can afford to minimize the role of mobile – it will be the predominant ad device and ultimately the primary source of retail spend.