Retail Unwrapped - Adobe 2018 Holiday Predictions

HOLIDAY PREDICTIONS | 2018
METHODOLOGY
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Most comprehensive report of its kind in industry
Based on analysis of aggregate and anonymous data via:
• Daily revenue model based on analysis of more than 1 trillion visits to the U.S. based on retail websites
• Product and pricing insights based on analysis of sales of more than 55 million unique products
• Companion research based on survey of 1,000+ U.S. consumers in October 2018
• Adobe Analytics measures transactions at 80 of the top 100** retailers on the web in the U.S.
Adobe Advertising Cloud
** Source: Adobe Analysis of Internet Retailer 2018
Adobe Experience Cloud Adobe Analytics Cloud

Key Findings
Online Holiday Retail Approaching $125B
• Over 1 dollar in 6 of retail will be spent online
• Faster online growth will eat up share vs. offline
• Faster growth on holidays will concentrate sales on those days
• Max days between Thanksgiving and Christmas will boost sales
Retailers Must Adapt to New Retail Rules
• Smartphones alone will be half of traffic, and a quarter of dollars
• Getting phone checkout right could mean $9 billion
• Serve your mobile app users: they will be even more valuable
• Online is not enough: storefronts will give retailers an advantage
• Pickup in store and fast shipping will be growing consumer asks
• Think beyond last-touch: 30% of people will use voice for some
shopping behaviors
• Shoppers from social are spending less, consumer trust eroding
Consumers Can Win Under the New Retail Rules
• Look inside for the hottest toys to buy…
• … and when the best moments are to buy them!
• Expect to spend a lot of time shopping –
enough to build a quarter of a pyramid
• Stay home on Thanksgiving – use your smartphone
• Spend on yourself: $1 in $7 is on gifts for the buyer
• Give experiences – they will be in demand this year
• Don’t be embarrassed about where you shop
(at least you aren’t shopping during a wedding)
• Know the best toys, speakers, TVs and consoles to give
• Don’t forget to work off the 100 million calories of eggnog

Online Holiday Shopping Season Approaches $125 Billion
Online holiday shopping (Nov-Dec) revenue in the U.S. is
projected to be $124.1B in 2018, 14.8% more than online
holiday spending in 2017.
• Since 2016, online holiday season revenue growth has
been increasing, attributed to strong consumer confidence.
• Online revenue growth during holiday continues to
outpace overall retail growth (14.8% online vs. 4.5%
overall*).
• Nearly 1 dollar in 6 of retail will spent online in 2018**.
Just how much money is $120B?
You could fly nearly 500K people into space via Virgin Galactic.
Methodology
* The National Retail Federation estimates overall holiday retail will increase between 4.3% and 4.8%
**The NRF Estimates ~$720B in total holiday spending this year, online and offline.
S U R V E Y S AY S
Consumers say they’ll spend
57% of their holiday budget
online, up from 55% last year.

Thanksgiving Weekend Growth Outpaces Season
Thanksgiving weekend* online revenue growth will
outpace holiday daily averages
• The Thanksgiving weekend, from Thanksgiving to
Cyber Monday, will generate $23.4B or nearly $1 in
$5 (19%) of online holiday shopping.
• Cyber Monday is set to remain the overall leader
with both the highest predicted revenue ($7.8B)
and fastest growth (17.6% year-over-year).
Glossary
*The Thanksgiving shopping weekend is Thanksgiving Day through
Cyber Monday
S U R V E Y S AY S
44% of consumers prefer to do
their online holiday shopping
on big days like Black Friday
and Cyber Monday.

Holiday Boosted by More Days Between Thanksgiving & Xmas
Retailers can thank the calendar for a revenue boost this year, since there will be 28 days between Cyber Monday and
Xmas, compared to last year’s 27.
• With the longest time possible between Cyber Monday and Christmas, holiday spending will ramp up as early as possible
this year, resulting in $284M of value for retailers.
• Consumers spend on average 26% more on the days after Cyber Week compared to the days prior.
• Every day is going to be a $1B dollar day, except for Dec 22nd, 24th and 25th.
Glossary
Pre Cyber-Week: Nov 1st – Nov 17th.
Post Cyber-Week: Nov 28th – Dec 31st

Three hours on Cyber Monday (7pm – 10pm PST)
will bring in as much revenue as an average day.
• The average visit to an online retailer during these
hours is worth $9.
• Conversion rates reach their yearly peak at 7.3%.
• Over a quarter of revenue came from
smartphones during these hours.
The Golden Hours Of E-Commerce: 7pm-10pm PST on Cyber Monday

Consumers in Larger Cities Prefer Cyber Monday over Black
Friday
In 2017 Holiday, 7 out of 10 cities had larger online retail sales on Cyber Monday compared to Black Friday.
• When Cyber Monday won, online sales average 20%+ higher than on Black Friday.
• Cyber Monday winning cities have the following characteristics –
• They are twice as large as losing cities
• They are 10% less dependent on smartphones to drive revenue
• They have a 20% higher revenue per visit overall

Almost Half of Retailer Visits Will Come from Phones Alone
Shoppers will use smartphones more than any other device
this season
• Smartphone visits will continue to steal share from desktop
visits this season (48%), and drive close to one third of
purchases (27%).
Out of the three big days shoppers will be the most mobile
on Thanksgiving
• Thanksgiving:
• 35% smartphone revenue, 53% desktop
• Black Friday:
• Cyber Monday:

Retailers can increase their total holiday season revenue by 7.3% if mobile checkout is made easier.
• This is equivalent to earning a second Cyber Monday.
• The last purchasing step, from cart to order, happens over 20% less often on smartphones compared to desktop.
Smartphone Devices Hold a $9B Potential For Retailers This Season

Mobile App Shoppers are 2X More Likely to Convert
Overall conversion on mobile apps is 2X that of their website
counterparts. This higher conversion is correlated with…
• 2.4X time spent
• 30% better content relevancy
• 25% better return frequency
3X as many Mobile App Shoppers have made a purchase
recently compared to traditional web shoppers.

Tablets are losing their niche screen position between smartphones and laptops
• Laptops have gotten on average 1” smaller, while smartphones have gotten on average 1” larger.
• Share of visits from tablets has decreased by 30% in the last 4 years.
Bigger Smartphones & Smaller Laptops Leave Little Space For Tablets
S U R V E Y S AYS
Half of consumers say they have a
5-inch or bigger screen, up from
40% in 2016.

Recurring* Customers Abound in Large and Pure-Play** Retailers
Online-only stores will rely more on recurring customers
• Brick-and-click retailers see 28% higher online conversion
• Large, pure-play retailers see 40% more of their revenue
share coming from recurring* customers compared to their
brick-and-click† counterparts.
Smaller retailers rely more on new customers
• Retailers with less than $100M in yearly online revenue see
a much smaller share of their revenue coming from
recurring customers.
Glossary
*Recurring customers: customers with at least 2 previous orders
**Pure play: retailers that don’t have any physical stores
†Brick-and-click: retailers that have an online store, and physical locations.
S U R V E Y S AYS
47% of shoppers have visited a
store to browse a product they
intend to buy online in the future.

Buy-Online-Pick-Up-In-Store is Outpacing Other Retail
BOPIS orders have more than doubled since January (+119%)
Top retailers (75th percentile) have seen 3.5X growth since January.
Retailers need to up-sell-in-store
• BOPIS baskets tend to contain few items (1.9 vs 2.7 units).
Glossary
†Brick-and-click: retailers that have an online store, and physical locations.
S U R V E Y S AY S
People are roughly as interested in
picking up in-store as they are
getting 1-day shipping, if they are
buying a last-minute gift.

Voice Assistants Augment the Shopping Experience
While not many smart speaker owners commit to placing orders over their device, they use them heavily
to create lists, compare prices and initiate their product search.

Volume Coming From Social is Growing, But Its Quality Suffers
The social marketing channel is inserting itself into
retail through sheer volume.
• Share of traffic coming from social channels doubled
in the last two years.
• The value of each social visit has decreased by 11%
over the same period.
• Retailers are capitalizing on their loyal customers
who go straight to their website.
• Direct visit value has grown over 30%.
Glossary
Visit Value: Revenue Per Visit
Referring Domains: shopper helper sites like RetailMeNot
S U R V E Y S AYS
25% fewer consumer consult
social media for gift ideas
compared to two years ago.

Ads Are Move Valued During the Holiday Season
Display Ad CPMs rise about 11% a week, through the Cyber shopping week, and taper off as shipping cut off
dates pass.
Ranking of Advertising Prices by Region
(Thanksgiving – Giving Tues, Most expensive to least)
1. North East
2. South West
3. West
4. Mid West
5. South East

Good News– Elections Are Only a Blip Consumers
Heading into the Holiday Season and Midterm elections, we wanted to quantify the effect of elections on E-Commerce –
• Bit of softening in total visits the day after the election (-6%), but visits restore by Friday (+8%).
• RPV on smartphones dips 15-20% on election day suggesting more browsing and lower conversion, but again recovered by the
weekend.

The biggest advantage of the retail juggernauts comes from consumers’ basket sizes
• The retail giants shared a similar conversion to their smaller counterparts, only ~3% difference.
• Consumers make purchases that are 30% bigger at the large ($1B+) retailers’ websites.
Large Retailers ($1B+) Benefit From Large Baskets, Conversion is the
Same Across the Board
Glossary
Recurring customers: customers with at least 2 previous orders

Customers will spend the same amount over the first 6 months whether
they’re acquired inside or outside the holiday season.
Holiday customers are just as likely to return to a retailer’s website as the ones acquired
throughout the rest of the year.
Customers Acquired in the Holiday Season Have the Same Long Term
Value As Average Customers

Consumers Spend More On Shipping, And Return Their Purchases 18%
More Often During the Holidays
Consumers spent 5% more on shipping, and returned their
purchases 18% more last holiday season compared to the rest of the
year.
+5%
more was spent on shipping
+18%
more purchases returned
S U R V E Y S AY S
Consumers returned 10% of the gifts
they received last holiday season.

Consider Staying Home on Thanksgiving Day
More and more retailers are opening
later or just staying closed on
Thanksgiving Day.
More and more people are skipping
shopping on Thanksgiving in person, but
are shopping on their phones.

Feel Free to Spend on Yourself
People consistently say about 13% of what they spend during the holidays is on themselves.
Though, of course, some people spend a little bit more.

Unwrap The Gift of Experience This Holiday Season
Retail isn’t the only industry thriving on Black Friday
and Cyber Monday
• Consumers will also shop for experiences on these
key dates, evidenced by lift in revenue on airline,
cruise, and hotel sites.
• Cruise companies saw over 6X more revenue on
Cyber Monday compared to the average Monday in
2017.
S U R V E Y S AYS
One third of consumers plan to
spend more on experiences than
things as gifts this Holiday Season

Don’t Be Embarrassed – People Shop in Strange Places
At least you didn’t shop while at a
wedding!

Think About How and When to Buy the Hottest Items
The hottest items will be going fast
1% of products drive 54% of online sales on average, but increase to 70% of sales during the holidays (30% lift).

Video Game Consoles… A Retro Showdown
Video game consoles pick up on nostalgia
• Nintendo sold more consoles last season than
XBOX and PlayStation combined, accounting
for 58% of all video game consoles sold.
• Nintendo’s success was driven by The Switch
which made up nearly two-thirds (63%) of all
Nintendo consoles sold.
2018 Holiday Top Product – PlayStation Classic
• Sony is following in Nintendo’s footsteps and
bringing back its original PlayStation console.

The Season of Smart Giving
Sales of smart speakers will surpass conventional speakers this
season
• Nearly half of speakers sold last holiday season had smart
assistance enablement, 33% YoY growth from 2016 holiday.
Nearly 50% of consumers will own a smart speaker after the
holidays
• 32% of surveyed consumers already own a smart speaker,
and 16% more are planning on getting one in the upcoming
holiday season (ADI 2018 US Voice Assistant Survey).
• 45% of consumers who own a smart speaker are planning to
purchase another one for themselves in the upcoming
holiday season (ADI 2018 US Voice Assistant Survey).

4K TVs Will Reign This Holiday Season
Nearly all TVs sold this Holiday will be 4K
• 83% of TVs sold during Holiday 2017 were 4K,
45% YoY growth. We can expect this trend to
continue as 4K is now the standard.
Wait until Thanksgiving Weekend to get the best
deals on 4K
• Shoppers for 70”+ 4K TVs can save 25% during
Thanksgiving weekend.

Top Products: Toys
Holiday Newbies Holiday Veterans
Fingerlings, LoL Surprise,
Hatchimals Hatchibabies
Lego Sets (HP Great
Wizard Hall)
Ride-Ons (Jurassic World
Jeep)
furReal Pets
Pomsies, Grumblies,
Scruff-a-luvs
Arcade1UP, Sony
PlayStation Classic
Super Smash Brothers
Ultimate
Fortnite Monopoly

Retail Unwrapped - Adobe 2018 Holiday Predictions

Retail Unwrapped - Adobe 2018 Holiday Predictions

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