The smart money is betting that online sales will emerge as the shining star of this holiday season. The National Retail Federation is forecasting that 44% of all holiday shoppers will make an online purchase this year, up from 42% last year.
Deloitte recently predicted a 15% gain in non-store sales, with two-thirds coming from online channels. And a spokesperson for comScore, which plans to release its official forecast in the next few weeks, says its preliminary estimates are looking at growth in the 7 to 9% range for November and December.
Marketing Daily asked Cathy Halligan, SVP/sales and marketing for PowerReviews and the former CMO of walmart.com, to weigh in what will shape those gains:
Q: How has online shopping changed since last year?
A: The fundamentals haven't changed. The customer still wants to know if you have the product she wants, at the price she wants, and that it's in stock, easily available, and that she can check out in as few clicks as possible. And she wants fast delivery. Sites like Amazon, with two-day delivery, and Diapers.com, with same-day delivery, are setting the bar here. What has changed is the modes that influence her. Last year, for example, mobile technology was just interesting. This year it really matters.
A: The adoption rates for smartphones are far above estimates -- some studies say as much as 19 percentage points over last year. I don't think people are transacting much on their phones, but they are using them for research. They're checking reviews while they are in stores, for example -- asking, "Should I buy this one, or that one?"-- and checking prices, especially with location-based technology.
Q: What about Facebook?
A: Again, we don't believe it was a factor last year, but it will be this season. Smart marketers -- Delta, for example, and Procter & Gamble -- are already experimenting with how customers can transact on Facebook, and that makes such sense. There are half a billion people there, and they are on everyday. They notice which brands and stores their friends like.
Q: Your company drives reviews on Facebook?
A: Yes -- 81% of online consumers are using reviews when making purchases. Our solution offers a way for a consumer to write a review that pushes it onto their Facebook stream, so their friends can see it. That's because reviews from other consumers like me are especially influential. If I'm a mom with two kids in diapers, I want to know that other moms like me say this diaper doesn't leak overnight.
If I'm looking for a romantic restaurant to celebrate my 15th wedding anniversary in San Francisco, that's a different recommendation than a place for a romantic first date. We know consumers prefer reviews from shoppers who are like them -- they even like them better than expert reviews.
Q: So why is that better than a company having a Facebook page?
A: I'm a big Trader Joe's fan, although its Facebook page doesn't do much. But my sister recently reviewed a Trader Joe's spanakopita that she got all seven of her kids to eat -- that's more credible to me.
Q: What do you think of Walmart testing its own Groupon concept?
A: I'm so intrigued by this idea of making old ideas new again. Groupon, flash sales ... these are nothing more than deal-of-the-day offers reincarnated. It's just with technology, they're on steroids. And while lots of sites are having success -- ideeli, Yelp, Open Table, Gilt, even Amazon's Gold Box -- this is an old idea. And for Walmart, a price leader, known so well for its rollbacks? I think they'll be very good at it.
Q: Are these group sales changing online shopping?
A: In some ways, yes. The old concept of deal of the day was completely in the service of the retailer -- you'd put your loss-leader out there to bring people in. Groupon, which is up to something like 12 million users, does that all in the service of the customer.