Holiday Online Revenue To Rise, But Average Order Values Fall


Holiday Online Revenue To Rise, But Average Order Values Fall




by  @lauriesullivan, September 14, 2018

Search marketing company NetElixir’s 2018 Holiday Forecast predicts overall economic growth of 15% — up from 13% in 2017, and 10% in 2016. Initial findings estimate that 62% of all product searches now occur on Amazon, and 30% of all mobile searches will be voice activated by the end of the year.


NetElixir Founder Udayan Bose attributes the increase to strong macroeconomic factors. Notably, the economy is expected to top 3% gross domestic product (GDP) for 2018, with a low unemployment percentage, wage increases, and consumer sentiment becoming more positive.


The latest report segments its forecast by retail categories, projecting an overall increase in revenue, but a slight decrease in average order value across all categories.


NetElixir complied its 2018 Holiday Forecasts based on the analysis of key retail search metrics and trends from its forecast customer ecommerce holiday revenue of about $600 million generated by some 320 million unique website visits across five main areas such as gourmet food, apparel and shoes, home decor, gifting, and consumer electronics. The estimates are for the holiday season, between November 22 and December 23, 2018.


Product listing ads are expected to drive 65% of total paid-search sales this holiday season. Many of the sales will occur on mobile, so NetElixir suggests that marketers ensure the mobile site loads in less than three seconds.


Orders will rise this holiday season, but the average order value may not. Since the beginning of the year, orders spiked in July and August at 19%, but the average order value fell 5%.


In the gourmet food category, the report estimates a 17% increase in revenue and a 17% increase in orders, but no year-over-year change for average order value.


The apparel and shoes category saw the biggest increase in orders. The report estimates a 19% increase in revenue, a 23% increase in orders, and a 3% decline for average order value. Home decor is forecast to rise 13% in revenue and 15% in orders, but expected to fall 1% in average order value. Gifting will rise 15% in revenue, 13% in orders, and 1% in average order value.


Consumer electronics will see the largest increase in average order value. The category is forecast to rise 15% in revenue, 17% in orders, and 2% in average order value.


This year, NetElixir projects Amazon will take 40% — about $38.8 billion — of holiday sales, up 35% from 2017. The estimate, which is based solely on NetElixir customer data, suggests Amazon will increase holiday sales by $9.4 billion. All other retailers combined are projected to make an additional $3.6 billion in holiday ecommerce sales this year.


 

MediaPost.com: Search Marketing Daily

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