November 18, 2016, 4:59 PM

Retailers brace for Black Friday e-commerce

Online spending is headed higher, as usual, and the Black Friday weekend sets the pace for the holiday season.

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Predictions and projections abound on holiday e-commerce, but come Black Friday, the data starts to fill in the blanks and determine the direction of the shopping season.

Despite a jolting downturn immediately after Election Day, online retail spending is ramping up ahead of the five-day shopping stretch that starts on Thanksgiving and runs through Cyber Monday, the Monday after Thanksgiving. The question is, how much will consumers increase their online spending?

If online spending trends continue as they have throughout 2016, it could be a good season for e-retailers. Online retail sales reached $93.67 billion in Q3, a 15.6% increase compared with the same time last year, the U.S. Commerce Department reported Thursday. But Adobe Inc. on Thursday lowered its forecast for e-retail growth during the November-December holiday season to a single-digit percentage increase from an 11% increase. The change comes as online sales totaled $15.5 billion for the two weeks of Nov. 1-14, up only 1.35% over last year and $800 million short of Adobe’s pre-election prediction. Adobe says its marketing software tracks 80% of online transactions at the top 100 U.S. retailers and 75% of spend with the 500 leading e-retailers.

 But others doubt the Election Day online sales dip will persist as the holiday shopping season picks up. “Among our top 10 online retailers, overall, sales over the past 30 days are up 17% since the same period last year,” says a spokeswoman for e-commerce analytics provider Slice Intelligence. “We did see people push the ‘pause’ button the Wednesday after Election Day, but sales seemed to recover. We would not say there was a big lasting impact on sales due to the election.”

General merchandise e-retailer Shop.com, No. 59 in the Internet Retailer 2016 Top 500 Guide, expects to at least double its holiday sales this year compared with 2015, and that’s saying something. Last year the company increased sales 200% year over year, chief marketing officer Peter Gold says. One way the company has been successful in accelerating holiday sales is by releasing Black Friday promotions earlier. In 2015, Shop.com released holiday promotions the Monday of Thanksgiving week. This year, the company launched its holiday sales Nov. 14.

“We’re already seeing tremendous success by giving customers the choice to shop earlier,” Gold says. He didn’t specify dollar figures, says sales have grown each day this week compared with the day earlier.

Marketing multiplies

Retailers have been marketing Black Friday deals for weeks already, and Black Friday doesn’t just refer to the day after Thanksgiving any more. Some retailers were referring to “Black Friday pricing” as early as September, according to digital marketing vendor eDataSource.

In the 30-day period that ended Nov. 14, there were 13% more Black Friday-themed emails than there were during the same period a year earlier, based on an analysis of the email activities of 50,000 brands, according to eDataSource.

For instance, on Nov. 11, Amazon sent an email with the subject line “Countdown to Black Friday Deals Week from Amazon Exclusives” that had a 38.4% read rate (the read rate refers to an email being opened for at least 8 seconds). A Nov. 8 Tommy Hilfiger email featured the subject line “Black Friday Presale. Entire store savings start tomorrow.”

More retailers are sending Black Friday-themed emails because they work, according to eDataSource’s analysis. Roughly 15% of the Black Friday-themed emails had a read rate exceeding 20% in 2016, versus 11% in 2015.

In eDataSource’s 30-day analysis window, no retailer sent more Black Friday-themed emails than Amazon—it sent 35 campaigns. Wal-Mart Stores Inc. (No. 4) sent 27 campaigns.  

It isn’t just that retailers are sending more Black Friday-themed emails, they’re sending more emails overall, according to email marketing firm Listrak. For instance, the highest email sending volume day so far this season was Friday, Nov. 11, which was both Veterans Day in the United States and Singles’ Day in China (and, to a lesser extent, throughout the world).

The Nov. 11 email volume was 5% greater than last year’s Thanksgiving Day volume. For the sake of comparison, retailers in 2015 sent 26% more emails on Thanksgiving than they did on Nov. 11, Listrak says. And those Nov. 11 emails drove more sales this year: They produced a roughly 20% increase in order values compared with Thanksgiving Day 2015. Thanksgiving Day emails drove 45% higher order values compared to Nov. 11, 2015.

Shipping it out

The three major shipping carriers expect to handle record package volume this holiday season, with the U.S. Postal Service predicting it will handle 750 million parcels this holiday season, up 12% from the 2015 season. United Parcel Service Inc. projects it will deliver more than 700 million packages in November and December, up 16.7% from 600 million, and FedEx Corp. expects a 10% jump to about 385 million packages from 350 million a year ago.

Free shipping is always a key incentive for online shoppers—53% of consumers in the third quarter call it the most important factor when making an online purchase, according to comScore. Yet the percentage of e-commerce transactions with free shipping is on the decline this year at 60% in Q3 compared with 69% in the same period last year, comScore says.

Salesforce Commerce Cloud’s Q3 2016 Shopping Index, which analyzes the activity of more than 500 million shoppers worldwide, finds that 67% of online orders in Q3 in the United States and globally involved free shipping, up from 65% in Q3 2015. The index previously was called the Demandware Shopping Index, and reflected transactions by retailers that used Demandware’s e-commerce platform technology. Salesforce bought Demandware earlier this year.

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