As the holiday season inches closer, eCommerce store owners are gearing up for one of the busiest times of the year. Deloitte’s annual holiday retail forecast has some predictions for what we can expect, and while growth is still on the horizon, it’s not going to be as fast-paced as last year. But don’t worry—there are plenty of opportunities for online retailers.
Here’s a breakdown of what the 2024 holiday season might look like, based on Deloitte’s latest insights, and how eCommerce store owners can prepare to make the most of it.
Moderate Growth for Holiday Sales in 2024
Let’s start with the big picture. Deloitte is predicting that total holiday retail sales will rise between 2.3% and 3.3% compared to 2023. That’s a slight slowdown from last year’s 4.3% growth, with total sales expected to hit between $1.58 trillion and $1.59 trillion. Still, that’s a lot of money being spent!
So, why the slowdown? It all comes down to inflation. While inflation is easing, it’s a bit of a mixed bag. On the plus side, lower inflation means consumers have more buying power, which is great news for retailers. On the flip side, lower inflation can also mean less of a boost to the nominal value of sales, which is why the overall growth rate isn’t as high as in previous years.
For eCommerce store owners, this means that while sales are still growing, it’s going to be a lot more competitive this year. People may not be spending as freely as they did post-pandemic, so you’ll need to be smart about capturing their attention and dollars.
eCommerce Continues to Shine
Here’s the really good news for online store owners: eCommerce is expected to be the biggest driver of holiday sales growth. Deloitte predicts that online sales will grow between 7% and 9% this year, potentially reaching $289 billion to $294 billion. While this is slightly slower than last year’s 10.1% growth, it’s still a solid increase.
So why is eCommerce continuing to dominate? Shoppers are more comfortable than ever with buying online, especially during the holiday season when they’re looking for the best deals and convenience. Plus, after a couple of years of uncertainty, people have settled into new shopping habits, and online shopping has become the go-to for many.
For eCommerce business owners, this is a huge opportunity. While brick-and-mortar retailers may see slower growth, online sales will keep climbing. This means it’s more important than ever to make sure your site is ready to handle the holiday rush and that your marketing efforts are dialed in to attract as many shoppers as possible.
Consumers Are Feeling the Pressure of Rising Costs
While there’s optimism around holiday sales growth, it’s important to recognize the challenges many consumers are facing. Rising credit card debt and the depletion of savings built up during the pandemic could weigh on consumer spending this holiday season. People may be a little more budget-conscious, which means they’ll be looking for deals, and they might cut back on non-essential purchases.
How does this impact eCommerce store owners? Well, it’s all about offering value. Shoppers are likely to be more selective this year, so it’s important to showcase the benefits of your products and offer promotions that resonate with cost-conscious consumers. Highlighting sales, discounts, and bundles could be key to standing out and driving conversions.
Building Loyalty and Trust Is Key
While shoppers may be more cautious with their spending, this presents an opportunity for retailers to build loyalty and trust. According to Deloitte, loyalty will play a significant role in helping retailers succeed this holiday season. Consumers want to feel confident that they’re getting value for their money, and they’re more likely to stick with brands they trust.
For eCommerce store owners, this is your time to shine. Focus on building strong relationships with your customers by offering exceptional service, personalized experiences, and reliable shipping. Repeat customers are more valuable than ever during the holiday season, so nurturing those relationships can pay off big time.
How to Prepare for the 2024 Holiday Rush
With all of this in mind, how can eCommerce store owners gear up for the 2024 holiday season? Here are a few strategies to help you stay ahead of the curve:
- Optimize Your Website: Make sure your site is running smoothly and can handle an influx of traffic. Slow load times or a clunky user experience can turn shoppers away in seconds, so invest in any necessary upgrades before the holiday rush hits.
- Stock Up: With inflation impacting costs and supply chains still experiencing some hiccups, it’s a good idea to stock up on your most popular products early. Consumers don’t want to deal with out-of-stock messages during their holiday shopping.
- Focus on Mobile: Mobile shopping continues to grow year over year, and it’s a huge part of holiday shopping. Make sure your site is mobile-friendly, and consider optimizing your mobile checkout process to reduce friction.
- Run Strategic Promotions: Consumers are looking for deals this year, so think about running promotions that not only attract customers but also boost your average order value. Free shipping, bundled discounts, and limited-time offers are all great ways to entice shoppers.
- Boost Your Marketing: The competition for holiday sales is fierce, so you’ll need to make sure your marketing is on point. Consider increasing your ad spend during peak shopping times, and don’t forget about email marketing—it’s one of the most effective ways to reach your customers directly.
- Leverage Social Proof: Shoppers are looking for trust signals more than ever, so showcase product reviews, customer testimonials, and any trust badges you have on your site. This will help build confidence in your brand, especially for new customers.
- Prepare for Last-Minute Shoppers: Every year, there are those last-minute shoppers who wait until the final days to make their purchases. Be prepared to cater to them by offering expedited shipping options and promoting any holiday sales you’re running.
The Role of Inflation in Holiday Shopping Behavior
While inflation is easing, it’s still a factor that will impact how consumers spend their money this holiday season. As Deloitte, noted, inflation can act as both a headwind and a tailwind. On one hand, lower inflation means that consumers have more purchasing power. On the other hand, it also means that the dollar value of sales may not increase as dramatically as in previous years.
This delicate balance means that eCommerce retailers need to be smart about their pricing and promotions. You don’t want to price yourself out of the market, but you also need to maintain profitability. Offering competitive pricing, especially on key products, can help you attract cost-conscious shoppers without sacrificing your margins.
Conclusion: Seize the Holiday Opportunity
While the 2024 holiday season may not bring the same explosive growth as previous years, eCommerce store owners are still in a prime position to succeed. With online sales expected to grow by 7% to 9%, this is a huge opportunity to capture consumer attention and drive revenue.
By optimizing your website, running smart promotions, and focusing on building trust and loyalty with your customers, you can position your eCommerce store for a successful holiday season. Remember, shoppers are looking for value this year, so make sure you’re meeting their needs with great deals, a seamless shopping experience, and reliable service.
The key takeaway? Even with some economic challenges in the mix, the holiday season is a time of opportunity for eCommerce businesses—so get ready to make the most of it!
(This blog post is based on insights from Deloitte’s annual holiday retail forecast, which you can find here).
Scott Sanfilippo began his eCommerce journey in 1994 by co-founding one of the Internet’s first online retailers, TheFerretStore.com, which was acquired by PetCo in 2006. In 2001, he co-founded the eCommerce design and marketing firm Solid Cactus, which was acquired by web.com in 2009. Today, Scott is the General Manager of Your Store Wizards and lives in Delray Beach, FL. Scott can be contacted at scott@yourstorewizards.com.