The negative attention social media has garnered this year is starting to impact retailers, but it won’t be enough to dent sales in the upcoming holiday season.
According to technology firm Adobe, social referral traffic will generate 11 percent less revenue per visit in the final three months of the year compared with the fourth quarter of 2017. It is the only marketing channel to see a decline in RPV, despite the increase in referral traffic coming from social.
Shoppers are expected to consult social media sites 25 percent less for gift ideas this year and Adobe attributes all of this to consumers’ weakening trust in social networks.
“We’ve seen a lot of events in the news lately where consumers have observed things that might have shaken their trust in social networks so they might be less likely to transact through the social network,” said Taylor Schreiner, director of Adobe Digital Insights.
Nevertheless, thanks to other marketing channels, it’s not set to hurt online sales, with Adobe forecasting it will reach a record $124.1 billion this season, around 15 percent higher than a year earlier. In contrast, the National Retail Federation has predicted that off-line retail spending is expected to increase a modest 2.7 percent.
However, it stressed that just being online is not enough as storefronts will give retailers an advantage, with consumers wanting the option of being able to pick up in store. Shoppers who visit a retailer’s online site are 28 percent more likely to make a purchase if they also have a physical storefront.
“As online shopping surges with another record-breaking holiday season, the retailers with compelling web sites coupled with physical store locations will have the advantage,” said John Copeland, head of marketing and customer insights at Adobe.
“Many shoppers want to interact with retailers’ products and the brand in-store, and the ability to pick up online orders in-store within a matter of hours can’t be underestimated.”
A breakdown of the data showed that Thanksgiving sales are expected to increase by 16.5 percent, generating $3.3 billion, while Cyber Monday will become the largest- and fastest-growing online shopping day of the year with $7.7 billion in sales, a 17.6 percent increase from last year.
Online sales between 7 and 10 p.m. Pacific Time on Cyber Monday are expected to drive more revenue than an average full day in 2018. Nearly $1 out of $5 this holiday season will be spent between Thanksgiving Day and Cyber Monday, generating $23.4 billion, or 19 percent, of total online sales.
This came as consultancy AlixPartners is forecasting that online marketplace sales could be as high as $338 billion to $341 billion this holiday season in the U.S., a $10 billion to $13 billion increase in online marketplace sales versus last holiday season.