With Halloween fast approaching, estimates for the 2006 holiday season are beginning to surface. This week, Jupiter research released their Online Retail Holiday Forecast 2006, estimating that online holiday retail sales will grow to $32 billion, an 18% increase over last year. The number of online shoppers, however, is only expected to increase 6%, to 114 million Americans. Analysts at Retail Forward predict that hot retail items will be Playstation 3, iPods, 3G phones, computer accessories, and the unbearably cute T.M.X. Elmo. Jupiter estimates that 37% of online holiday purchases will be made after the ground-shipping deadline, and consequently advises e-tailers to push back shipping deadlines to help consumers appropriately plan their holiday shopping.
In other words, the holiday season will be driven by people with more money to spend, who probably bought something online last year, are interested in consumer electronics, but will put off shopping to the last minute… Let’s see… tech-savvy, disposable income, lazy… sound like anyone?
Shop.org calls them “Digital Millennials”, aka Gen-Yers, or everyone on Facebook. Though the Jupiter study doesn’t directly announce the link between end-of-the-year spend and Generation Y, it’s not hard to see a correlation. 14 – 24 yr olds have literally grown up with computers, and now most of them come with extra money to burn on technologies that keep them connected. ZDNet does a fascinating review of the Resource Interactive’s “Decoding the Digital Millenials”, a report generated from “an eight-week study of the habits and mindsets of the digital millennials.” Resource Interactive estimates that Gen-Yers have “$200 billion in annual direct spending power” of which “15 – 17% is spent online”. Furthermore, Resource Interactive estimates that 14-24 year olds consume 20 hours of media on a daily basis, within a seven hour period of time. Between the chatting online, browsing the Internet, talking on the phone, watching TV, playing video games, texting and more, digital millennnials are the first age group to turn multitasking into a multibillion dollar market. From ZDNet,
“The 14-24 age group has grown up knowing a world that has been “always electronically connected, portable and customizable… The digital millennials are breeding a new social order by using technology for “sharing, creating and validating via peer networks,” or social networking.”
In related study, Jupiter Research found that 77% of online shoppers employed user-generated reviews when making purchase decisions. Furthermore, the Jupiter report emphasizes that younger shoppers (18-24) are more concerned with the reviewers’ attributes than any other demographic, indicating that Gen-Yers approach online shopping as if engaging in a social network. Resource Interactive confirms, “retailers must more narrowly target the consumer, support the engagement of the social network, and them amplify after purchase to re-engage them with the brand.”
For online marketers, this will mean more ad spend on blogs, RSS, publisher networks and contextual. BizRate recently conducted a survey of online retailers, of which nearly 80% said they would invest in viral marketing on social networking sites.
In the wake of Google/YouTube, many analysts are wondering if YouTube really is worth $1.65 billion, and furthermore, if Facebook should go for as much as YouTube. Rumors are heating up that Google is looking at Facebook for as much as $2.3 billion! While I’m skeptical of how much truth is behind the new “GoogBook” rumor, these numbers put a new spin on how much Facebook might be worth to the real spenders behind social networks – the advertisers – as the holiday season approaches.
