Product deals and free or reducing shipping can help to lure first-time shoppers to buy online, although having a prominent product listing on a retailer’s website is critical to improving sales.

The Holidays Bring New Shoppers on Board

Chances are, as a consumer in the U.S., you shop online. In fact, 75% of American adults are omni-shoppers—buying both online and offline. But one-third of these omnishoppers have not purchased CPG products online.

The holidays are the largest single point of entry for new consumers in the online space, and the numbers are growing exponentially. In the fourth quarter of 2018, 9 million more shoppers made a CPG purchase online than in fourth-quarter 2017, amounting to $1.64 billion in year-over-year growth for the quarter. That’s 9 million new wallets a brand or retailer could have tapped into; yet not everyone is capitalizing.

The main commonality among these new online shoppers? Amazon. The online retailing giant’s market penetration is unrivaled, with two-thirds of new fourth-quarter 2018 shoppers choosing Amazon as their point of entry. Thanks to Amazon, shoppers have increasingly grown to expect free or reduced shipping, methods that many retailers are investing in to remain competitive. So it’s no surprise that Walmart and others are touting free next-day delivery (without a membership) to combat Amazon’s estimated 74 million Prime subscribers in the U.S. to gain access to this new pool of shoppers. With prior-use driving repeat online purchases, winning the shopper basket during the initial shopping trip can lay the foundation for long-term success. 

There is a price to pay, however, for free shipping. Even Walmart has a minimum spend requirement for free shipping, so it’s not uncommon for shoppers to add one more item to their shopping carts in order to qualify. This offers a terrific opportunity for brands to better understand the variance in online basket compositions compared with brick-and-mortar so they can effectively develop cross-promotions and targeted ads. 

But what other tactics can drive the initial purchase?

The single greatest opportunity to improve product sales is through improved page listing. Due to the finite amount of digital viewing space on a single page, the percentage of sales falls drastically for items that are not listed on the first page. And with the ease of price comparing among brands on a merchant’s site, as well as across merchants, it’s even more critical to price competitively.  

Yet competitive pricing can be a very manual and laborious task. According to one of our Connected Partners, CommerceIQ, automating these processes can drive up to 17% growth in brand performance on Amazon alone.

Shopping Categories Are Not One-Size-Fits-All

It might be reasonable to assume that online product sales follow the same seasonal peaks across all merchants. But in actuality, shoppers are increasingly diversifying their spending. Seven of the top 15 categories for online sales in the fourth quarter are different across Amazon and other online merchants. For example, eye care had the sixth most online sales in fourth-quarter 2018 of any category within non-Amazon U.S. e-commerce merchants, yet it didn’t even crack the top 15 for Amazon.

Manufacturers need to focus on merchants that attract consumers who are looking to buy their products, while offering the right pricing and promotion mix elsewhere. Providing a satisfying experience during that fourth-quarter purchase is crucial, as occasional shoppers tend to increase their purchases in subsequent quarters.

Brands and retailers that activate the levers for new online shoppers and category differentiators will win this holiday season.