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Why electronic payments will make or break holiday retail plans

Dec 21, 2018 Dave King

The holiday season is typically the most lucrative period of the year for American retail outlets. Sellers of all sizes often rely on the last few months of the year to turn a profit as consumers tend to step up their spending habits.

This has been the case for decades and it's certainly a dynamic that sales and marketing professionals are well aware of. Each year, it seems as if businesses ramp up their efforts to attract new customers and outperform their rivals.

Although the model for the annual holiday rush has largely been the same, data suggests that retailers may want to reconsider their sales strategies for the pending holiday campaign. According to a recent survey from Overstock.com, more American consumers will be shopping online this year, meaning leveraging electronic and mobile payment solutions will be essential to strong sales.

The source noted that 75 percent of respondents plan to shop on Black Friday this year. However, 57 percent of those post-Thanksgiving shoppers will use the Internet as their primary purchase point. Moreover, 66 percent of consumers say they will be active online during Cyber Monday.

"Online shopping allows consumers to make purchases comfortably from their home while avoiding the holiday rush, waiting in line, fighting traffic and suffering the weather," said Overstock.com CEO Patrick Byrne.

Emerging mobile market
The source indicated that the majority of Internet holiday shoppers will be younger consumers, showing that data from the survey could point to long term spending trends that retailers will need to note.

For example, the source cited data from Google that showed 76 percent of American adults will browse products via a mobile device in 2013. Although just 25 percent will make a purchase on their smartphones, it indicates that mobile transactions are becoming a lucrative retail channel. As mobile technology evolves and consumers' security concerns diminish, it's likely that more retailers and payment processing companies will adopt mobile solutions.

Leveraging such systems is important in the modern American retail environment. Although the Great Recession appears to be over, many consumers across the country are taking steps to control their spending.

Business Insider reported that data from Harris Interactive found that 46 percent of Americans will reduce spending during the holiday period compared to 2012. However, if retail outlets implement online and mobile transaction solutions, they may be able to capture a market that is becoming more comfortable with Internet and smartphone transactions.