Online sales are forecast to grow faster than overall retail sales this holiday season as more consumers on Long Island and nationwide shop on their computers and mobile devices, causing retailers to focus more on e-commerce hiring and technology.
Retail analysts said that online holiday sales will grow at double-digit rates, propelled by convenience, lower prices and free shipping.
Local retailers, such as 1-800-Flowers.com, P.C. Richard & Son, and Fragrance.com, are preparing their websites for increased traffic. Meanwhile, some of the hiring being done locally by national retailers, including Target, Kohl’s and Toys R Us, is intended to handle the expected boost in online sales.
Long Island’s small businesses can also join in on the e-commerce growth, said Thomas Shinick, an entrepreneurship and marketing expert and an adjunct professor at Adelphi University’s Robert B. Willumstad School of Business. Small retailers can create a website, use social media, send promotional emails, sell on Amazon and advertise through Google Ads, he said.
“They can compete, and they should compete, head-to-head with the same tactics as big-box stores and large companies,” Shinick said.
16.9 percent of sales expected online
Online retail sales will make up 16.9 percent of holiday spending, up from 15.4 percent in 2015, according to IHS Global Insight economist Chris Christopher. Online holiday retail sales are predicted to be close to $111 billion, out of total retail sales of $656.1 billion, Christopher projected.
The National Retail Federation is forecasting online sales in November and December, the traditional holiday shopping season, to increase by 7 percent to 10 percent to as much as $117 billion. NRF said it expects total in-store and online sales to increase 3.6 percent to $655.8 billion.
There is still a long way to go before online sales surpass in-store sales, said Marshal Cohen, senior retail analyst with The NPD Group, a Port Washington-based market research company.
Nevertheless, he said, “Online sales are going to grow more than in-store sales. It is all about displacing where the money is spent.”
Having the ability to shop from anywhere at any time, to scout products and compare prices attracts customers to websites, retail experts said.
Lisa Rossi, 50, of Merrick, usually makes purchases online on her computer and has her orders delivered either at home or to a local store for pickup. She recently purchased a doormat online and picked it up at a Target store in Farmingdale.
“I definitely will be doing online shopping for my three children, parents and siblings,” said Rossi, an administrative assistant. “It saves time. It is just easier for me working full time.”
Mobile shopping, a subcategory of e-commerce, is growing even more quickly. Mobile will exceed desktop traffic for the first time this holiday season, with 53 percent of traffic, yet drive 34 percent of purchases, according to digital software company Adobe Systems Inc., based in San Jose, California.
Mobile marketing efforts
Retailers will try to drive more foot traffic to brick-and-mortar stores this season through mobile marketing efforts, according to online coupon provider RetailMeNot, based in Austin, Texas.
They will also turn to emailing customers, who say email is the most effective way to get an offer on their mobile device, Adobe found.
“Retailers are going to work harder using online as a promotional vehicle,” Cohen said. “They are going to push more customers to go in stores because they get more business that way. Impulse buying happens 45 percent of the time in-store, because we see it, touch it and feel it. Online, it happens 25 percent of the time.”
Retailers are implementing new technology to prepare for the season. They are enhancing their websites, turning to the computing cloud to avoid site crashes from heavy traffic, and embracing “conversational commerce,” which allows consumers to use chat, messaging, or voice to interact with a human company representative, “chatbot” artificial intelligence software, or a mix of both, to get customer support or make purchases.
Retailers know their sites have to be set up so consumers can browse easily and check out easily, said Danielle Conte, a retail consultant and founder of the shopping blog YoutailRetail.com in Centerport.
Farmingdale-based electronics giant P.C. Richard & Son has improved the speed of its website, made mobile searching faster and added product videos to keep up with online demand.
“We revamped our website to be mobile-friendly and focus on the mobile experience,” said Gregg Richard, chief executive of P.C. Richard, adding the company promotes picking up online orders in the stores.
Carle Place-based e-commerce company 1-800-Flowers.com, after seeing consumers shift toward shopping on mobile devices, has focused on conversational commerce. It allows customers to order gourmet food and flowers on Facebook Messenger, on Amazon’s Alexa — a voice-command service — and using Gwyn, an artificial-intelligence tool on the 1-800-Flowers website that gives prompts to help customers choose a gift based on questions customers ask and their interactions with Gwyn.
“We believe innovation is in our DNA,” 1-800-Flowers spokeswoman Yanique Woodall said.
Fragrance.com, a beauty e-retailer based in Deer Park that sells more than 15,000 discounted designer fragrances and beauty products, launched a new shopping app in September, enhanced its website’s search capabilities, recommends products to customers based on their searches and displays video reviews of products. The website is completely hosted in the cloud, which provides virtual site hosting through non-company servers with more bandwidth and better protection than standard in-house servers, company president Jason Apfel said.
“We utilize up to three cloud service providers across the world,” Apfel said. “Depending on how close they are to those servers, it is a faster experience for the customers.”
E-tailers take advantage of customers’ searches on their websites to personalize online shopping, said Peter Gold, chief marketing officer of Market America, an e-commerce platform based in Greensboro, North Carolina, that runs the shopping website Shop.com.
“They are looking at what you are buying and when you abandon the site,” Gold said. “The more you do on the site, you search, you browse, you look at product detail pages, and you edit your cart — that tells us a lot about you.”
To fulfill the projected increase of online holiday orders, some retailers plan to hire more staff in stores and distribution and fulfillment centers to handle e-commerce purchases. In contrast, the number of seasonal hires at traditional retailers is expected to be largely the same or lower than a year ago.
“Last year, we saw online generate more business and certainly more growth than the in-store business was expecting,” Cohen said. “They found themselves short-staffed, and they don’t want that happening again.
Target to add 70,000 seasonal workers
Target plans to hire more than 70,000 seasonal workers nationwide, as it did last year. Some store hires will help fulfill online orders, since about 30 percent of target.com sales are fulfilled at stores through in-store pickup or ship-from-store services, the company said.
At a hiring event this month at the Target store in Farmingdale, 26 people were interviewed and half were hired, said store team leader Jacy Lally, whose goal is to hire 40 seasonal associates. About eight to 10 permanent and seasonal workers “will be staffed to meet demand of guests shopping online,” Lally said.
Macy’s is looking to fill 1,700 seasonal positions on Long Island, out of 83,000 spots nationwide, compared with 85,000 in 2015, due to store closures. About 15,000 jobs will be focused on fulfilling online and mobile orders, up 3,000 positions from last year.
Kohl’s is seeking to hire about 600 seasonal workers at its 12 Long Island stores this holiday, out of more than 69,000 nationwide, the same as last year, to work at its stores, distribution centers, e-commerce fulfillment centers and credit facilities.
“Some seasonal store associates will help fulfill Kohls.com orders for our buy-online, pickup in store program, as well as Kohls.com orders that ship from stores direct to customers,” Kohl’s spokeswoman Sydney Hofer said.
Toys R Us plans to hire 700 employees at its eight stores on Long Island. Store teams can handle online orders to be picked up in a store or shipped from the store to the home — what retailers call “omnichannel.”
“We’ve placed a greater focus on hiring for our e-commerce fulfillment centers, as well as back-of-house omnichannel operations at our stores,” Toys R Us spokeswoman Candace Disler said.
Just as retailers want to ensure adequate staffing for the holidays, UPS, FedEx and the United States Postal Service are also hiring to handle the volume of online orders.
United Parcel Service, the second-largest employer of holiday workers after Amazon, plans to add 2,000 seasonal jobs at its three locations for the Long Island area.
The Postal Service is looking to hire 230 holiday workers on Long Island.
FedEx plans to fill more than 300 positions at its 10 sorting facilities on Long Island. It has been investing in its delivery network to meet the growing needs of e-commerce, including adding 30 aircraft, 19 automation stations and four distribution hubs since the last peak season, FedEx spokeswoman Jennifer Caccavo Cordeau said.
“These investments in people, facilities, aircraft and technology are all made to enable us to provide outstanding service during the busiest time of year,” Cordeau said.