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Retailers depend on strong holiday sales.

Nearly 74% of surveyed US and UK retailers say it’s where they get 20% or more of their annual sales.  

Why are the holidays so important to marketers? We analyzed retail sales data and consumer surveys, and we looked at the advertising performance from AdRoll’s 25,000 advertisers to find out.

Here’s what we learned.

Winter holidays dwarf all the rest, combined

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Retail sales data from the National Retail Federation shows the winter holiday season—here defined as the months of December and November—is by far the most impactful, with over $626 billion in sales. That’s 10x greater than the second-highest-grossing holiday, the back-to-school season.

In fact, when you combine the 2015 sales of all other US retail holidays, you get $156.8 billion—one fourth of winter holiday sales.

Retail sales increase 21.2% during the holiday season

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News coverage of key shopping dates in the holiday season focus on long lines and packed department stores, but how much more do people spend on retail goods during the holiday season?

US retail businesses sold an average of $272.9 billion worth of retail goods each month of 2015. Spending in December, however, was 21.2% higher at $346.7 billion, which means businesses saw 21.2% more sales in the peak holiday sales month of December—not counting post-Thanksgiving Day sales.

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As more consumers spend a greater amount on retail purchases during the holiday season, traffic rises on ecommerce storefronts, and consumers are also more likely to click on ads.

We looked at the performance of advertising between November 26, 2015 and December 31, 2015, to learn how much more likely ad viewers are to interact during the holidays.

The click-through rate of ads rose 22.6% on average compared to Q3—July 1 to September 30. What’s more, the click-to-conversion rate (CTCR), which measures how likely users are to perform a desired action after clicking, like purchasing, rose 11.5%.

This means holidays bring a larger audience that is also more likely to be swayed by advertising.

Holidays sales grow more profitable each year, even after factoring in population growth

The holiday season isn’t valuable solely for raw sales increases. Seasonal spending is in itself an economic trend that retailers are finding increasingly costly to ignore—steadily rising year-over-year.

According to the US Census, retail sales during December have grown from $309.2 billion in 2006 to $371.3 billion in 2015. That’s a 16.72% increase that has far outpaced the growth of the US population, which only saw an 8.56% boost during that same period.

Not only do consumers spend more during the holiday season, they’re also spending more than the year before.

The vast majority of holiday spending is still in-store, but online spending is growing fast

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The majority of holiday spending in the US—roughly 83%—still takes place in brick-and-mortar retail stores. However, the share of online retail sales has grown faster.

In the US, the online share of retail sales has grown from 5.1% in the fourth quarter of 2011 to 7.5% in the fourth quarter of 2015. It is projected to reach nearly $334 billion in spending by the end of 2016. This rate isn’t expected to decline, either.

Online retailers are more poised to capture this growing share of retail spending, which means brick-and-mortar’s dominance is waning faster each year.

What the future holds for online holiday spending

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Online storefronts will face two tectonic shifts over the next several years: a rapid growth in market volume and an equally fast shift from desktop to mobile purchasing.

Online retail sales will reach $534.95 billion in the US by 2019. Mobile, meanwhile, is expected to account for up to 43% of e-commerce sales in the US by 2019—up from 16% in 2013. 

Marketers wishing to take advantage of the holiday season should begin planning in the early summer. Digital marketing offers online retailers a wide range of tactics, like highly segmented display, email, and search campaigns, to more efficiently convert increased holiday traffic. But it’s only through careful advance planning that marketers can make the most of the holiday season.

To learn best practices for holiday, try a few of these online resources: MailChimp has a comprehensive set of 100 creative and practical tips for holiday offers and marketing, Optimizely has created a guide to retail personalization, and HubSpot offers a great step-by-step walkthrough that well explains the role email, blogging, and social media play in holiday marketing.

Visit adroll.com/holidays to take a bite out of more tasty holiday (content) treats like this.