A new study by McKinsey & Company has revealed that brands growing 10% faster than their sector’s average are investing more than $100 million in e-commerce technology, and recruiting new tech talent to help capture a larger share of sales in the holiday shopping season. Nearly a quarter of all global sales are expected to be made online by 2025, with $6.3 trillion e-commerce sales expected in retail alone.

With Amazon Prime Day just around the corner on the 8th and 9th October 2024, and BFCM coming up, brands are taking notice and changing their strategy. Key points include:

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1. Invest like an attacker: Leading companies are increasing their investments in new technologies, particularly generative AI, and expanding into new digital channels. They're also capitalising on major shopping events for significant revenue boosts. Almost seven in ten (69%) brands plan to increase their e-commerce spending to support Black Friday, 68% for Cyber Monday, 63% for end-of-year holiday season and 53% for Amazon Prime Day. Almost a third (28%) plan to increase spend by more than 20% for end-of-year holiday season and 24% for Black Friday. More than 40% of leading brands secure 10% plus of their annual e-commerce revenue from holiday shopping events like Black Friday and Singles Day.

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2. Prioritise technology infrastructure: Leaders are treating technology as a strategic advantage, with many planning to spend over $100 million on e-commerce tech infrastructure.

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3. Leverage AI for customer insights: Successful companies are using AI, especially generative AI, to better understand and serve their customers across multiple channels. This is particularly crucial as shopping behaviours evolve and new standards emerge.

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4. Centralise leadership while empowering teams: Top performers are adopting a centralised e-commerce capability while allowing teams the flexibility to tailor strategies to local needs. Many are implementing a product and platform operating model to support this approach.

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Zimmerman, a senior partner at McKinsey & Company, said: “The holiday season is make or break for many brands. It’s why we see so many companies making strategic moves to win new customers. The companies getting ahead are well prepared – typically staffing war rooms with a mixture of talent – marketers, pricing experts, data scientists, and engineers – so they can spot opportunities and make changes quickly.”  

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As Prime Day draws near, brands are preparing for a competitive showdown, ready to make the most of this shopping extravaganza. By increasing budgets and implementing innovative marketing strategies, companies are poised to engage consumers effectively and boost their sales in what promises to be another record-breaking event. With such a strong focus on e-commerce spending, it will be interesting to see how these efforts translate into sales and brand visibility during one of the biggest shopping events of the year.