While the November shopping season was off to a bumpy start as a result of the U.S. presidential election and all the uncertainty that came with it, the holiday shopping season, at least for web retailers, has been incredibly strong. While a significant percent of shoppers in the days following the election said they would cut back on spend due to the election, shoppers nonetheless spent generously during Thanksgiving and Cyber Weeks. Forrester Research predicted early on that online sales for November and December 2016 would be more than $110 billion, a 13% rise over 2015. This prediction appears to now be a reality.
Some highlights about the online shopping season:
- The online channel continues to gain share. The growth rate of e-commerce during the holidays keeps outpacing growth in stores. The National Retail Federation predicted a holiday increase of 3.6% for stores overall in 2016 versus the double-digit gains for web retailers. Online retailers in fact saw their biggest Cyber Monday ever this year. Adobe calculated that total to be over $3.3 billion, and said that nearly every other day following Cyber Monday has topped $1 billion in web sales. This is extraordinary because it was only in 2010 that one day (Cyber Monday) hit $1 billion in sales. Now over 50 days are at that level.
- Amazon is a big beneficiary. Amazon not only captures an enormous percent of total eCommerce sales online during the holidays but it also arguably works harder than anyone to deliver that. While the early part of the season had some patchy periods with a pilot strike and some delayed shipments, Amazon has aggressively used its Flex force and promoted Prime Now to compensate for some of the challenges of traditional shippers and to generate sales from last minute shoppers. Slice Intelligence suggests that these elements have helped Amazon capture nearly half of holiday online sales.
- Mobile continues to drive web shopping. The mobile commerce ecosystem is a self-fulfilling prophecy. Consumers are spending more time on their mobile phones. Email is one of the most common features shoppers use on their mobile phones. And email is how retailers communicate most effectively with consumers during the holidays. As more retailers have mobile optimized websites and those with apps often have Touch ID, consumers are now more apt to shop on key holiday dates from mobile phones than ever before. Adobe in fact reported that through early December, half of web traffic and 30% of retail sales came from mobile sites.
Physical stores, however, are much more challenged this year. Several retailers told us anecdotally that they were missing sales targets, which means that at least a few were left with a lump of coal. Store traffic has also been gradually declining over the years and physical stores struggle to convert shoppers as consumers easily research competitive online and offline offers on mobile devices. We’ll have to wait for earnings season to see how physical stores actually fared. That said, keep in mind, the season isn’t over as this week following Christmas can deliver up to 10% of overall holiday sales. But for now, we know that regardless of retail overall, online retailers will end the season on a merry note.