The final countdown
December 24, 2013 12:54 PM
If the 2013 holiday shopping season could be described in three succinct phases they might be: Web grows. Stores stutter. Deals win dollars.
Continuing the trend that’s marked the November and December shopping season, new figures released by two research firms show in the days leading up to Christmas, the growth in web sales once again far outpaced that of store sales.
Online sales for the 100 U.S. e-retailers tracked by Custora Pulse Index increased 13% between Dec. 15 and Dec. 18 compared to the same days in 2013. Online traffic among the same set of e-retailers grew 23% year over year for the same days, Custora says. Additionally, 33% of all online orders were completed via a smartphone or tablet compared with 25% last year. Mobile devices using Apple Inc.’s iOS operating system still account for most mobile orders, capturing 80%, but smartphones and tablets running Google Inc.’s Android mobile operating system are gaining market share. Android accounted for 18% of mobile orders during the last minute rush, up from 15% over the same days in 2012. Custora Inc. is a web and mobile analytics firm that specializes in retail.
Store sales last week tell a different story. It seems shoppers favored a cup of cocoa and their computers as shopping companions rather than brave the frigid weather that hit much of the country last week to get to stores. Store sales for the week of Dec. 16 to Dec. 22 fell 3.1% compared to the same days last year, according to ShopperTrak, which monitors traffic and sales at major malls and retail chains. And year-over- year store traffic over the same days decreased sharply—by 21.2%.
"Bad weather throughout the country kept some shoppers away from stores," says Bill Martin, ShopperTrak founder. "This past week was their final opportunity to complete their holiday shopping before Christmas—and though many did finish making their purchases, retailers did not see as many shoppers as last year."
Despite more markdowns and promotional efforts from stores, Saturday, Dec. 21—the last Saturday before Christmas—posted a .7% decrease in store sales over the same day in 2012, ShopperTrak says. Store traffic decreased 18.1% from the same day last year.
The store and web sales data from last week continues the sales trend of the holiday season.
For example, consumers spent $1.198 billion in desktop online sales on Black Friday, according to web measurement firm comScore Inc., making it the season's first billion-dollar sales day, while representing a 15% increase versus Black Friday 2012. Consumers shopping via their computers on Thanksgiving Day, a day that’s only emerged as a significant online shopping day in the last couple of years grew 21% to $766 million. ComScore tracks desktop e-retail holiday sales estimates by drawing on online purchase data from its panel of about 1 million U.S. online shoppers and excludes automobile and auction sales. Those figures do not include purchases made on tablets or smartphones.
ShopperTrak, meanwhile, estimates bricks-and-mortar shopper traffic increased a much lower 2.8% on Thanksgiving and Black Friday compared to the same days last year. Retail sales also increased by 2.3%, as U.S. shoppers in stores spent an estimated $12.3 billion across the two days. However, while store sales and traffic were up for Thanksgiving and Black Friday combined, the numbers tell a different story when viewing only data for Black Friday alone. When compared to Black Friday last year, bricks-and-mortar shopper traffic fell 11.4% and retail sales decreased by 13.2%, according to ShopperTrak
Other new data examines just where on the web shoppers prefer to spend their dollars. 42% of 2,039 U.S. adults surveyed between Dec. 6 and Dec. 10 said they had done most of their shopping online from a computer, smartphone or tablet. However, small businesses captured just 13% of those shoppers’ online spending dollars. The poll, conducted by Harris Interactive on behalf of hibu, which provides local and digital advertising and marketing services to retailers, asked consumers how much of their online dollars they had spent at small retailers and boutique web sites to arrive at the 13% figure.
Big or small, many web retailers have come out with “unusually aggressive” promotions this holiday season—both in terms of the volume of offers and the size of price discounts, says Scott Kluth, founder and CEO of CouponCabin.com, a site that displays offers from about 4,000 e-retailers. “We’re seeing discounts like we’ve never seen before,” he says. “It’s unbelievable, merchants have been so aggressive.”
In recent years, he adds, it was rare to see coupons offering 20% off regular prices. But advertised discounts this year are averaging about 30%, with many up to 50% and one apparel retailer recently offering 70%, Kluth says.
While discount activity appeared to peak on Cyber Monday, the first Monday after Thanksgiving, unusually steep discounts have continued late into the holiday shopping season, he adds. “Our Cyber Monday was insane with discounts,” Kluth says. But even last week, he adds, many merchants were offering things like 25% discounts that shoppers could share with family members and friends.
Although steeper discounts result in smaller sales commissions that CouponCabin earns, Kluth says the overall sales experience has been positive because of an overall increase in online traffic and number of transactions. “A bigger discount means a bigger shopping cart,” he says.