If the past is a guide, we’d be wise to hold off on drawing rock-solid conclusions about the significance for the retail world of the just-ended holiday season.
After all, the numbers are still coming in (the U.S. Commerce Department doesn’t release its report until later this month) and shoppers say in surveys that they don’t intend to stop shopping just because Christmas is past.
The Wall Street Journal reports that 66 percent of those polled said they’d be shopping the day after Christmas. A BloomReach survey found that 50 percent of those asked said they’d be doing holiday shopping after Christmas. One possible reason: Nearly a third of those in the BloomReach survey, conducted by Survata, said they believe retailers hold off on the best deals until after Christmas.
But consider this the first draft of history; and when it comes to the early history of the 2015 holiday shopping season, at least three trends emerged or were significantly amplified:
- Amazon killed it, adding 3 million Prime members in the third week of December, by its own count — members who spend more than twice as much a year as non-Prime members, according to Retail Dive.
- E-commerce continued its rapid growth to the point where the delivery infrastructure is straining under the weight of online purchases.
- Smartphones were a work horse, not just for browsing, but for conversions. Data from a subset of BloomReach e-commerce customers showed that smartphone conversions hit 25.8 percent on Thanksgiving Day and reached almost 28 percent on Christmas. Even a day made for desktops — Cyber Monday — saw 18.6 percent of conversions on smartphones, while IBM said smartphone conversions were up 70 percent for the day, compared to 2014.
I’ll look at all these signs of change in more detail in a minute. But first it’s worth considering what the robustness of these holiday trends says about the e-commerce landscape in general. January is traditionally a month in which the retail and e-commerce world begins to return to normal. This year, however, might be the year to ask: Does retail ever really return to normal?
No question the numbers for traffic, revenue, orders and the like are outsized during the holiday season. November and December are huge for retailers. Marketing and analytics company Qubit, says retailers realize 20 percent of their sales between Black Friday and Christmas, for instance. But consumer habits are changing rapidly and dramatically. Could it be that the holiday season is just a magnifier for what’s to come?
No, Amazon won’t add 3 million prime members every week. And e-commerce’s 20-percent year-over-year surge in November and December might not be repeated for every two-month period. Likewise, mobile’s percentage of conversions is likely to drop now that the frantic rush to get gifts quickly and efficiently has subsided. But all those measures will continue to move up and to the right for the foreseeable future.
And there are consequences for retailers who need to adjust to the new normal or non-normal or whatever it is that we’re seeing in terms of consumer behavior. Consider some of the stories behind the three trends I mentioned earlier.
Yes, Amazon has been a machine, gobbling up retail dollars, for years. But its holiday numbers are the sort of numbers that are difficult to digest. The Seattle behemoth shipped to 185 countries this season, according to the Associated Press. It accounted for nearly one-quarter of this year’s $94 billion in retail revenue growth, Retail Dive quotes Macquarie analyst Ben Schachter saying.
Amazon says its customers worldwide ordered 33 items per second from its electronics category using mobile devices on Cyber Monday. They purchased an Adele CD every three seconds that day, the company said. Customers also bought enough 55-inch TVs over the holidays to stretch the average width of the Grand Canyon.
Furthermore, the BloomReach survey found that 87 percent of consumers said they would comparison shop their holiday gift purchases on Amazon, with 73 percent saying they would buy from Amazon. In fact, 31 percent said they would spend more than half their holiday budget on Amazon.
That’s the kind of momentum that is hard to turn around.
As for the growth of e-commerce, again with the momentum. Consumers have shown with their wallets that digital shopping is the future. Research firm eMarketer says e-commerce’s share of total U.S. retail will rise from 7.4 percent this year to nearly 13 percent by 2019 (subscription required). And mobile will no doubt be a big part of that.
The data that says that shoppers are buying more on mobile devices doesn’t say why, but it’s hard to argue with the theory that consumers are becoming increasingly comfortable buying on their smartphones. No doubt the fact that more and more of our lives are being lived on smartphones is a part of that. And most likely it doesn’t hurt that some retailers have worked hard to make mobile user-friendly, while ensuring that mobile is intertwined with consumers’ overall shopping experience.
Those underlying factors have been building for some time and they’re not going away. Think about it: A year ago, IBM says, smartphones accounted for just over 9 percent of e-commerce sales on Cyber Monday. What’s become increasingly clear is that consumers are taking charge of their shopping experiences, determined to shop the way they want to — and they’re expecting retailers to keep up with their preferences.
It will be fascinating to contemplate the next draft of history as more reliable data on the holiday shopping season is released and as consumers move on from the 2015 holiday period and back to their normal lives — whatever that is.
Photo of holiday shoppers by Mike Cassidy. Graphic based on data from a subset of BloomReach e-commerce customers.
Mike Cassidy is BloomReach’s storyteller. Contact him at firstname.lastname@example.org; follow him on Twitter at @mikecassidy.