E Commerce Holiday Sales Sailed over Brick and Mortar Stores in 2016

Things looked a bit shaky at the onset of the 2016 Holiday Shopping season. All the hype about the presidential elections seemed to overshadow this most important time of year for retailers.
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 significant and now that the numbers are in, they seemed to have been proven right!
Online sales hit their targets this holiday season, with e-commerce sales increasing by double digits year over year, according to data released today from Adobe Inc. and web measurement firm comScore Inc.

U.S. online sales totaled $91.7 billion, up 10.5% from $83.0 billion in 2015 and slightly higher than Adobe Digital Insights’ projection of $91.6 billion for the Nov. 1-Dec. 31 period.

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 was one of the big leaders in capturing the on-line sales market, with some agencies stating that they captured just about half of the market share of on-line sales. A big factor in this was there promoting their “Prime” and “Flex Force services, which shoppers took advantage of.

Mobile continues to drive web shopping. The mobile commerce arena blossomed in a big way for the holiday shopping season. 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.

So if you think email marketing is going by-by, you are wrong. But the key is providing meaningful email marketing promotions, ones that the consumers are looking to capitalize on. This is a great way to generate interest in a popular item then working to upsell other semi-related products for tie-in or percentages off another item after making the initial purchase.

Physical stores, however, were 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 instead of cash in their tills this season. 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.

Big Chain Announce Store Closings: Just this past week, faster than proponents thought major chain stores reacted to low brick and mortar store sales from the 2016 holiday season. Macy’s, Sear’s along with their purchase, Kmart announced thousands of layoffs and hundreds of store closures on Wednesday following dismal holiday sales and declining yearly revenues.
Macy’s said that it will eliminate more than 10,000 jobs and will close 68 stores by the middle of this year. The closures are part of 100 announced in August, representing a loss of nearly 14 percent of the 730 stores operated by Macy’s in the US and its territories. Sears with their Kmart stores will close 50 stores by April, 108 of its Kmart locations and 42 Sears stores Reason being that their sales were down between 12 and 13 percent from an already lackluster 2015 selling season.

This only affirms the increase in on-line sales being the driving force in retailers making gains going forwards. But that also means that with consumers using all the latest technological aids available to them that retailers have to remain sharp and be fast to react to trending market advances. Consumers are looking for not only the best prices but also for those items being in stock and not just using “Flash Sales” promotions as a way to get them in the door then finding out your out of stock. Reputable information is the key and social media can cure or kill an e-commerce store as fast as it takes to click a mouse.

The bottom line is that e-retail stores need to stay aggressive while making the shopping experience simple and customer service will only continue to play a major factor in winning a loyal on-line shopping customer.