Digital Lights Up Holiday Shopping
LiveArea Insights into holiday trends, transformation, and in-store shopping
Authors: Elliott Jacobs, Chris Hogue, Valerie Vacante
December 2, 2020
Black Friday wasn’t bleak. Cyber Monday was anything but dismal. Yes, eCommerce carried the day in a year of unprecedented challenges that have upended retail – and just about every aspect of day-to-day life.
Consumers spent an estimated $9 billion on U.S. retail websites on Black Friday, according to LiveArea partner Adobe, which tracks online shopping. That is a 22% increase over the previous record of $7.4 billion set in 2019. Meanwhile, traffic to physical stores cratered as retailers cut their hours and limited “doorbuster” deals.
Similarly, Cyber Monday U.S. shoppers spent a record $9.4 billion online, up 19.7% from a year ago. Between 10 p.m. and 2 a.m., consumers spent $2.9 billion online — nearly a third of the day’s total revenue.
There’s a lot behind these numbers. It’s a tale of performance marketing that is performing; of well-tuned technology that remains stable under the heaviest loads; of innovations delivering new experiences. Our vantage point into these and other imperatives is unique. LiveArea has the privilege of supporting leading brands as they go to market in digital channels and apply our services and expertise to succeed. So, we tapped a few of our thought leaders for their perspective on holiday shopping trends and technologies. Here’s what they had to say:
Seeing Clearly Through a European Lens
Elliott Jacobs, Director, Commerce Strategy, LiveArea EMEA
Even before some countries began entering a second lockdown in November, we knew retailers would be running ‘Black Friday’ promotions throughout the month. This is a growing trend we’ve seen in recent years, with some brands and retailers running daily or weekly discount promotions, in the lead up to the Black Friday – Cyber Monday peak weekend.
This year – with or without lockdown – retailers would have been planning to stretch the discount period throughout November anyway for several reasons. Firstly, to avoid the overcrowding we often see on Black Friday – something social distancing would not enable.
And, secondly, it allows retailers to successfully run more varied discount campaigns. For those retailers that have struggled to sell certain collections this year during the previous lockdowns, being able to run various campaigns throughout the month provides more opportunity to shift stock and make up for shortfalls earlier in the year.
However, as the pandemic loomed and lockdowns struck, we entered an almost entirely virtual Black November this year. And, in terms of a digital peak, spreading this period over weeks instead of days also makes sense, easing the load on eCommerce operations, at a time when many eCommerce businesses are still adapting to a huge increase in online sales this year.
Malfunctioning websites, inundated customer service teams, warehouses at capacity and delivery providers at breaking point – these are the nightmares digital teams fear this time of year, elongating the peak period is a sound way of lessening the burden on these operations.
Also noteworthy was the growth of SMBs this year. With retail channels blocked for many of these kinds of ‘non-essential’ businesses throughout the Spring – think fashion and apparel, health and beauty, homeware – many of these businesses would have adopted digital commerce for the first time, through their D2C channels. Others ‘followed the customer’ and joined the Marketplace trend either listing on Amazon and eBay or via more strategic marketplaces like those we power alongside Mirakl. Those that have invested in online channels this year should expect to reap the rewards now.
Independent businesses selling on Amazon surpassed $4.8 billion in worldwide sales from Black Friday through Cyber Monday, a 60% increase on last year. Amazon, as part of a clear strategy to push its small business support this year in light of recent criticism, was keen to point out that 71,000 SMBs had seen sales above $100,000 during the holiday season so far.
Of Footwear, Footfalls, and Moving Beyond Basics
Chris Hogue, Vice President, Strategy & Products
The online vs in-store commerce numbers aren’t the only important story of the holiday season. Digging one level deeper into category sales we found that jewelry and footwear saw some of the biggest in-person sales declines, according to RetailNext, a shopping tracker. For example, apparel sales were down 50%. This is understandable with the fall in foot traffic but what we don’t see is a significant uptick in online sales in some of those same categories over the Cyber 5 period.
According to data from Bluecore, online orders on Black Friday in similar categories were only up modestly compared with 2019. Online orders for Apparel (+4%) and Footwear (-1%) were far below categories like technology (+43%) and home (+42%). Looking at data from Adobe’s 2020 Digital Economy Index game consoles and toys like Lego sets and Hot Wheels are also on the best-seller listings.
While the large number of people working from home has decreased demand for certain types of apparel and makeup, it’s unlikely that this is the only reason for the drop in fashion and footwear. First, the shift to online spend has benefited categories that have traditionally done well. Remember that online commerce originated selling books, electronics and similar items so best practices have evolved to favor this type of merchandise.
Diminished interest in footwear and apparel purchases during the Cyber 5 was exacerbated by the fact that many fashion and apparel brands have been slow to create a customer experience that addresses the shortcomings of digital shopping experiences when compared to the physical ones. There are, of course, exceptions, including the ever-popular Crocs brand. Fashion retailers need to adapt to an online selling approach that bridges the best of the physical world with the realities of the digital one.
Most retailers are starting to put the basics in place but those that don’t are suffering. For example, retailers that offer curbside pickup had a 31% higher conversion rate of traffic to their sites on Thanksgiving Day. Some brands like Ralph Lauren are beginning to experiment with innovative experiences like their virtual store. They have done a nice job replicating what it feels like to browse their actual stores – in this case, their Beverly Hills boutique but even this has its limits.
To excel brands will have to move beyond the basics and experiment with things like how they merchandise, address size and fit concerns, and how they craft a shopping experience that resembles the social one many people seek when going to physical stores.
Holiday Gift: Contactless Payment
Val Vacante, Director, Strategy
In-store shopping during the holiday week may have declined this year – down in the U.S. by more than 52% compared with 2019 – but contactless payment technology could be the antidote for smart retailers.
Target, Kohls, and Dick’s Sporting Goods are some of the retailers that have embraced contactless payment similar to LiveArea’s Scan & Go technology. In fact, the National Retail Federation reports a resurgence in contactless payment – I’d say especially over the holidays when all numbers are tallied. And it is no wonder. Two out of five (43%) of consumers actively Scan & Go technology. In fact, the avoid shopping with retailers that do not offer contactless payments and nearly a quarter (23%) of businesses reported that they have lost sales due to their lack of contactless payment options.
While scan-and-go or autonomous check-out technology may be readily available, it’s not always easy or inexpensive to implement. Most applications require native app development, heavy hardware installations, and investment in sensors or biometric data. But simpler, more streamlined solutions like LiveArea’s patent-pending technology empowers retailers to extend their website experience, loyalty programs and create personalized product recommendations, creating a better experience for holiday shoppers, quickly and without a big investment.
Cyber 5 Results Around LiveArea’s Partner Community
- Salesforce put online spending for the U.S. at $12.8 billion, or growth of 23%, and estimated that consumers worldwide spent 116.6 million hours shopping on Black Friday. The company says store chains that offered curbside, drive-through and in-store pickup options in the U.S. increased digital sales at a 26% higher rate versus retailers that didn’t provide these options in the first days of Cyber Week. On Black Friday, those retailers that offered curbside increased digital sales by 19% over those that didn’t.
- Adobe estimates that consumers in the U.S. spent $6.3 million per minute shopping online during the holiday. Adobe is forecasting that online sales for the entire holiday season will hit $143.8 billion. So far, shoppers have spent $81.5 billion online between Nov. 1 and Dec. 2.
- Bloomreach data shows on-site search was up 67% YoY among U.S. consumers with overall sales rising just 22% YoY. Holiday shopping since mid-Oct to present grew +39% YoY, just outpacing our earlier forecast.
- Shopify reports Black Friday/Cyber Monday weekend results with sales of $5.1+ billion from the more than one million Shopify-powered brands around the world. From November 27 through November 30, total sales grew by 76% from the $2.9+ billion reported for Black Friday/Cyber Monday weekend in 2019.
Elliott Jacobs is Director of Commerce Strategy at LiveArea EMEA. He is an experienced global commerce and multi-channel retail professional, specializing in helping B2C and B2B companies achieve measurable success by reviewing current strategies and processes, and identifying and capitalizing upon emerging digital opportunities.
Chris Hogue, Vice President of Strategy & Products at LiveArea, has more than 20 years of experience evaluating trends, identifying unmet consumer needs, and finding white space opportunities that lead to the launch of innovative new digital products, services and marketing campaigns.
Valerie Vacante is the Director of Strategy for global experience and innovation at LiveArea where she uncovers cultural trends, next generation innovation, and designs strategies impacting the way people connect in and experience the physical and digital world.