Holidays spotlight e-commerce
Holidays spotlight e-commerce
The holiday shopping season is over, but many retailers are still celebrating based on the positive performance of e-commerce.
From November 1 to December 24, online sales rose 15.5% year-over-year, according to research by MasterCard Advisors' SpendingPulse, released last week. Since Black Friday on November 27, e-commerce sales rose 18% compared with 2008.
Parker Block, VP of marketing and e-commerce of Signature Styles, the parent company of apparel companies Spiegel, Newport News and ShapeFX, said part of the reason for the healthy increase is the ability to compare deals and obtain the best prices.
Consumers who used to order exclusively through mail or over the phone are becoming comfortable with Web purchases, and the catalog industry has responded to that trend by giving Web exclusive offers around the holidays, he said.
"We've definitely noticed a higher degree of discounting going on online [in 2009] than last," he said. "[Consumers] realize that prices can change quickly. They can check online for the latest deals, whereas the catalog might not be the best place for that."
Bricks-and-mortar retailers didn't fare as well in 2009, but sales were still up. Total retail sales increased 3.6% between Thanksgiving and Christmas compared with 2008 numbers. That figure includes the extra shopping day consumers had in 2009 between the two holidays. Without that day, sales would have increased 1%. SpendingPulse estimates total US retail sales across all payment forms.
"The online channel has been showing steady growth over the past several months, on a year-over-year basis," said Michael McNamara, VP of research and analysis for SpendingPulse, in an e-mail to DMNews. "For the past four months, we've seen year-over-year growth rates in the mid to high teens. It is the only channel that did not experience year-over-year declines in recent recessionary months."
He further explained the numbers: "The extra shopping day may have given some lift to overall year-over-year comparisons," he said. "Also, early discounting in 2008 drew holiday spending into early November, while [in 2009] shopping didn't really take off until Black Friday." In addition, several winter storms disrupted traffic to bricks-and-mortar locations and benefitted online shopping growth rates.
According to Shop.org's consumer pre-holiday survey, 47.7% of consumers planned on shopping online in 2009. Of those consumers 45.1% said they would start in November, while 5.7% said they would begin shopping online in December.
As Cyber Monday grows in popularity, experts say more retailers are beginning to understand the need to live up to consumer expectations.
"Retailers are seeing data indicating that people plan to shop online on Cyber Monday, so special deals and offers are made available to customers," said Scott Silverman, executive director of Shop.org. "Consumers are expecting sales and retailers are delivering online. One's feeding the other."
Silverman explained that the Web also offers perks that bricks-and-mortar stores can't, such as customer reviews, informational videos and detailed descriptions.
Catalogers are also focusing more on Web sales around the holidays and throughout the year. Block said that, specifically for the Spiegel brand, the Web accounted for 55% of total sales last year. By the end of 2009, he estimates that number will rise to 63%. Spiegel mails catalogs bi-weekly to its standard customer base and some prospect lists.
He said that catalogs are also a main driver to a retailer's Web site. "Some marketers are turning to online ads and e-mail marketing — which are still important — but they're not as engaging as a catalog," Block explained. "There's still something that a direct vehicle can achieve that we can't achieve cost-effectively in a mass environment."
As a result, more companies are marketing to the holiday online shopper. Aaron Magness, director of brand marketing and business development for e-commerce site Zappos.com, said the company launched an e-mail campaign in 2009 that told the stories of different members of a fictional family throughout the holidays and how Zappos could be used to fill needs in various categories.
Its goal was to raise sales and awareness of Zappos' other categories, like apparel, home furnishings and beauty products, since many people only associate Zappos with selling shoes, Magness explained.
"This type of campaign where you're telling an ongoing story is something that really makes sense to a person, more than a marketing one-off that's talking at someone," he said. "We're showing people how our products can be used in your everyday life."
Magness said holiday sales were up from 2008, but he did not divulge specific numbers. Going forward, he said the company will focus on promoting its newer category products through search marketing, as well as though social media and word of mouth.
Other e-commerce sites, such as Overstock.com, launched promotions to keep users coming back to the site throughout the holiday season. Overstock's 25 Days, 25 Deals offered consumers a newly discounted item every day in December.
"Relative to other options, the Web is the place to get the best deals," Silverman said. "Especially in this economy, people view the Internet as a way to find those best deal and save money."