The Year E-Commerce Saved Christmas

Discussion
Dec 30, 2009
Tom Ryan

By Tom Ryan

Whether due
to snowstorms, mall-madness phobia, e-deals, or an improved shopping experience,
e-commerce delivered what many saw as surprisingly strong results this
past holiday season. According to Coremetrics, online retail sales jumped
13.6 percent from Black Friday to Christmas Eve.

Coremetrics
said the gains were helped by online discounts throughout the season as
well as one extra day of shopping during the season.

Said John Squire,
chief strategy officer at Coremetrics, “This
year, we saw retailers break tradition by turning Black Friday from a one-day
event into a month-long event with ‘screen busters’ in addition to door busters.”

At the same
time, SpendingPulse, part of MasterCard, said e-commerce sales vaulting
15.5 percent from Nov. 1 to Dec. 24 – the biggest holiday gain among channels.
Since Black Friday, e-commerce sales jumped 18 percent. Besides the extra
shopping day, SpendingPulse, which largely bases its data on credit card
payments, said that several major winter storms disrupted traffic to brick
and mortar locations and seemed to benefit online shopping.

More measured
but still healthy results came from comScore, which indicated online sales
from the beginning of November through Dec. 20 totaled $25.5 billion, up
4 percent from 2008. In addition to the snowstorms, the online-tracking
agency said aggressive late-season promotions by retailers with promises
of Christmas-delivery appeared to have paid off.

Don Davis, writing
for Internet
Retailer,
noted
how savvy online shoppers appeared to seek out deeper discounts and more
free shipping breaks this holiday season. Other online behaviors he pointed
to included earlier
online holiday shopping on Thanksgiving weekend, the influence of social
networks driving purchasing decisions, and share gains by larger e-commerce
players.

For just the
month of November, online sales
among the top 25 retailers grew 13 percent compared with a decline of 10
percent among small and midsize retailers, according to comScore.

“It’s pretty
clear that the larger, established retailers have an overall competitive
advantage during a recession,” said
comScore chairman Gian Fulgoni in a statement.
“Not only are they better equipped to meet the price demands of cash-strapped
consumers, but they are also able to maintain their marketing investments
and gain consumer mindshare.”

Discussion
Questions: What lessons should online and multi-channel retailers be
taking away from this holiday season? What shopping behaviors and site advancements
have done the most to reshape online shopping in 2009? Are larger e-commerce
players demonstrating a sizeable advantage over smaller players?

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9 Comments on "The Year E-Commerce Saved Christmas"


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Paula Rosenblum
Guest
11 years 4 months ago
Most retailers are underestimating the importance of eCommerce…and they are significantly underestimating the importance of mCommerce (which is really just a variant of “e”). When the pre-Christmas blizzard hit the Northeast, despite the media’s cries that it was going to devastate retail sales, a simple math calculation showed it wasn’t going to…we were well within the shipping window for Christmas day–even without expedited handling. And I wondered if the electronics retailer whose store I was in knew I was price-checking the laptop disk drive I was considering buying on the web from my mobile phone. One retailer that is clearly NOT underestimating the importance of eCommerce is Walmart. That’s the story behind the price war story with Amazon. The “elitist” days of eCommerce are behind us…computers cost less than $500 and entry-level DSL costs what dial-up used to. It would behoove us all to take notice…and to understand that at minimum, consumers conduct research before any trip to a brick and mortar store begins. And since we can’t really predict the growth curve of eCommerce,… Read more »
Dick Seesel
Guest
11 years 4 months ago

“Saving Christmas” may be overstating the case…the evidence suggests that consumers were spending in stores, not just online. (Assuming, of course, that they could get out of their driveways!) But there’s no doubt that e-commerce continues to grow at a much faster rate than pure bricks-and-mortar retail.

As Paula points out, the smartest retailers (Walmart, for example) have an integrated strategy to capitalize on the growth of e-commerce sales and to use their websites to drive store traffic. Any retailer interested in fueling its internal growth needs to look long and hard at its online selling strategy: Merchandise content, logistics, marketing, and the rest of the package.

Ryan Mathews
Guest
11 years 4 months ago

The times they are a changing! The lesson? People like technology, convenience and discounts, not to mention guaranteed selection, availability, and the ability to do one-click price comparisons. And, yes, m-commerce is here to stay. Just check out those cute little apps that let you scan a UPC code and get a breakdown of retailers carrying the same item and the price points they are selling them at.

Marge Laney
Guest
11 years 4 months ago

I guess I have a “one world” way of thinking when it comes to eCommerce; it’s just another way that I can access my retailer of choice. Is it better? That depends on my objective for the purchase I am attempting to make. Sometimes I like to shop online, sometimes I like to interact one on one with the products and the people in the store environment. Does that make me different or weird? I don’t think so.

What’s weird is the fact that often within a brand the eCommerce and brick and mortar group compete with each other. These two should work seamlessly together to produce an easy, multi-channel experience for each customer who chooses to engage with their brand and the results not parsed as winner vs. loser but a win or lose for the brand experience overall.

Gene Detroyer
Guest
11 years 4 months ago
The real question is not “What lessons should the online and multi-channel retailers be taking away from this holiday season?” The question is really “What should the brick and mortar retailers be taking away?” It is amazing at the lack of aggressiveness and vision that leading retailers have with regard to online shopping. History tells us that retail concepts don’t last very long. In the scope of retailing, how many leading retailers have remained leaders more than 25 years? One of the great case studies from business school was the study of the catalog giants, Sears Roebuck and Montgomery Ward, coming into a new world after World War II. Sears made a strategic commitment away from catalogs to build stores. Wards did not and never really recovered. Woolworth was once the leading retailer in the U.S. It was considerably more successful than also ran Kresge. Kresge became Kmart. Woolworth is gone. Unfortunately, that same commitment to understanding the retail trends did not remain with Sears and Kmart. It is ironic that they will now die… Read more »
Herb Sorensen
Guest
11 years 4 months ago
We need to see e-commerce, mobile-commerce and bricks-and-mortar retailing as a seamless phenomena, all connecting a retailer with their customers. The “big dog” in the coming retail world will be the retailer(s) that learn to SELL online (not just accept orders) and continues the conversation on an iPhone, a PDA, or other mobile internet device, and then brilliantly uses the bricks-and-mortar experience to enhance and multiply sales. This brings us to the big question, not of holding the line on sales, or even eating more of the competitive pie, but of actually having a much larger retail pie to eat from. A couple years ago, I wrote a white paper on “Five Reasons Your Store Might Sell Five Times as Much.” It is a costly mistake to think that consumers, globally, have peaked out in consumption. Of course this is nonsense for the developing world, that is just getting started. But it is nonsense in every developed market as well. One of the simple reasons you might sell five times as much in your stores… Read more »
Don Delzell
Guest
Don Delzell
11 years 4 months ago
First, attending to the online channel as a unique marketing platform will pay dividends. By extending Black Friday (or starting them early) type promotions, major retailers validated the concept that brick and mortar best practices can and should be adapted and applied to the online channel. Regular and powerful key item promotional marketing drove traffic to major sites in exactly the way that promotional marketing in the real world drives traffic. This is a critical lesson. Shoppers are shoppers, and fundamental motivations and triggers apply, without regard to the channel. What is different is how those motivations are stimulated and what the triggers look like. Major retailers, including Kohl’s, JCP, and WMT all clearly articulated a web-centric promotional strategy this year…and it paid off. Among the biggest innovations has become the requirement to link to or display in-store inventory. Offering the consumer the opportunity to shop in-store, whether the item is in stock or not, is critical to future success. However, that’s not what drove online volume this year. Most major retailers made significantly better… Read more »
Craig Sundstrom
Guest
11 years 4 months ago

“…e-commerce delivered what many saw as surprisingly strong results this past holiday season. According to Coremetrics, online retail sales jumped 13.6 percent …”

I won’t question that “many” were surprised by the results, but should they have been? The answer is “No” (or even “No!!”) E-commerce still accounts for a relatively small portion of all sales, so it hardly seems surprising that it turned in (low) double digit gains; indeed I would have been very surprised if it didn’t…and I expect this pattern to continue for many years. It’s also misleading, I think, to ignore that online sales are usually a substitution for sales in conventional venues; if a consumer buys two fewer of some item from a dept/drug/whatever store, but then buys one from the store’s online site, the store has suffered a loss of one sale; to assume that the store would have lost two sales but for the gift from the online site is fallacious.

But enough with my killjoyism–a Happy New Year to all!

Tim Henderson
Guest
Tim Henderson
11 years 4 months ago

The lesson for merchants from this year’s holiday e-shopping is to not take e-shopping for granted. Obviously this data indicates they aren’t doing that, but there’s always a need to remain vigilant. Just as consumers are growing more comfortable with buying more product online, there are more merchants who are growing more successful at creatively marketing to e-shoppers. Brands should work to replicate this effort year-round and build on it for holiday shopping season 2010. Competitors most certainly will be looking to reach even more e-consumers next year, meaning the brands that were successful in 2009 need to work even harder in 2010.

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