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Holiday Season Sales Diagnosis

The 5-day period between Thanksgiving and Cyber Monday produced a record $34 billion in retail ecommerce, up from last year’s takings of $28 billion.

Despite the record taking holiday season, the figures deflated the ballooning optimism among many analysts, as consumers headed early to retailers who were already offering discounts that remained in place from this year’s delayed Prime Day.

The frenzied 5-day shopping season looked like a different animal this year amid worse waves of the pandemic sweeping the country. Consumers have been wary of heading out to stores and have preferred browsing the digital aisles and buying online.

Sales from ecommerce during the long shopping weekend rose 20.6% from last year. Many analysts had expected better, including Digital Commerce 360, whose forecast of 35% growth was wildly optimistic.

Brands have been luring seasonal shoppers for a few weeks already, spreading out the usual peaks of shopping season sales and flattening them out over a longer period of time. Operating at overcapacity for many months now, online companies have been acutely aware of flatting sales across a broader period in order not to completely burden their logistics and supply chains, leaving warehouses dry and customers annoyed.

Black Friday battles Cyber Monday

Not everything about this year’s holiday shopping season has pulled out surprises. Sales on Black Friday continues to chase after Cyber Monday sales – but it’s closing the gap. Despite the growth of Cyber Monday sales being the slowest of all the “Cyber 5” days – Thanksgiving, Black Friday, Small Business Saturday, Sunday, and Cyber Monday – it still leads in terms of total online sales, recording $10.84 billion. As for Black Friday, they gained some ground on its cyber rival, with its sales increasing 21.6% to reach $9.03 billion.

Holiday Season Sales Diagnosis

Cyber Monday accounted for almost one-third of all sales across the 5-day shopping period. But its decelerated growth has opened up the opportunity for other shopping days to catch up. And indeed, Black Friday closed the gap and neared the $10 billion milestone.

So what’s behind the advancement of Black Friday? Generally, the bargain sales day has been the most popular shopping day in the US for the last decade and a half. Synonymous with store-centric sales, apocalyptic lines and chaotic scenes of consumers trampling over one another to grab whatever discount catches their eye. Yet each year, brands and retailers on Black Friday have been rolling out more and more sales for online shoppers. This extension into the digital was compounded this year given the large restrictions of in-store shopping.

In fact, store traffic on Black Friday was cut in half this year.

A quick startup

But it wasn’t only Black Friday that performed well when it came to ecommerce. One of the quieter shopping days rose to the occasion. The fastest growing day among the 5-day shopping period was Saturday, also known as Small Business Saturday, the 10-year campaign to promote sales of independent and smaller shops. With a strong public sentiment of helping more vulnerable, smaller businesses during the pandemic, this has translated into stronger spending habits.

Just over 68 million shoppers spent their dollars online during Small Business Saturday, spiking 30.2% year on year, reaching $4.68 billion. 

Holiday Season Sales Diagnosis

Online, online, online

As we all knew, consumers have shifted much of their shopping online, skipping holiday weekend store visits completely, or choosing omnichannel services which limited their exposure. Around 57% of respondents said that they’re shopping more online, specifically due to the pandemic, which is a massive amount of consumers that are adjusting their habits. And online exclusive shoppers increased by 44% since last year during the 5-day period. In comparison, only over 40 million consumers shopped exclusively in stores. But an additional group of more than 50 million actually shopped across both channels.

Many among the latter group have been individuals who have taken advantage of curbside pickups, and BOPIS (ew!) offerings, which have spiked massively in popularity throughout the year. In fact, these two methods have risen just over half (52%) since last Black Friday. During Cyber Monday, curbside pickup sales increased 30% from last year. During the entire period, those brands and retailers who utilized these methods of sales increased their ecommerce by almost one-third (32%) from last year.

And considering the final weeks of this year, these types of omnichannel orders are expected to ramp up even more, as shoppers become even more agitated about getting their presents and gifts in time for Christmas and New Year.

Transparent about delays

Holiday Season Sales DiagnosisFor quite a few years now, retailers have been trying to squeeze the size of sales during the period to ease the pressure on its logistical supply chain, while prolonging the rise of sales around the holiday season. Yet this issue had never really been addressed properly until the pandemic emerged, converting a desired change into a necessary adjustment.

Brands and retailers have had to put in a massive effort to handle the expectations of shoppers regarding the availability of products and dredded shipping delays during the holiday season. This year has been unparalleled in terms of how much stress can be placed on stock levels, inventory, and logistics – in fact, some analysts on the extreme edges may even believe that the whole year was one big conspiratorial experiment to test these extremes.  

Take for example the multinational Costco. If you head to their HCL Commerce-powered homepage you’ll notice a banner that links to a statement from its CEO, Craig Jelinek, which addresses this issue. It reads: “This holiday season, online shopping and shipping volumes are expected to be at an all-time high. As a result, small parcel delivery delays are expected. We encourage you to shop early this year to ensure that your small parcel items arrive on time.”

And then there’s the beauty and cosmetics brand Tarte Cosmetics. Powered by the ecommerce platform, Salesforce Commerce Cloud, which is a favorite of big-volume retailers who need the ability to integrate into complex ERP systems, carry out multivariate testing, and personalising digital experiences on a number of levels from the individual customer to the country and regional level.

Tarte is also issuing a statement to its customers, declaring: “Heads up, tartelette! Due to high order volume & extra precautions at our warehouse, your package might be delayed getting to you. We’re working to get your order to you ASAP & will send you an email with tracking information as soon as it ships!”

And then there’s jewelry retailer Jared, who is telling its customers: “Due to the current situation with COVID-19, you may experience shipping delays.” There is a Christmas shipping and delivery chart with specific order deadlines for holiday arrival for a variety of items.

Other brands put it much more plainly. For example The North Face, which calls on its customers to get their purchases done early: “Best way to get gifts on time? Shop early. This year, shopping early is a must. Get first pick of gear (and avoid shipping delays) by ordering ASAP.”

And it doesn’t matter the industry. Everywhere from Shutterfly (photography) and UncommonGoods (retailer) to Pottery Barn (furniture) and Sears (department chain) have all been crystal clear on possible delays and how to avoid them – both in email campaigning as well as on their homepages.

More broadly, retailers are getting their customers to get used to “the change environment, and consumers are responding to the messaging and evolving their behavior,” said Matthew Shay, CEO of NRF. 

“People have been sensitized based both on the messages that have been out there but also on past experiences when, in the early days of the pandemic, there were stock-outs, and retailers were chasing inventory in some categories. 

“And people are responding because they generally are aware of the possibility that, if they wait too long, they’re not going to be able to find what they’re looking for.”

Pushing back promotions

Holiday Season Sales DiagnosisAround 42% of consumers say that they will shop earlier given that delivery times in the holiday season may be stretched longer. And retailers got their message out early and clearly to dilute the anxieties among consumers about delays. And they also incentivized early purchasing by laying out nice discounts earlier.  

Discounts extended all the way back in October with the delayed Prime Day setting the pace. And it seems to have worked. According to one NRF survey, more than half (52%) of holiday shoppers said that they already took advantage of early sales discounts this year.

And the discounts were long and wide. For example on October 13, almost one-quarter of the top 100 online retailers had promotions running on their sites – the day this year’s holiday season kicked off (six weeks before the traditional Thanksgiving kicks things off).

The extraordinary year has provided extraordinary discounts. More than half of the top 100 offered deeper discounts this year on Prime Day to compete even harder with Amazon’s sales event. And by November 23, days before Black Friday, most top retailers (76%) were already offering Black Friday deals.

Looking at the period between November 1 to 19, ecommerce rose by 29% from the same period last year. “Heavy discounts and aggressive promotions starting in early November succeeded at getting consumers to open their wallets earlier,” said director of Adobe Digital Insights, Taylor Schreiner.

So there you have it. The diagnosis of the 5-day shopping period between Thanksgiving and Cyber Monday. And with two weeks remaining of this wild and unforgettable year, we hope you’ve got all your presents and gifts bought already – or at least 99% of them – and wish you a happy (as possible) holiday.

PS: ArganoUV is one of the world’s leading Salesforce Commerce Cloud experts. Contact us to see how we can work together.

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