The intense focus on numbers at this time of year can be rather wearing, not to say confusing. Every day it seems we hear about percentage sales that have gone up or down and billions of dollars or pounds spent in stores, online or via smartphones.
However, what matters as much as the numbers themselves is the story behind them and what it all means for understanding the evolving consumer, for quarterly profits and for future strategy.
Take Adobe Digital Index’s final Cyber Monday tally, which includes some really big numbers. US shoppers, it seems spent 16% more this Cyber Monday than last and sales hit $3.07bn, the first time the day broke through the $3bn barrier in the US.
Discounts, smartphones and stock problems
What drove those numbers? Deeper-than-ever discounts, according to Adobe. Whether that’s good news or bad will become clear when November same-store sales reports and Q4 earnings reports are released. For a fashion industry trying to get consumers used to paying full price, discount-driven higher sales could be a double-edged sword that boosts revenue but also slices through margins. We’ll have to wait and see on that one.
Smartphones also helped make the numbers bigger. A lot of browsing was done via mobile and Adobe said 26% of actual transactions were via mobile devices.
But one factor that didn’t drive sales was the huge out-of-stock problem. I’ve already reported news that 15 out of every 100 products returned ‘unavailable’ messages on Monday. That’s no surprise given that, at 17%, US online sales between Thursday and Sunday outpaced Cyber Monday’s 16%. Americans spent around $8.03bn on those four days with the average order worth over $135 leaving many virtual shelves empty by end-of-play on Sunday.
OK, we know online sales exploded. How did that affect trips to physical stores? Store visits in the US were, unsurprisingly, down 10.4% on Cyber Monday, ShopperTrak said, falling to (an albeit huge) $20.43bn.
And a shift in the balance towards online was a key a characteristic of the whole shopping weekend. Over 103m people in the US shopped online over the four-day weekend but under 102m shopped in-store, the National Retail Federation said.
Obviously, lots of people are still shopping in physical stores but with the numbers going down, we could see some major rethinks in retailer initiatives next year.
What did they buy?
Back with that $3.07bn Cyber Monday number, key product categories were dominated by electronics and toys, aided by average discounts a little over 20%. Fashion certainly wasn’t the top priority and I’ve seen some contradictory reports about how the category performed Thursday-through-Monday either in stores or online. But there were some interesting stats released this morning.
Rachel Arthur on Fashion & Mash highlighted figures from Lyst showing that where people were buying clothes and accessories, the big success story wasn’t partywear as might be expected, but loungewear. Consumers snapped up those comfortable pieces that they could buy any time of year but that came with hefty discounts attached. Not convinced? Lyst data showed 13% more purchases of slippers than stilettos, 43% more sweatpants than miniskirts, and three hoodies bought for every blouse.
Rachel’s report also cited a focus on luxe loungewear with cashmere socks, luxury pyjama styles, high-end onesies and blanket scarves all popular. Apparently, Acne’s oversized Canada scarf sold out in minutes across all of Lyst’s global retail partners.
What does this mean for partywear? With many prices now back to ‘normal’ levels after the Black Friday/Cyber Monday frenzy, stores must be hoping that shoppers won’t delay their party purchases too long or panic discounting could hit closer to Christmas.
Analysts at the moment don’t seem to be worried about the high level of discounting with NPD’s Marshal Cohen saying “businesses fared better this year because they planned it out better.”
But there’s no denying that for November/December 2016, they’ll need to up their game again and plan even better still. What are the factors to take into account?
- Sales via smartphone are going through the roof but with sales of tablets at both ends of the price scale (iPad minis and Amazon Fire) surging over the four-day weekend, shopping apps still need to be tablet-friendly.
- Laptop and desktop shopping has stayed popular and was key for higher value transactions.
- Consumers are increasingly happy to shop at unsociable hours and this should be encouraged given the amount of website outages at busier times later in the day. Thanksgiving evening and midnight to 07:00 on Black Friday and Cyber Monday are key.
- In Britain, Black Friday is not seen as a must-do-it day to shop in-store but Saturday is. All the special events retailers lay on won’t necessarily encourage Brits to take the day off when they can head down to the mall for the same bargains just 24 hours later.
- In-store sales are falling on both sides of the Atlantic but are still high. Retailers need to lay on special events but timing is crucial as such initiatives alone won’t lure people to stores (see point above).
- E-tailers need to do just what they thought they’d done after last year – work harder to ensure websites don’t crash.
- They also need to manage inventory more carefully so that fewer goods are out of stock on Cyber Monday.
- We need answers to the question of how long the Black Friday/Cyber Monday ‘season’ really is. We’ve heard talk of Black Friday Fortnight and Cyber Week. Planning how far in advance to kick off discounts and how long to continue them is crucial.
- And of course, retailers must get to grips with the problem of maximising full price sales. Eternal discounting may work for some retail giants but for most businesses, margin protection is what’s key.