Retail Sales for 2011 are Positive
Yet there is some hesitancy to thinking this a return to the Good Old Days of retailing.
First the numbers.
The numbers vary, yet the trend is consistent. People spent money on Black Friday and there are strong indicators that Cyber Monday will show historical sales as well. Per the National Retail Federation study, conducted by BIGresearch, weekend sales reached an historic level of $52 Billion with the average shopper’s expenditure reaching $398.62 this weekend, up from $365.34 last year. Clothing and Electronics were the most selected gift items.
Not too surprising, shoppers turned to their
mobile phones and tablets to do their shopping research or to actually purchase products online. NRF asked how shoppers would use their smartphones and tablets over the weekend as well. More than one-quarter (25.7%) of Americans with tablet devices said they did or will purchase items with their devices, and 37.4 percent will or have researched products and compared prices with their tablets. Overall, more than half (57.1%) said they have or will use their tablet devices to shop for gifts this weekend.
According to a survey conducted for Shop.org by BIGresearch, 122.9 million Americans plan to shop on Cyber Monday this year, up from the 106.9 million who shopped on Cyber Monday in 2010. Eager to meet consumers’ demands, nearly eight in ten (78.4%) retailers will have a special promotion for Cyber Monday, according to a survey released last week.
“With promotions like flash sales that only last an hour or deep discounts on selected lines, shoppers know they can win big on Cyber Monday,” said Vicki Cantrell, Executive Director of Shop.org. “In addition to putting the finishing touches on their websites, retailers have invested heavily in mobile apps and related content as the appetite for Cyber Monday shopping through smartphones and tablets continues to rise.”
Cyber Monday shoppers planning to use their smartphones or other mobile devices continues to grow. In just two years, the number of Americans saying they would use their mobile device to shop on Cyber Monday has nearly tripled from just 3.6 million (3.8%) in 2009 to 17.8 million (14.5%) in 2011. Even compared to figures from last year, the number of people using their mobile devices on Cyber Monday has more than doubled (2010 – 7.3 million and 6.9%).
View corresponding survey on estimated number of Cyber Monday shoppers.
More Online Retail Sales Data
comScore reported U.S. retail e-commerce spending for the holiday season-to-date, $12.7 billion has been spent online, marking a 15-percent increase versus the corresponding days last year.
Per comScore, Black Friday (November 25) saw $816 million in online sales, making it the heaviest online spending day to date in 2011 and representing a 26-percent increase versus Black Friday 2010. Thanksgiving Day (November 24), while traditionally a lighter day for online holiday spending, achieved a strong 18-percent increase to $479 million.
The full version of the press release is available at: http://www.comscore.com/Press_Events/Press_Releases/2011/11/Black_Friday_Boasts_816_Million_in_U.S._Online_Holiday_Spending
Yet, IHS Global Insight, a forecasting firm, says e-commerce retail sales growth has outpaced total retail sales in each quarter since the fall of 2008. From July through September 2011, online retail sales reached 4.6 percent of the total retail sales — the highest share ever recorded. The firm “is projecting that seasonally adjusted e-commerce retail sales will increase 12.5 percent year-on-year in the fourth quarter and surpass $50 billion for the first time.”
What Do the Retail Numbers Mean?
Mostly, the numbers mean there has been some bent up spending demand and consumers are unleashing it this Holiday Season. These figures don’t erase any of the current financial predicaments most American’s find themselves…a slowing to non-existent job market, high unemployment, a depressed housing market, a general uneasiness with what is happening in Europe and how that may impact our financial affairs.
One also has to factor in the deep, deep retailer discounts that are being offered and how those incentives are coloring these rosy record breaking numbers. While retailers typically make about 40% + of their profits during the Holiday rush, that may be difficult if the discounts to get the customers into the stores or onto the e-commerce sites are too deep. In other words, once the discounts disappear, will there still be shoppers to make up for the discounts? Or are retailers simply training their customers to postpone their purchases until the discounts come into play?
One clear finding from these data are is that every retailer, big and small, needs to address e-commerce. The trend is unmistakable. If you don’t currently have an e-commerce component to leverage your brick and mortar sales, you should because you’re missing out on a lot of sales and this tread will continue to grow. E-commerce should be one of your first goals for 2012.
Are you offering deep discounts this Holiday Sales Season? If so, share how will this impact your overall profitability this year?