With Halloween just past, it might seem a bit early to start talking on winter holiday spending, but retailers are all aware that Black Friday is only 22 days away, and with it the craziest, most challenging time of the year to be in retail. In the United States, and increasingly in Canada, the Friday after Thanksgiving (which, this year, is November 23rd) kicks off the official start to the winter holiday shopping season. The Thanksgiving long weekend sales now extend through Cyber Monday, and revenue from that weekend alone accounts for a major portion of yearly revenue for retailers.
A bad holiday season can make or break a struggling retail store. And being able to provide excellent online customer service is only going to grow more important to retailers looking to compete in the hyper-competitive market for their share of the multi-billion holiday spending market. Given the increasing importance of multichannel customer service to retail customer experience, we’re going to do a countdown to Black Friday, with a series of posts about the Thanksgiving weekend shopping bonanza and what lessons can be learned on past trends and current predictions.
Online is growing, but bricks-and-mortar retail is here to stay (for now)
It’s no secret that consumer preferences around shopping continue to evolve, as illustrated by the evolution of showrooming. Even a few years ago, it was commonly feared that showrooming would lead to the death of bricks-and-mortar retail. But now it is understood that the behaviors surrounding showroom have continued to evolve and grow more complex:
“As recently as five to six years ago, showrooming was all the rage and the thing every retailer worried about,” said Rod Sides, who leads Deloitte’s US retail, wholesale and distribution practice. “Now people are doing webrooming and going to stores as the last part of their shopping journey…. Consumers are looking for the right product and the right experience. They want retailers to meet them wherever they are. They don’t shop by channel.” –Andria Cheng, eMarketer Retail
Online shopping might be growing in popularity, but brick-and-mortal retail stores are still very much alive. For the second year in a row, Black Friday/Cyber Monday revenue for bricks-and-mortar stores were flat, rather than taking the expected loss. Further, consumers surveyed about their plans for holiday shopping in 2017 revealed that:
- 96% of surveyed consumers planned to make purchases from stores that had both online and physical store options, and 40 percent of those shoppers planned to pick up their items in-store
- 81% of shoppers planning to pick up online purchases in-store also planned to purchase additional items in-store
So with that in mind, just how did online Black Friday/Cyber Monday sales do?
Black Friday/Cyber Monday online Sales: 2017 v. 2018
US retailers made $7.9 billion in online Black Friday sales, which was up 18% from 2016 Black Friday online revenue. Despite the name, Cyber Monday didn’t do quite as well, netting $6.59 billion in online sales – a 16% increase over 2016. A staggering 123 million Americans – or more than 37% of the total population of the United States – took part on online sales for Black Friday/Cyber Monday, with average expenditures of $117.80.
2017 also showed that year-over-year, revenue from the Thanksgiving holiday weekend only continues to grow at an accelerating pace. Online revenue from long weekend sales grew dramatically from the previous year:
- Thanksgiving Day online revenue was up 30%
- Black Friday online revenue was up 32%
- Cyber Monday online revenue was up 15%
- Online revenue for the first week of the holiday shopping season was up 26%
In 2018, another strong performance is expected for the official kickoff to the holiday shopping season. It’s predicted that in 2018, the Thanksgiving long weekend will make up 1/5 of total holiday retail sales. Holiday retail sales overall are expected to account for 30% of total yearly revenue for retailers overall – with some industries (like jewelry) going as high as 40% of yearly revenue. It is also widely anticipated that, given the increasing level of competitiveness for this gargantuan market, that Black Friday promotions and deals will be leaked earlier than previous years.
Online shopping: mobile is the new normal
Nearly all of the growth in Black Friday/Cyber Monday revenue has been driven through online sales, and with good reason. 86% of consumers shop on two or more channels.
The other major trend to watch with regards to Black Friday/Cyber Monday eCommerce is the increasing prevalence of mobile holiday shopping. 2017 was the first year that online retail sites saw less holiday weekend traffic from desktop than mobile; mobile accounted for 60% of BF/CM eCommerce traffic (up from 53% in 2016). However, something that should be concerning to retailers is the disproportionate gap between mobile traffic and mobile orders; only 41% of online orders placed during BF/CM in 2017 were placed over mobile – a nearly 20% gap! Even more concerning is the fact shopping cart abandonment on mobile actually increased by a dramatic 15.9% over 2016.
This shows that retailers can no longer afford to be complacent about their mobile customer experience, because the damage done to a brand by poor mobile CX is often permanent: After only 3 seconds of waiting for a website to load, 57% consumers will abandon that website, and 80% of those consumers will never return. This shows that if retailers want to stay in the game, they need to put effort into optimizing their mobile customer experience. Having a smooth, functional, and easy mobile shopping website is no longer optional, it’s required.
Unfortunately, when it comes to rapidly evolving consumer expectations for online retailing, most retailers are failing to keep up. Moreover, the gap between retailer self-assessment and customer opinion is shockingly large:
- 84% of retailers feel that their digital maturity is highly sophisticated
- but only 1% of consumers feel that the digital retail experience meets their wants and needs
2018 Black Friday/Cyber Monday eCommerce, Summarized
Improving the online retail customer experience is a complex topic, so we’ll dive into that next time. In the mean time, if you have any questions about how you can improve your digital customer experience, click here to get in touch with one of our digital experts, or click here to book a demo and see the ITC digital customer service platform in action.