It was time to shop and the US citizens did it in style. According to National Retail Federation (NRF), more than 174 million people hit the stores over the 5-day holiday season with an average spending of US$335.47. A majority of users, around 58 million, shopped online, and more than 51 million of people spent their money in brick-and-mortar stores, while spending of around 64 million shoppers was distributed among both.
Online Shopping Over Offline Shopping
As indicated by NRF finding, it seems like more users preferred shopping from the comfort of their home, rather than going to crowded stores; perfectly highlighting the impact of digital technology in the retail industry. Online retailers too did not leave any stone unturned to lure consumers, offering some lucrative deals to ensure that nearly every visitor gets converted into a buyer. In addition, leading up to the holiday weekend, online retailers heavily invested in improving their website, delivery mechanism, and tightening their inventory to ward off any obstacle that would weigh on profits. The results are for everyone to see.
Online Stores Make Merry!
According to another report* this years’ holiday season so far, Nov. 1 to Nov. 27, has seen about $40 billion in online shopping revenue, which translates into a YoY increase of nearly 18 percent. The major chunk of revenue came on three big days, Thanksgiving, Black Friday, and Cyber Monday. In fact, the numbers are so good that it seems like the traditional turkey-dining-with-family has some serious competition.
The madness began on Thanksgiving, which resulted in $2.87 billion revenue, a staggering 18 percent increase YoY, while the day after Turkey Day raked in $5.03 billion for online retailers, a YoY growth of around 17 percent. It seems the best was reserved for the last, as Cyber Monday turned out to be the largest US online shopping day in history with sales of around $6.6 billion, a 16.5 percent increase YoY.
As has been the trend over the last few years, most shoppers picked up their mobile devices to shop. Almost 55 percent of page visits on online retailers were via mobile device with a conversion rate of approximately 37 percent. Phones were popular among the buyers, registering almost 45 percent of visits and generating about 26 percent of revenue. Other than that devices such as Chromecast, Roku streaming devices, the Nintendo Switch, TVs, laptops, gaming consoles, and toys, were among the biggest sellers, all thanks to the heavy discounts.
With several more interesting features, such as AI-based Virtual Assistants, inter connected devices (IoT), and Virtual Reality trial rooms going to be reality soon, we expect exponential increase in online sales.
What Now for Brick-and-Mortar Stores?
This year’s holiday season clearly highlights that brick-and-mortar stores are no longer the first preference of consumers. In contrast to the 18 percent surge in online sales, the brick-and-mortar stores registered a drop in sales of about 1.6 percent YoY.
It is clear that consumers are preferring the medium that augments their shopping experience. And that’s not it – Field Agent, in one of its study reveals “poor customer service” as a prominent reason why consumers prefer online shopping over shopping at brick-and-mortar stores. The writing is therefore on the wall for our friendly neighborhood stores to up their game and adopt technology if they want to compete with online retailers.
The same study highlights that around 58 percent of retailers invested in technology to manage holiday season rush and did fair business. Automated fulfillment and streamlined front-end experience are some immediate measures that can help retailers gain some ground back.
Overcome “Technology Ignorance”
“Technology Ignorance” is one of the major reasons why mid-market retailers and wholesalers find it difficult to cater to high demands during holiday season compared to online and larger retail giants who have embraced technology. The fallout of lack of technology investments include poor customer experiences and inability to meet increased demands owing to lack of process automation and other business inefficiencies. Instead of embracing technology, the retailers and wholesalers turn to short-term and inefficient solutions, such as hiring more staff and increasing inventory levels as an escape plan, hurting their bottom line.
Embracing technology, on the other hand, can do a word of good for mid-size retailers, such as save precious time and money during peak season. Big data can help retailers refine back-office functions including billing, processing, fulfillment, and shipping, thereby, ensuring better management of demand and level of service that customers expect. In addition, investing in retail management software can eliminate spreadsheet order processing while smart cloud technology ensures adequate safety stock and produces faster order processing.
*Adobe Analytics, which measures transactions at the largest 100 U.S. web retailers.
Until Next Time,
Ref – https://talkbusiness.net/2017/11/technology-gaps-could-cost-average-retailer-300000-this-holiday-season/
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