Retailers Don't Want to Miss Out on Thanksgiving Day Sales
Online retail traffic for Thanksgiving Day increased 6% over 2011, reaching $633 million in revenue. IBM Smarter Commerce reported a 17.4% revenue growth on Turkey Day – which is not necessarily surprising given that many retail outlets were open, but could indicate that despite the public backlash against encouraging shopping during the major US holiday, many retailers may be apt to do the same next year so as not to miss out.
Black Friday: Driving Significant Mobile Traffic
With 57 million shoppers in the US alone, Black Friday 2012 set a new record of reaching $1.04 billion – surpassing the $1 billion mark for the first time ever. Brick-and-mortar traffic was up only 3.5% and revenue actually dropped, representing an increase in tech-savvy buyers this year that preferred shopping via web and mobile over mad dashes at retail outlets. Internet Retailer reported that mobile traffic exceeded average daily mobile traffic by 155% on Black Friday, contributing significantly to the 36% online revenue growth.
Cyber Monday Sales Set Single Day Record
Cyber Monday maintained its record as the highest spending day ever at $1.98 billion, surpassing the $1.5 billion that was predicted over 2011’s $1.25 billion. Despite the astonishing growth, it was reported that average sale value on Cyber Monday had dropped by nearly 7%; instead consumers opted for a bigger bang for their buck, as average items per order was up 14.1% to 8.34 items per purchase. Nevertheless, retailers like Build.com and Wayfair.com saw revenue growth of 40% and 60%, respectively, the latter reporting 20% conversion rates.
OrderDynamics Merchants Continue to Outpace Industry Growth
For OrderDynamics merchants, the Black Friday through Cyber Monday weekend yielded astounding results. The OrderDynamics Platform processed 162% more orders over the same weekend in 2011, allowing OrderDynamics retailers to generate 178% more revenue. Cyber Monday was the busiest of the 5 days, peaking at 9pm. “It’s amazing what OrderDynamics retailers accomplished this year,” says Michael Benadiba, CEO at OrderDynamics, “the dynamic nature of our SaaS platform allows us to maintain excellent scalability that accommodates big traffic and order spikes. We have sophisticated order management and order processing systems available to all OrderDynamics merchants through our SaaS software that enable high order capture rates, and allowed us to process 154% more transactions over last year.”
Carain Buchalter, Marketing Director at OrderDynamics’ merchant Henry’s Camera, stated that despite slim margins on cameras, additional items and School of Imaging packages helped push some Henry’s Camera stores up 200% over expected revenue. Buchalter also reported that this year’s Black Friday online revenue exceeded last year’s Boxing Day revenue – which is traditionally the busiest Canadian shopping day of the year.
The explosive growth in revenue for OrderDynamics merchants indicates that Black Friday through Cyber Monday weekend success can only continue to trend upward in years to come. Revenue from Canadian OrderDynamics retailers alone surpassed 2011’s total OrderDynamics revenue by 18%. New retailers experiencing their first Black Friday weekend on the OrderDynamics platform contributed to 32% of this year’s revenue, and expectations for next year are positive given the growth of legacy merchants.
Canadian Retailers Aggressively Tackle Black Friday and Cyber Monday
Though Black Friday and Cyber Monday have not traditionally been Canadian phenomena, last year’s Canadian interest sparked proactivity in Canadian retailers.
A pre-Black Friday poll conducted by Ipsos Reid in Canada showed 44% of Canadian consumers intended to take advantage of Black Friday and Cyber Monday promotions this year. Considering that 2011 saw an 8.3% increase in Canadian Black Friday sales, and up to 40% of cross-border shoppers make the trek from Canada, retailers decided to offer their own Black Friday and Cyber Monday deals – including the tax break. Reitman’s in Quebec mall, Place D’Orleans, offered shoppers who made purchases between 12pm and 5pm on Black Friday to have the tax returned to them in a gift card at the mall’s customer service location. Sears Canada also admitted to offering items at extremely low margins, but acknowledged that’s what it takes to keep Canadians shopping in Canada. Cadillac Fairview, manager of a chain of reputable Canadian malls, opened their malls as early as 7 am to accommodate those who wanted to shop.
Communications Manager for Future Shop, Elliot Chun, says that Black Friday sales were held all weekend long at Future Shop, and given the traffic seen, the sale may continue for an entire week. Chun states the importance of considering the fact that many people in the US have the day off from work on Black Friday as a result of the Thanksgiving holiday, and as such, Canadian retailers need to offer promotions that can accommodate the Canadian workforce’s schedule.
Mobile Commerce Has Arrived In A Big Way
Mobile was a major player this year, contributing to 22% of Cyber Monday sales – a 100% growth in mobile purchases over 2011. The iPad appeared to be the mobile weapon of choice during the 5-day period between Thanksgiving through Cyber Monday, encompassing 68% of mobile traffic. The iPhone and Android tied at 15% each. Showrooming proved to play as big a part as expected according to reports prior to the holiday weekend, as 13% of the weekend’s mobile shoppers did so while physically located in a retail store. However, Jay Henderson, Strategy Director of IBM Smarter Commerce, asserts that retailers who performed the best over the holiday weekend were those who utilized multichannel strategies to encourage purchases, which may mean Showrooming could be helping rather than harming.
Despite Slow Growth, Social Commerce Still Matters
With an increasing amount of important being placed on social commerce over the past year, it was interesting to see how it fared during this year’s Holiday weekend. The contribution was meager, with only 0.41% of all online sales coming from social media traffic. It is noteworthy, however, that Facebook stores saw a 240% increase in sales over last year. Facebook and Twitter accounted for 77% of social sales, while Pinterest comprised 15%.
Notable Trends
Some notable trends seen during this weekend that bring with them some lessons in preparation for next year’s holiday shopping weekend are as follows:
- Peak order times on Black Friday were between 10:30am – 11:45am, and 11:25am on Cyber Monday. This indicates a lot of desk-shopping while customers have settled into their work day and are checking emails, and may be the ideal time to distribute email marketing campaigns that will stimulate purchase.
- The distribution of holiday-themed eMail marketing campaigns began in late October. Many retailers sending these out offered increasingly steep discounts over time. This, coupled with the fact that average order values were down on Cyber Monday despite generating more transactions, could indicate that consumers are being primed to wait for the best deal. Retailers may need to be aware not only of how they will compete with competitor prices, but also how they will compete with their own past pricing to continue to attract the deal-seeking consumer.
- With 13% of mobile purchases made while in-store, Showrooming is not going away. Retailers need to be aware of this should consider creating multi-channel strategies to work with Showrooming, rather than against it.
- Given such substantial growth during this holiday weekend, it will be interesting to see how the remainder of Q4 fares. Are consumers going to continue to shop? Or did they get everything they needed this past weekend? How can retailers maintain momentum throughout Q4?
- How much of their resources are retailers willing to allocate to this 5-day weekend, and what will they do for the rest of Q4 if their results fall short? As Q4 is the most critical quarter of the year for many retailers, are they comfortable with the notion that a large and growing portion of their sales comes from just a 5-day period?
- Peak order time on Thanksgiving day was 8:30pm, with traffic earlier in the day coming from smartphones, and evening traffic primarily from iPads.
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