A merry and mobile holiday for web retailers

Online retail sales were up 32% on Thanksgiving Day versus last year and 26% on Friday, comScore reports, just counting sales made on personal computers. Counting mobile devices, the increases would be bigger. But NRF and ShopperTrak say total retail sales were off for the holiday weekend.

 

Internet Retailer — Wal-Mart Stores Inc. reported its best three-day stretch of online shopping days Thursday, Friday and Saturday, and comScore Inc. says e-retail sales on Thanksgiving Day topped $1 billion for the first time, two highlights of a strong weekend for e-commerce in which consumers shopped in unprecedented numbers with smartphones and tablets.

But not all sales reports were rosy. Total retail sales over the holiday weekend were down from last year, according to estimates by the National Retail Federation, the leading U.S. retail trade association, and ShopperTrak, which monitors foot traffic to shopping malls and retail stores. A survey conducted for NRF also indicated online sales were lower this weekend, a result out of line with data from several other sources.

Among the more upbeat online estimates came from ComScore, which bases its estimates on the online activity of a consumer panel. The firm estimated today that online sales from consumers shopping on personal computers increased 32% on Thanksgiving Day over the holiday in 2013, and 26% the following day, commonly called Black Friday. From Nov. 1-28, comScore says, desktop purchases from retail sites are up 15%. Adding purchases via mobile devices would likely add 1-2% to those increases, a spokesman says.

ComScore estimates consumer spending via computers on Thanksgiving Day 2014 totaled $1.009 billion versus $766 million last year; on Friday, sales increased to $1.505 billion from $1.198 billion, comScore says.

“The strength we saw in the early online buying rush likely reflects a few things, including overall health in consumer spending, responsiveness to the strong deals being offered online, and perhaps some shoppers opting to stay home on Thanksgiving rather than head out to the stores that opened their doors early,” says comScore chairman emeritus Gian Fulgoni. “Regardless of the particular drivers, it’s clear that the online holiday rush is getting off to a very good start and is reason for optimism as we get into the heart of the buying season.”

Based on data from 4,500 clients, Adobe Inc. reported online sales increased 25% year over year on Thanksgiving Day and 24% on Black Friday, and are up 14% for the holiday season. Purchases on mobile devices accounted for 29% of e-retail sales on Thanksgiving, up from 21% a year earlier, and 27% on Friday, an increase of 3%, Adobe says.

Online marketing firm ChannelAdvisor Corp. says its retailer clients increased same-store sales 20.1% on Thanksgiving over the prior year, 22.0% on Friday and 27.0% on Saturday. Sales by retailers selling on the Amazon.com marketplace increased 45.9% on Saturday compared to the same day a year earlier, driven by earlier promotions by the No. 1 e-retailer in the Internet Retailer Top 500. “They rolled out their Cyber Monday deals early and consumers seem to be responding,” ChannelAdvisor CEO Scot Wingo said on the company’s blog.

Amid the strong estimates of online results, the NRF survey conducted Friday and Saturday painted a very different picture. NRF said total retail spending for the weekend would be down 11.3% to $50.9 billion, compared with $57.4 billion last year. While shoppers said they expected to make 42% of their weekend purchases online, about the same as last year, the survey found that the average consumer shopping online would spend only $159.55, down from $177.67 during the holiday weekend last year. The survey was conducted for NRF by Prosper Insight & Analytics, a consumer research firm.

Asked during a call with reporters how to reconcile the NRF data with other reports of surging online sales, Pam Goodfellow, Prosper’s principal analyst, said the survey is “a snapshot of what consumers estimated they spent.”

NRF president and CEO Matthew Shay told reporters that the weekend results showing lower overall retail sales do not signal a weak holiday season for retailers, but rather that early promotions, including online, led some shoppers to buy before the holiday weekend. He also said that many consumers are confident there will be more attractive discounts to come, and that those consumers feeling better about their income situation may be less likely to rush out to grab Black Friday deals. “This season will continue to be promotional,” Shay added. “Every day will be Black Friday, every minute will be Cyber Monday. You can’t let up for an instant because of the competitive nature of what’s happening.” He said NRF remains confident that holiday retail sales will wind up meeting the association’s forecast of just over 4% growth.

ShopperTrak projected sales in retail stores would be off 0.5% from Thanksgiving weekend last year. The monitor of traffic to physical stores said more retail chains opening stores on Thanksgiving Day resulted in 27.3% more store visits on Thanksgiving day, but 5.6% fewer on Black Friday. “More stores are opening, and earlier, which has caused a shift in shopping patterns,” says ShopperTrak founder Bill Martin.

Aggressive online discounting ahead of the holiday weekend may have reshaped traffic patterns to e-commerce sites over the weekend.

For example, while Saturday traffic to retail sites was the highest since Wednesday, it was 1% lower than the Saturday of Thanksgiving weekend last year, according to the Verizon Enterprise Solutions unit of broadband Internet provider Verizon Communications. On Friday, retail web site traffic was 3% lower than on Black Friday 2013.

“Consumers continue to set the tone for how and when they want to engage with retailers and they’re no longer limited to a specific day such as Black Friday or a set of days,” says Michele Dupre, vice president of Retail & Hospitality. He also noted, “Retailers are finding that consumers are demonstrating a stronger desire to shop online to take advantage of the latest deals, which is indicative of what we’ll continue to see throughout the end of the year.”

Another indicator that traffic is being spread out over the holiday period came from Monetate, a provider of online retail personalization technology. Based on nearly 40 million sessions on retailer client sites Friday, Monetate concluded traffic was down 0.9% compared to Black Friday 2013. However, page views were up 24.7% and conversion rate increased 3.5%. Visits from mobile phones and tablets accounted for 42.49% of all online traffic, an increase of 20.77% year over year. Sales from mobile devices accounted for 26.71% of online revenue, an increase of 12.99%. But smartphone revenue was down 34.4% year over year and conversion rate down 20.8%, possibly suggesting consumers increasingly are using their mobile phones to check prices and store hours, and not necessarily to make purchases.

“Mobile holiday shopping traffic and sales are increasing dramatically as consumers become more comfortable shopping via mobile,” says Monetate CEO Lucinda Duncalfe. “It’s getting easier too, with increased screen sizes and mobile payment systems. But, the decreases in smartphone revenue and conversions rates suggest that brands need to create more relevant, personalized mobile experiences to capture the the holiday shoppers who want to buy on their smartphones.”

Mobile commerce technology provider Branding Brand says tablets and smartphones accounted for 34% of purchases at 35 of its retailer clients on Friday. That was a 48% increase from mobile’s share of purchases last year. Mobile devices accounted for 57% of visits to retailer sites Friday, up 24% from Black Friday last year, and 35% of orders, an increase of 30%. Apple devices accounted for 84% of mobile orders and 90% of revenue. Mobile visits peaked at 10 a.m. Eastern time Friday, and orders an hour later, Branding Brand says.

Skava, another provider of mobile commerce technology, also noted that mobile sales peaked around 11 a.m. Eastern time on Black Friday. Skava says mobile revenue for its clients increased 83% on Friday over Black Friday 2013. Thanksgiving Day revenue was 114% over the holiday last year, with sales peaking around 9 p.m. Eastern, an hour earlier than in 2013. Retailers’ mobile apps accounted for 7% of mobile revenue on Thanksgiving and 3% on Black Friday, Skava says.

Despite the hoopla about Black Friday, some of the largest merchants—including Amazon.com Inc., Wal-Mart and Target Corp.—all raised online prices on average between Nov. 16 and Nov. 28 (Black Friday), according to online price intelligence firm 360pi. However, home improvement retailers Lowe’s Cos. Inc. and The Home Depot Inc. both dropped prices significantly heading into Black Friday compared to their prices the previous week. Macy’s and Bed Bath & Beyond also had significantly lower prices on Black Friday compared to Nov.16.  Amazon generally had lower prices than such competitors as Wal-Mart, Target and Sears, but Wal-Mart’s prices have closely tracked those of Amazon throughout the holiday period, 360pi says.

While the NRF survey suggests a smaller percentage of holiday shoppers plan to go online to purchase gifts tomorrow—52.3% versus 54.8% in the same survey last year—many retailers began enticing them with Cyber Monday offers that took effect today, or yesterday in the case of Amazon.

Among them is Wal-Mart, which began touting Black Friday deals on Walmart.com on Thanksgiving morning, producing the retailer’s second-biggest online sales day ever after Cyber Monday 2013. Target also got started early promoting sales online Thanksgiving morning and wound up with sales for the day up 40% over the holiday in 2013, making it Target.com’s biggest single sales day ever on the web.

Preparing for what it predicts will be its biggest day online tomorrow. Wal-Mart says for the first time its Cyber Monday deals will be available in its stores as well as online. Among the discounted products are 100 items that can be picked up the same day at Wal-Mart stores. The retailer says same-day pickup in its stores has doubled in the past year, though it didn’t provide details on the volume of such pickups.

Other retailers previewing Cyber Monday deals today were Sears Holdings Corp. and Macy’s Inc. Sears says its Cyber Week deals began just after midnight this morning and will continue through 11:59 p.m. next Saturday, Dec. 6.

Amazon is No. 1 in the Internet Retailer Top 500 Guide. Walmart.com No. 4, Sears No. 6, Macy’s No. 8, Home Depot No. 16, Target No. 18, and Lowe’s No. 36.

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