In its second-largest acquisition, Amazon buys the company for $970 million.
47% of shoppers say they’ll shop online this holiday, Deloitte says.
Here’s fine news to ring in the season: The web will be the top shopping destination for consumers shopping for holiday gifts this year. 47% of consumers say they expect to shop online, making it the No. 1 answer among the more than 5,000 online respondents to Deloitte LLP’s annual holiday shopping survey. It is the first time in the survey’s 28-year history that the web usurped a bricks-and-mortar store format to claim the top spot.
Deloitte’s findings revealed some even finer news for online retailers: 38% of those who expect to shop online say they’ll spend more than half of their holiday budgets on the web. Within that 38%, 20% say they’ll spend 51-75% of their budgets online and 18% say they’ll spend more than 75% of their holiday budgets online. The remaining 62% will buy at least half of their gifts offline.
Shoppers, regardless of where they’ll shop, will spend an average of $421 on gifts this year, up 9% from $386 last year, Deloitte says. That amount rises, however, among consumers who will shop across web and store channels, and use their smartphones to help them shop this season. Consumers who say they’ll use smartphones as shopping aids this season say they will spend an average of $480 on gifts, while consumers who shop on the web, in stores and with their mobile phones will spend $558 on gifts. That means the multichannel mobile shopper will spend 32.5% more than the average shopper and 56.7% more than consumers who shop only in stores without the help of mobile phones ($356).
Additionally, 71% of consumers say they expect to take advantage of free shipping offers this season. 47% expect to use free returns; 44% expect to use price matching; and 35% expect to order a product online and pick it up in a store.
“Immediacy, service and selection will be paramount this year, and retailers need to offer a seamless, easy-to-navigate experience between their online, mobile and brick-and-mortar channels,” says Alison Paul, vice chairman and retail and distribution sector leader at Deloitte.
The web has been inching its way up as the most-cited shopping destination by consumers for the last several years, from 44% in 2011 to 45% in 2012 to 47% this year. At the same time, the former No. 1 store format, bricks-and-mortar discount/value stores, bumped along. In 2011, 48% of consumers said they expected to shop discount/value stores. In 2012, that increased to 51%. This year, the discount/value store format dropped to 44%.
Other top store formats consumers expect to shop this season include: electronics/office supply/computer stores, 21%; off-price stores, 21%; warehouse club stores, 20%; toy stores, 20%; outlet stores, 20%; restaurants/fast food establishments, 17%; home improvement stores, 15%; sporting goods stores, 14%; dollar stores, 14%; specialty clothing stores, 13%; drug stores, 13% and supermarkets, 13%. Consumers say they expect to shop across an average of 4.5 store types.
32% of consumers in Deloitte’s online survey say they’ll do the majority of their holiday shopping in December. Some of those shoppers likely will take advantage of Free Shipping Day, which this year takes place on Wednesday, Dec. 18. Free Shipping Day is a marketing promotion in its sixth year where hundreds of online merchants offer consumers free shipping with delivery in time for Christmas. The organizers of the promotional day say participating retailers this year include RadioShack, No. 296 in Internet Retailer’s Top 500 Guide, Sports Authority (No. 245), Harry & David (No. 132) and Bass Pro Shops (No. 90). Last year, online sales on Free Shipping Day surpassed $1 billion, according to comScore Inc., which did not estimate how much of those sales were tied to the shipping promotion. Free Shipping Day last year occurred on Monday, Dec. 17, and had more than 1,000 online merchants participating.
“Free Shipping Day has always been the procrastinator’s holiday,” says Luke Knowles, Free Shipping Day’s CEO. “We want to give people an alternative to the early-bird shopping events.”
Those early-bird shopping events—namely the Friday and Monday after Thanksgiving, days commonly referred to as Black Friday and Cyber Monday—are still expected to lure shopper spending. 11% of respondents to the Deloitte survey say they’ll do the majority of their holiday shopping on Black Friday, and 6% say they’ll do so on Cyber Monday. Further, FedEx Corp. says it expects Cyber Monday, which this year falls on Dec. 2, will be its busiest shipping day of the year. The shipper says it expects to ship 22 million packages that day, an increase of 11% over its busiest day in 2012, which was Dec. 17 and coincided with Free Shipping Day.
FedEx says it anticipates the first week of December will be its busiest of the year. The shipper says it expects to process 85 million packages that week, up 13% from its busiest week in 2012.
The day after Thanksgiving—the unofficial but traditional kickoff for holiday shopping and promotions—falls later in the calendar this year, leaving consumers and retailers with fewer days to shop and sell holiday gifts this year. In response, some retailers will launch holiday promotions in late October, and such retail chains as Macy’s Inc., J.C. Penny Co. Inc. and Kohl’s Corp. will open their doors on Thanksgiving night.
Peter Cobb, co-founder and senior vice president of e-retailer eBags Inc., says he’s pushing eBags’ promotional calendar up significantly this year. “Before we would have started rolling out a few specials Nov. 14; now it’s Nov. 1,” he says. “We have them all cued up.” EBags is No. 149 in the Top 500 Guide.
E-retail sales in the United States this holiday season will increase between 13% and 15% compared with last year, says Shop.org, the e-commerce arm of the National Retail Federation trade group. Holiday web sales in November and December could reach $82 billion, Shop.org says.