The online musical instruments marketplace offers up to one year of financing to buyers through an online payment service from Affirm.
Consumers are using the web more often to guide purchases.
A confluence of trends and events helped propel e-commerce’s strong growth during the holiday season, according to holiday season reviews by analytics vendor Coremetrics and research firm Kantar Retail.
Kantar says non-store retail sales increased 15.3% for the 2010 holiday season compared with 2009, noting that e-retail sales are the main driver of non-store retail sales; non-store retail sales include online and catalog sales. The research firm’s holiday forecast, issued in October, estimated non-store retail sales would grow 6.5%.
Holiday sales for online and offline retail “blew away last year’s numbers,” says Frank Badillo, senior economist at Kantar Retail. “Holiday sales this year were strong and would rank as strong even at the best of times, let alone for an economy recovering from recession.” He says overall retail sales grew 7.3% when excluding sales of automobiles, fuel, food and drugs.
“We knew that online would be a significant influencer for holiday shopping,” says Mary Brett Whitfield, senior vice president and director of Kantar Retail’s ShopperScape research program. Nonetheless, she says, the role that the web played in influencing sales across channels exceeded all expectations. Eight out of 10 consumers said online influenced their holiday purchases in some way, according to the company’s research.
A Coremetrics analysis of the holiday season demonstrates the growth opportunities that mobile presents. The firm says less than one-tenth of 1% of web traffic came through mobile in 2009. In 2010, that increased to 5.6%. “It really went from being nothing to being a good percentage of overall traffic,” says John Squire, chief strategy officer of Coremtrics, an analytics unit of IBM Corp.
Badillo says consumer spending, which had been on the decline since May, began to rise on the heels of a rebounding stock market in September. Sales growth accelerated after the Nov. 2 midterm elections, which he attributes to alleviating consumers’ and business’ uncertainty about the effect government policies might have on their incomes. The fortuitous timing helped consumers feel okay about spending, and all this happened just in time for them to take advantage of early holiday sales promotions, he says. “The spending intentions of shoppers shifted from ‘spend less’ to ‘maybe I can spend more,’” he says.
Badillo also attributes some of the sales bounce to an after-effect of the federal homebuyer stimulus program that expired in April. The homegoods channel, which includes appliances, consumer electronics, furniture and home improvement sales, grew 7.9% across online and offline retail channels, up from a forecast of 2.5%. He says consumers who bought homes early in the year likely waited until the end of the year to take advantage of sales and get ready for holiday celebrations. He says early holiday sale promotions inspired a jump in spending and that that spending growth was concentrated in the early part of the season. Coremetrics data show 18% of all online holiday sales took place from the day after Thanksgiving, also known as Black Friday, to the following Monday, referred to as Cyber Monday.
Online retailers also did a better job of swaying consumers to buy online who previously used the web to research gifts but then bought offline, Kantar data show. Large e-retailers ranked in Internet Retailer’s Top 500 Guide, including Amazon (No. 1), QVC (part of No. 11-ranked Liberty Media Corp.), Walmart (No. 6), Kohl’s (No. 43) and J.C. Penney (No. 16), saw significant gains from 2009 among shoppers who completed online transactions. The percentage of online gift buyers who visited Amazon.com and reported completing a transaction on that site during the holiday season rose from 72% in 2009 to 80% in 2010. At QVC.com, the comparable numbers rose from 47% to 65%. At Walmart.com, it went from 34% to 46%. “With few exceptions, retailers were able to convert more online shoppers into online buyers,” Whitfield says.