JD.com and Alibaba create indexes to identify Chinese shoppers’ spending trends, which help retailers gain insight.
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The strong early promotions had shoppers polishing off their shopping earlier in the season than in previous years, but that had detrimental effects on December sales. A poll of 8,333 U.S. consumers conducted Dec. 4-10 by the National Retail Federation found consumers had finished 56.5% of their holiday shopping, up from 46.5% at the same time in 2011. 11.3% of consumers in the survey said they were done with their holiday shopping.
"Sales for a lot of retailers were soft in December 2012 and that's because companies pushed so many promos in November," says Sucharita Mulpuru, vice president and principal analyst at Forrester Research Inc. "All they did was push up transactions earlier in the season that were going to happen anyway, and they cut into their margins as well."
Indeed, e-commerce growth rates growth fell to 9% the week of Dec. 3, according to comScore, well off the Thanksgiving week growth of 21.0%.
Among the e-retailers that saw sales fall off before the end of the holiday season was Thomas Nakios, owner of apparel e-retailer Lilla P LLC. Nakios says sales started off very strong. LillaP.com's Black Friday traffic more than doubled, helping to drive a 119% increase in revenue compared to the same day in 2011. Traffic on the Monday after Thanksgiving rose 215% and sales increased 136% year over year.
That influx in traffic and sales at least partly stemmed from deal-minded consumers responding to a 25% site-wide discount plus free shipping promotion that Lilla P ran Black Friday through Cyber Monday—an increase from 2011's discount of 20% with free shipping over the same time period.
Sales from mid-December through the end of the month, however, slowed after the web retailer ended the site-wide sale, and from Dec. 15 through Dec. 31 fell nearly 30% year over year, Nakios says. It may be that more consumers were done with their shopping by that time, but Nakios believes economic fears over the deadlock between lawmakers in Washington, D.C., unnerved consumers and the lack of a discount prompted the drop.
Peter Cobb, co-founder and executive vice president of bag retailer eBags.com also says sales fell off in early December after the strong spurt around Thanksgiving—which he calls Cyber Week—and were a bit softer than he expected, though he did not provide details. "People definitely shopped during Cyber Week but it tailed off after that and then picked up the last week as the procrastinators kicked into gear," Cobb says.
Online sales did pick back up again, with procrastinating shoppers spending $3.686 billion online in the five days from Dec. 17-21, compared with $2.412 billion during the same period in 2011—although part of the increase stemmed from the Free Shipping Day promotion that more than 1,000 e-retailers participated in moving to Monday, Dec. 17, from the previous week in 2011. Still, the heaviest online shopping days of the season all occurred before Dec. 15, comScore reports.
While early deals may have led more shoppers than usual to wrap up their shopping early, e-retailers also developed and promoted shipping strategies meant to convince late-season shoppers that they could still count on e-retailers to deliver in time for Christmas. Retailers that use eBay Inc.'s GSI Commerce for fulfillment, for example, were able to push their final shipping cutoff for Christmas Eve delivery to 11 p.m. Dec. 22, one hour later than in 2011 thanks to improvements GSI made to its operations during the year.
Saks Fifth Avenue, meanwhile, offered free shipping and guaranteed delivery before Christmas on orders placed before 4 p.m. on Dec. 22, complete with a free gift box and decorative bow. American Eagle Outfitters Inc. shipped all items for free through Dec. 20. Sears Holdings Corp. shipped items free until midnight on Dec. 20, and Macy's promised free shipping through Dec. 20 and delivery before Christmas on purchases of $99 or more.
"Shipping strategies have been trending in the same direction for the past few years—'free-er' and faster," says Dias of ShopRunner.
If there was one feature of the season that was not up and down, it was the growing tendency of consumers to shop with their smartphones and tablet computers. Many retailers reported strong growth in mobile sales and traffic this holiday season compared to 2011.
IBM Corp. says mobile devices accounted for 15.8% of e-commerce sales in December 2012, up from 11.0% in the same month a year earlier. 22.7% of consumers used a mobile device to reach a retail site, IBM says, with 8.8% coming from Apple iPads, much of it at night and on weekends. Shoppers on the iPad converted at a rate of 4.8%, compared to 3.0% for mobile shoppers overall, says IBM, based on data from 500 e-retailer clients.
Flash-sale retailer Rue La La says four of every 10 orders it received over the holidays came from a smartphone or tablet and that mobile sales accounted for 40% of holiday revenue. "Two seasons ago, mobile accounted for only about 5% of our sales," Steve Davis, president of Rue La La, says. "Our mobile growth has been astronomical."
The average order value stemming from smartphones was a little lower than orders coming from computers, Davis says, and the average order value from tablets a little higher. And many Rue La La customers used all three types of devices to complete their holiday shopping. Rue La La registered a 70.1% year-over-year increase in December in shoppers accessing the retailer from three screens and says three-screen customers are more than 500% more valuable than one-screen customers.
That's encouraging Rue La La to raise its investment in mobile this year, he says. "The success we experienced this holiday season and throughout all of 2012 has proven to us that this is an important channel for 2013. We will be expanding the team and aggressively testing and releasing enhancements to ensure we are delivering the ultimate shopping environment."