Sales data spewing in Tuesday from tech firms, retailers and research outfits further fueled optimism the holiday season will be a happy one.
Adobe reported that a record $6.59 billion was spent online on Cyber Monday, an increase of 16.8 percent, or nearly $1 billion, from last year’s $5.6 billion.
Adobe also reported that mobile had its first $2 billion day on Cyber Monday. Smartphones became “the de facto device” for mobile shopping, accounting for 37.6 percent of retail visits and 21.3 percent of revenues, while tablets are still used more for entertainment and gaming, accounting for 8.2 percent of retail visits and 9.1 percent of revenues. Adobe measures 80 percent of online transactions at the largest 100 U.S. web retailers, representing $7.50 of every $10 spent by consumers online.
The National Retail Federation estimated that from Thanksgiving Day through Cyber Monday, more than 174 million Americans shopped in stores and online, beating the 164 million estimated earlier in the year.
Average spending per person over the five-day period was $335.47, with $250.78 of that amount (75 percent) spent on gifts. The biggest spenders were older Millennials (25 to 34 years old) at $419.52, according to a survey by the NRF and Prosper Research and Analytics.
Amazon said the stretch from Thanksgiving through Cyber Monday proved to be the best for selling devices. The Echo Dot (the smaller, cheaper, younger sibling to the Amazon Echo voice-enabled smart speaker) was Amazon’s top seller. It remains on sale for $30, instead of $50. Amazon’s Fire TV Stick was another hot item.
Underscoring the briskness of business, eBay said an Apple MacBook Air sold every five seconds on Cyber Monday, and thousands of Xbox One S units moved each day since Thanksgiving because of a $170 deal.
Shopify merchants, numbering more than 500,000, raked in a combined gross merchandise volume of $1 billion. At its peak this weekend, the e-commerce platform handled more than $1 million in transactions and 7,000 orders per minute. The platform’s top category by sales volume was apparel, at 1.4 million units, followed by accessories and housewares, at 917,000 and 531,000 units, respectively.
Salesforce said artificial intelligence drove more purchases than during non-holiday times. According to the software company, which makes AI and machine-learning tools for commerce, 5 percent of shoppers that engaged with AI-powered recommendations accounted for 24 percent of revenue on Cyber Monday. The tech firm’s data shows retailers dug a little deeper on Monday by cutting prices and giving up some margin to trigger revenue growth. The day’s average order value was smaller in comparison to Black Friday by roughly $10, the company said. Discounts and free shipping rose slightly.
On Tuesday, the major indices — Dow Jones Industrial Average, S&P 500 and Nasdaq — all rose and most retail stocks saw gains. Shares of Lands’ End rose 3.2 percent to close at $12.85; Abercrombie & Fitch Co., up 3.1 percent to $17.00; J.C. Penney Co. Inc., up 3.1 percent to $3.45; Guess Inc., up 2.9 percent to $15.52; Ulta Beauty, up 2.7 percent to $212.28, and Bon-Ton Stores Inc. saw a 3.1 percent gain to 42 cents. Amazon Inc. shares were up 0.4 percent to $1,200.40, and Macy’s Inc. rose 1.6 percent to $21.54.
There were a few exceptions, notably J. Jill, down 0.3 percent to $5.66, and the two major discounters, Wal-Mart Stores Inc., down 0.04 percent to $96.58, and Target Corp., down 0.2 percent to $55.75.
While so far so good, retailers say it’s too soon to declare victory. They know from experience that what occurs during the Black Friday period doesn’t necessarily correlate with how the holiday season performs overall. There’s a positive trend now, but politics, forces of nature, and unforeseen events such as an act of terrorism could disrupt the pattern.
Also, there’s always a lull after Cyber Monday, though this year many stores and brands are extending Cyber Monday deals, in effect creating a “Cyber Week” that could lessen the lull and ease any anxiety until business revs up again around mid-December.
“While Thanksgiving week and Black Friday proved to be more important this year, it’s clear the holiday season is just getting warmed up,” Marshal Cohen, chief industry analyst for The NPD Group, wrote in a report. “Through the week ending the Sunday after Thanksgiving, 52 percent of shoppers hadn’t started their holiday shopping yet, which is ahead of 2016 results for the same week, and in line with 2015 results. As expected, holiday 2017 is shaping up to be less like last year, and more like two years ago, meaning last-minute procrastination will be less of a factor this year.”
Generally, retail gains in the 3 to 4 percent range are expected for holiday 2017, which would make the season the best since 2014.
Cyber Monday’s record was not particularly surprising since online records continue to be set as consumers increasingly shop via mobile devices and retailers spend more on technology to make it easier.
“All the fundamentals were in place for consumers to take advantage of incredible deals and promotions retailers had to offer,” said NRF president and chief executive officer Matthew Shay. “From good weather across the country to low unemployment and strong consumer confidence the climate was right, literally and figuratively, for consumers to tackle their holiday shopping lists online and in stores.”
Tracking social media, 4C Insights, a data science and marketing technology firm, said Macy’s was the most engaged retailer from last Wednesday through Cyber Monday for the second year in a row, beating out Amazon. Macy’s had 560,687 engagements versus 159,091 for Amazon. Target had 109,548 engagements and Tiffany had 56,853. 4C measures key trends and performance metrics across Facebook, Instagram, LinkedIn, Pinterest, Twitter and Snapchat from its clients.
Spring, the online marketplace with many brands, said Black Friday ended up being its highest sales day. Top-selling brands included Bobbi Brown, Adidas, Fresh, La Mer and Michael Kors.
Business was even good at struggling Bon-Ton, which said Tuesday that comparable store sales for the four weeks ended Nov. 25 increased 3.1 percent, with total sales increasing 1.9 percent to $280.6 million, compared with $275.3 million in the prior year period. “We are very pleased with our November sales results and our strong start to the holiday season,” said Bill Tracy, Bon-Ton’s president and ceo, citing new merchandising and marketing initiatives as helping get the results.
Baird’s retail analyst Mark R. Altschwager, citing data from Prodco Analytics, noted that retail traffic on Thanksgiving Day was up 3.9 percent, down 0.6 percent on Black Friday and down 1.9 percent on Black Saturday. Further, apparel traffic underperformed for the first time in seven weeks, with North American traffic for apparel retailers down 1.9 percent for the week ended Nov. 25. According to the analyst, the data indicates the first time apparel traffic lagged the industry since the first week of October, suggesting that some purchases were made before the Thanksgiving week.
In the survey conducted by the NRF and Prosper Insights & Analytics, during the five days from Thanksgiving to Cyber Monday, over 58 million shopped online only; over 51 million shopped in stores only, and 65 million shopped both channels. The multichannel shopper spent $82 more on average than the online-only shopper, and $49 more than the in-store shopper.
Among other observations from the NRF/Prosper research:
- The most popular day for in-store shopping was Black Friday, cited by 77 million consumers, followed by Small Business Saturday with 55 million consumers.
- The top two days that consumers shopped online were Cyber Monday with more than 81 million and Black Friday with more than 66 million.
- 63 percent of smartphone owners used their mobile devices to make holiday decisions, and 29 percent used their phones to make actual purchases.
- Top shopping destinations were department stores (43 percent), online retailers (42 percent), electronic stores (32 percent), clothing and accessories stores and discount stores (31 percent).
- The most popular gifts purchased were clothing or accessories (58 percent), toys (38 percent), books and other media (31 percent), electronics (30 percent) and gift cards (23 percent).
The survey, conducted Nov. 25 and 26, asked 3,242 consumers about their Thanksgiving weekend and Cyber Monday shopping plans and has a margin of error of plus or minus 1.7 percent.
“Retailers are acutely aware of how consumers behave,” said Shay. “The big story is about mobile shopping…54 percent of retailers say mobile is their top priority for 2017. Retailers are making the investments they need to make.…Things are setting up very well for a strong finish to the year,” with four full weekends left and an extra shopping day compared to a year ago. “This is a great start,” Shay added, noting that 91 percent of America’s consumers still have holiday shopping left to do.
Joseph Feldman, analyst at Telsey Advisory Group, said some retailers, most notably Wal-Mart, improved their mobile apps for easier ordering and also expanded their product selection online since most digital traffic was coming from mobile. “We believe Target continues to have issues with site stability on high traffic days, evidenced by the site being slow to respond on Cyber Monday,” he said.
“The past Cyber Monday behavior of shopping on your work computer during the day is almost completely reversed,” said Taylor Schreiner, director of Adobe Digital Insights. “This year, mobile shopping was dominant both in the morning and afternoon, and desktop only staged a comeback in the evening when people were home. Smartphones have become the de facto device for mobile shopping, while tablets continue to be more used as entertainment and gaming devices. Consumers take smartphones everywhere including work and have a broad range of screen size options that make mobile shopping convenient and easy. With home virtual assistants and entertainment streaming devices selling fast this holiday season, it looks like home will continue to be at the center of peoples’ digital lives.”
Commerce marketing firm Criteo offered additional takeaways in its “Cyber Monday 2017” report based on data from such retailers as Walmart, Target, Best Buy, Toy’s ‘R’ Us, Kohl’s, Costco, Kmart, Wayfair and Macy’s. According to the report, Cyber Monday and Black Friday results reflect how omnichannel strategies are helping to revitalize U.S. retail.
Criteo said the number of people window-browsing or researching products grew 4.8 percent from last Friday to Monday, while actual purchasers grew 13.4 percent. The difference indicates that many consumers had already done their “pre-shopping” preparation and were ready to buy when Black Friday and Cyber Monday deals launched.