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In its most recent analysis of global online consumer transactions, DynamicAction’s Retail Index revealed robust markdowns and promotions on key holidays as well as insights into consumer shopping behavior — such as the expectations of free shipping.

The report also revealed that mobile devices are driving more sales and boosting profits.

The retail index is an analysis of more than $8 billion in global online transactions. The latest report covered the first of the year through Memorial Day and included home goods, apparel and general merchandise.

Sarah Engel, chief marketing officer at DynamicAction, said the index showed that free shipping is the “new normal.”

“Orders using free shipping were up 6 percent thus far in 2018 [over 2017], with free shipping offers the new customer expectation during holiday-focused sales and promotions,” Engel said in the report. “Holiday 2017 free-shipping offers extended into January 2018, with an average 15 percent increase in free shipping in the first two weeks of January. Free shipping during Memorial Day shopping was also up an average 20 percent in North America.”

Engel noted that retailers had decreased marketing expenditures by 45 percent in January versus the prior year. “By late April, that trend turned around, with the month of May showing an average 27 percent increase in marketing cost versus May 2017, and the Memorial Day shopping period showing a 38 percent increase in marketing cost,” Engel said. “Retailers still have a 22 percent decrease on average for the year thus far in marketing costs versus 2017.”

The researchers at the firm also found that price-point markdowns and promotional offerings were up year-over-year during key holidays. “North American shoppers, however, have come to equate holidays with sales, and retailers are answering this call with promotions and price markdowns,” Engel said. “Although promotions on average were down 5 percent year-to-date and markdowns were up 7 percent year-to-date — a near balance — key holidays showed more promotional and markdown activity than in 2017.”

DynamicAction found that on Presidents’ Day, promotions and markdowns were up 16 and 23 percent, respectively, while Easter Week promotions rose 16 percent year-over-year and markdowns up 11 percent. For Memorial Day, promotions showed a 9 percent gain while markdowns were up 8 percent.

Regarding mobile, Engel said devices are pushing sales and profits up. “Although web traffic (desktop, laptop) continues to drive more revenue than other devices, there has been a significant increase in revenue driven from mobile in 2018,” Engel said. “Revenue driven from mobile devices was up 20 percent year-to-date 2018 versus 2017, with revenue driven from web traffic down 13 percent during the same time period and revenue driven from tablet purchases down 11 percent.”

With returns, retailers seem to be getting better control on the issue. Engel said after a mammoth gain of 34 percent in the value of returns last year, “North American retailers are focused on addressing core issues in size, fit, quality and customer expectations to hold steady on returns in 2018.”

The report found that returns were up 3 percent year-to-date versus the same period last year, “with some core weeks of returns, like the first week of January, actually down an average 12 percent,” Engel added.

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