Mobile and international sales drove online business on Black Friday to a new record level.
This story first appeared in the December 1, 2014 issue of WWD. Subscribe Today.
E-commerce sales surpassed the $2 billion mark for the first time on Friday — far outpacing growth seen on Cyber Monday the past few years, according to data from Adobe Digital Index that tracked more than 350 million visits to 4,500 retail Web sites.
The day hit $2.4 billion in sales, a 25 percent increase from last year when sales reached $1.8 billion. On Thanksgiving, online sales hit $1.33 billion, slightly less than the predicted $1.35 billion. Adobe projects that Cyber Monday sales today will reach $2.6 billion.
Despite sales coming in at just under expectations for Thursday, the day ushered in a new online shopping trend. Instead of the peak in online shopping at around 6 p.m. that has been seen on Thanksgiving Day in the past few years, this year’s spike in transactions happened at 11 a.m., preempting the day’s main meal. Thanksgiving Day saw 27 percent of transactions coming from smartphones, nearly double the amount from last year. Thanksgiving was also the largest discount day, with sales reaching 25.5 percent, on average (up from 24 percent last year, the previous highest promotion day).
“There were so many promotions released that morning that folks felt they had to get stuff bought before it went out of stock. That changed the shopping pattern across the whole United States,” Tamara Gaffney, principal analyst at Adobe Digital Index, told WWD Saturday morning.
Online promotions were offered by retailers across the board, but were driven by Amazon, Wal-Mart Stores Inc. and Target Corp. as they battle for supremacy in e-tailing.
Target made select deals available online and in store Wednesday, and by 9 a.m. that morning, online sales already exceeded sales from the same day last year. According to the retailer, target.com had its biggest online sales day ever on Thursday, with sales up more than 40 percent year-over-year. About half of Target’s e-commerce traffic on Thanksgiving Day came from mobile. Last year’s hourly order volume record set on Cyber Monday was eclipsed on Friday morning, driven by a 10-percent-off gift-card promotion.
But for Gaffney, the key finding of the week actually had nothing to do with Thanksgiving or Black Friday. A peak selling day occurred on Nov. 11, even though it wasn’t discovered until Thanksgiving when the firm looked at all the data for the month of November.
There was a significant lift on Nov. 11, and the day set a new record at $1.29 billion. Nov. 11 is also the Chinese e-commerce holiday Singles’ Day, which this year saw $9 billion in sales. According to Gaffney, this means that Chinese retailers influenced American retailers to release promotions on that day, possibly the reason for online sales on Thanksgiving coming in a bit below predictions.
“It’s very surprising because this is U.S. retailers we’re tracking, not Chinese. It definitely explains to us or points that all retail across the globe has to start to align promotional activity,” Gaffney said, adding that Black Friday promotions were also seen across the U.K. “We didn’t see that coming. It’s not just one country influencing another, it’s all the countries influencing each other.”
At Gilt, sales activity from Thanksgiving and Black Friday promotions saw a significant lift outside the U.S., according to Michelle Peluso, the company’s chief executive officer.
In addition to Black Friday becoming a record sales day for the flash-sale site — it outpaced last year’s Black Friday by 20 percent — international revenue comprised north of 20 percent of total revenue for the day. Typically, global sales make up 12 to 13 percent of sales.
“Domestic grew nicely, but international was more significant,” Peluso said, with Korea and China representing the biggest global growth areas. Gilt launched sales at midnight Friday to cater to these international markets (those same sales launched at 9 a.m. in the U.S.). “It reflects a lot of what we’re doing to tailor the experience there [in Asia], like launching Alipay, Singles’ Day and using local forms of currency.”
A surprise was that high-price-point items like designer handbags performed particularly well in Korea and in China. Overall, the best-selling categories for women were handbags, cashmere sweaters and boots and for men it was sweaters, shoes and outerwear.
Cyber Monday is being touted as less of an event industry-wide due to the influx of online promotions that hit earlier and earlier each year. At Gilt, Black Friday last year edged out Cyber Monday’s sales, but a differentiated sales approach will hopefully set a record today for Gilt, Peluso said.
The executive detailed the strategy employed by the retailer to rack up e-commerce purchases, which, unlike Friday — extremely price-point and category-focused — will be called the “gold standard.” Today is more about promoting bigger brands like Missoni or John Varvatos and “raising the bar for the most covetable gifts,” Peluso said.
Mobile sales also continued to climb at Gilt. Last year, mobile made up about 40 percent of sales for Black Friday, while this year it was closer to 45 percent.
The Custora E-commerce Pulse, which tracked more than 100 million online shoppers, 100 U.S. retailers and more than $40 billion in e-commerce revenue, said mobile shopping grew to almost one-third of all online purchases this Black Friday. In 2013, just 22.5 percent of sales were placed on smartphones and tablets, with that number rising to 30.3 percent this year. Data also showed that e-mail marketing drove the most online sales for the day, fueling 27.3 percent of sales. Social media, including Facebook, Twitter, Instagram and Pinterest, drove only 1.7 percent of sales.
At PayPal, mobile is still the story of the online holiday shopping season, said Pablo Rodriguez, PayPal global head of consumer initiatives. He declined to break out what percentage of PayPal’s transactions came from mobile during the four-day shopping period, but noted that through Black Friday, PayPal saw a 62 percent increase in global mobile payment volume and a 51 percent increase in global consumers shopping year-over-year. On Thanksgiving, there was a 47 percent jump in global mobile payment volume and 51 percent growth in global consumers shopping on PayPal through a mobile device.
The most mobile cities, or the places where the highest rate of purchases were made on PayPal with a mobile device on Black Friday, were Chicago, Houston and Los Angeles.
For both days, fashion was the top category, driving nearly twice as much mobile payment volume as electronics, the distant second category.
The same did not hold true for eBay, where electronics was the most shopped category, followed by fashion and collectibles. During Thursday and the early portion of Friday, an iPad Air 2 was sold every second and Wii Black Deluxe Set with Super Mario 3D World & Nintendo Lane sold four units a second. A Microsoft Xbox was sold every two seconds and $100 iTunes gift cards sold at the same rate. The peak mobile shopping hour in the U.S. on eBay for Thanksgiving Day was 9 p.m., significantly later than the 11 a.m. peak time reported by Adobe.