Retailers in the US were probably delighted to summarize sales figures during the 2019 holiday season. According to Mastercard SpendingPulse, holiday retail sales increased 3.4 percent (excluding the automobile sector) with online sales growing 18.8 percent compared to 2018. This is up from the 18.4 percent growth rate in the previous year. The report investigated sales November 1 through December 24.
The dominance of e-commerce sales
The holiday shopping season is an essential period for retailers. It can account for up to 40% of annual sales. However, in 2019, Thanksgiving, which normally initiates the U.S. holiday shopping season, was on November 28, a week later than last year’s November 22. Retailers, therefore, had six fewer days to drive sales between Thanksgiving and Christmas.
It is worth noting that e-commerce dominated the shopping event, making up 14.6 percent of total retail. “E-commerce sales hit a record high this year with more people doing their holiday shopping online,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. He added, retailers swiftly proffered omnichannel sales to their customers as Thanksgiving holiday arrived later than usual. This provision fulfilled customers’ demand for transactions on all channels and devices.
While online sales grew significantly, brick-and-mortar revenues showed only minor growth or even an abatement. Thus, things became worse for retailers who placed reliance on only physical sales.
The Mastercard SpendingPulse report also details holiday shopping from November 1 through December 24. Key findings of the report demonstrate that this was a triumphant holiday shopping season for retailers, and e-commerce especially.
As stated in the report, Specialty Apparel witnessed a remarkable increase in e-commerce sales. In fact, it rose up 17 percent compared to 2018, while total retail sales of the segment posted 1 percent growth annually.
The Jewellery sector saw 1.8 percent growth in total retail sales, with non-store sales rising by 8.8 percent. It had been supported by e-commerce strength before the holiday season, so sales figures of the sector remained high through to its finish.
Department stores saw an overall sales decline of 1.8 percent. However, online sales grew 6.9 percent, which emphasizes the importance of omnichannel offerings.
Electronics and appliances grew 4.6 percent, with e-commerce share’s growth of 10.7 percent. In the meanwhile, the household furniture and furnishings category was up 1.3 percent.
Additionally, US online shoppers planned to spend more dollars on Cyber Monday rather than Black Friday. In fact, 15.4 percent of overall retail purchases took place on Black Friday, whereas Cyber Monday’s share was 24.5 percent.
Omnichannel retailing is the trend
Mastercard’s post-Christmas report does support the essentiality of omnichannel offerings. In the context of online sales predominating total retail sales, retailers strived to balance between non-store and store-based sales. Furthermore, to avoid the impact of the shorter holiday shopping festival, they soon arranged for the event by providing promotions and hiring a sufficient number of sales staff.
A representative retailer with outstanding success was Amazon, who is succeeding in their omnichannel approach. The retailer stated that Cyber Monday was once again the single biggest shopping day in the company’s history, based on the number of items put on sales across the world. Customers worldwide set a record of shopping for five days from Thanksgiving to Cyber Monday. However, Amazon did not publish detailed data.
There are two components that Amazon’s omnichannel strategy focuses on.
First, Amazon focuses on the customer experience. They utilize statistics to create a personalized and reactive interaction through every channel.
Their second focus is integrating channels in the backend. It includes linking customer data and accomplishing customer’s demand via any channel that they opt for.
It is not only Amazon who gained tremendous profit but mobile sales were also successful. According to Bloomreach, mobile transactions witnessed an increase of 17 percent while mobile visits rose by 16 percent as compared to the previous year.
The National Retail Federation and Prosper Insights & Analytics, in the meantime, reported that around 189.6 million shoppers went to physical stores and visited websites over the full five-day Thanksgiving weekend. This was an increase of 14 percent over last year’s 165.8 million.
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