By Karen Phan
In an increasingly digitalized world, many retailers turn to the Internet to make shopping more convenient. There’s no doubt that sales peak during the holiday season, so how does online shopping compare to in-store shopping, and what do they mean for retailers?
Let’s take a step back and take a look at November. Forbes contributor Charles Taylor covered the 2019 Holiday Marketing Report by Criteo, global experts in digital marketing and advertising, which found that 60% of shopping is done in-store prior to Black Friday. In-store sales plummet to 30% and under on Black Friday and Cyber Monday.
“In the U.S., this very likely is a result of people associating Thanksgiving weekend with the beginning of the traditional shopping season. Surely, some consumers prefer to avoid crowded stores as well,” Taylor wrote. “Moreover, the heavy emphasis on online promotions, especially on Cyber Monday help kick a period where digital sales increase.”
We are now in the holiday shopping season. Online sales generally remain high after Cyber Monday and early-bird app promotions pop up in November, but in-store shopping increases as Christmas nears because packages may not arrive in time and shoppers want to avoid expedited shipping costs.
There are also 27 days between Thanksgiving and Christmas this year, making it the shortest possible holiday shopping season. The crunched shopping window explains why consumers feel rushed; the National Retail Federation found that 86% of shoppers began their holiday shopping during Thanksgiving weekend, a 77% increase from last year’s survey.W
The fluctuating trends between online and in-store shopping aren’t exclusive during the holiday season. For the most part, consumers rarely only shop online or in-store but commonly do both, and shopping is now more transactional than it is a leisure activity.
And that’s important for retailers.
E-commerce has matured from a fad to a necessary part of economic success, and this April, the Commerce Department released a report that shows online shopping outpaced traditional retail for the first time. To stay in the loop of a competitive market, retailers need to not only mobilize e-commerce but also adopt features, such as social media marketing and cryptocurrency payments, that set them apart from other businesses.
The growing presence of online retail won’t kill traditional retail, but instead, force physical stores to evolve. Accenture, a multinational marketing and advertising services company, found that consumers still prefer brick-and-mortar stores during the holiday season.
“While having a strong online proposition has become table-stakes, physical stores will still play an important role in the future,” Jill Standish, senior managing director and head of Accenture’s global retail practice, said in the Accenture report. “With consumers planning to do half of their holiday shopping in-store, retailers need to carefully plan their strategy for customer service, including labor, assortment and allocation of inventory.”
Amazon, the e-commerce giant, started off as an online bookstore and is the definition of retail success. Its mass of products, fast shipping and loyal Prime subscriber base of over 100 million all contribute to its dominating online presence. The company could’ve stopped there, but they’ve committed to brick-and-mortar retail and established their own brands and products—AmazonBasics and Alexa—in recent years. Just Walk Out, the technology that Amazon uses for in its Amazon Go grocery stores, is state of the art and one of a kind.
Although other major retailers and department stores such as Walmart and Macy’s were born and bred brick-and-mortar, it’s clear that they, along with retailers across the country, will have to appeal to changing consumer habits and both online and in-store shoppers in clever ways or end up having a weak presence in the sector.
