Sales for the three big U.S. shopping days were flat or slightly lower from last year. It’s not surprising since retailers encouraged consumers to shop earlier due to expected product shortages and shipping delays. Buyers heeded the suggestion — a survey by the National Retail Federation revealed that 61% of U.S. consumers had purchased holiday gifts before Thanksgiving Day.
Adobe Digital Insights — which analyzes more than 1 trillion visits to U.S. retail websites, representing over 100 million items in 18 product categories — reported that American consumers spent $109.8 billion online from November 1 – 29, an increase of 11.9% over last year.
However, during what Adobe calls Cyber Week — Thanksgiving Day through Cyber Monday — U.S. online consumers spent just $33.9 billion, which is 1.4% less than last year. Shoppers shelled out an average of $301.27 for online purchases, below the $311.75 spent in 2020 and $361.90 in 2019, according to NRF.
According to Adobe, American consumers spent $5.1 billion online on Thanksgiving Day, the same as in 2020. Many large retail chains were closed, as they did last year, but urged customers to shop online instead. Popular online items were toys and video games. The average online discount on Thanksgiving Day was 27% in the U.S., a decrease of 7% percent from 2020, according to Salesforce. However the average order value increased 11%, even though 3% fewer items were purchased.
Adobe reported that Black Friday U.S. online sales came in at $8.9 billion, down 1.3% from the $9 billion spent in 2020. Some ecommerce sellers did see a boost. Globally, Shopify’s merchants registered $2.9 billion in sales worldwide on Black Friday, increasing 21% from 2020.
Smartphones accounted for 44.4% of all online sales on Black Friday, up 10.6% over last year, according to Adobe.
Software provider RetailNext reported that traffic at brick-and-mortar stores increased 61% over 2020. However in-store traffic was still 27% below pre-pandemic levels in 2019. Black Friday was the most popular day for physical-store shopping this year, with 66.5 million U.S. shoppers, according to NRF.
In-store apparel sales saw a big growth spurt, increasing 86.4% from last year when people mostly worked from home.
Adobe noted that American consumers spent a total of $10.7 billion online on Cyber Monday, which was down 1.4% or $100 million from last year. Nevertheless, it clocked in as the biggest online shopping day of the year thus far. Popular categories were:
- Gift cards,
- Video games.
According to Adobe, average discounts for electronics were 12% on Cyber Monday, compared with 27% last year. Apparel was marked down by 18%, compared with 20% in 2020. Appliances were discounted by about 8% this year versus 20% in 2020.
Smartphones accounted for 39.7% of online sales, up 8.4% over 2020, according to Adobe.
The use of BNPL services on Cyber Monday saw a large increase, with revenue up 21% over 2020 and orders up 1% year-over-year.
With Covid-19 still an issue, brick-and-mortar retailers abandoned “doorbuster” sales as they did in 2020 to avoid crowds gathering outside and rushing in when doors open.
Merchants began their holiday deals in October to spread out the season and prevent a crush on Black Friday and Cyber Monday, which can strain personnel and logistics. Consumers took advantage and shopped earlier than usual.
Cyber Week promotions this year often overlapped each other. The Black Friday offers in my email box were valid on Thanksgiving Day, and I was still receiving them on Saturday. My Cyber Monday discounts started on Sunday.
Discounts were not as generous as in past years, perhaps because retailers had to compensate for higher costs from supply chain issues. This will likely persist through Christmas Day.
Out of Stock Items
Out-of-stock goods during Cyber Week were common. According to Adobe, the highest categories were:
- Home and garden,
- Personal care products,
- Housekeeping supplies.
Throughout November, out-of-stock messages were up 169% vs. January 2020 and up 258% vs. November 2019. The situation will likely get worse in December.
It’s the busiest time for email marketing. Retailers are preparing and sending their holiday campaigns. Most use proven, tried-and-true email tactics.
In this post, I’ll review a few email marketing examples in this 2021 season from leading retailers.
Eddie Bauer is applying several proven email marketing practices. First is a “cart starter” to initiate the purchase process, beginning with the subject line: “Here’s $10 To Start Your Holiday Shopping!” It has a dual purpose of a $10 savings and a reminder to get started.
Consumers have endless choices for buying gifts. Deciding factors are typically price, convenience, availability, selection, and quality. Enticing shoppers to populate a cart facilitates abandoned cart reminders if necessary. And auto-loading a coupon code or gift offer can close sales.
Upping the email frequency is another proven practice. Thus far, Eddie Bauer has gone from sending a few weekly emails to daily to, most recently, twice a day.
An Adweek survey found that 99% of consumers check their email at least daily. Many check upwards of 20 times per day. A subscriber could easily miss, say, a morning email. But an afternoon message could catch her attention.
Increasing the frequency requires variations on subject lines, preheaders, and body copy. Do not resend the same or similar email more than once daily. Moreover, unique content improves deliverability. Similar (or exact) subject lines from the same sender can trip spam algorithms to block the deployment. Emails from Eddie Bauer have unique subject lines, body copy, offers.
Loft, the women’s clothing retailer, emphasizes its rewards program in holiday emails, another proven strategy. Rewards encourage loyalty and repeat purchases. The most effective programs allow flexibility as to when and where consumers access the rewards offers.
Shoppers in 2021 are mindful of inventory shortages and delivery delays. Costco and many other retailers have responded by launching early holiday promotions. Costco’s example email below features a variety of products as many shoppers are unsure what gift to buy.
Plus, a Deloitte survey found that 51% of consumers will purchase something for themselves while shopping for others. Bundled offers — such as buy one, get one free — encourage this behavior.
Direct physical mail can complement email promotions and drive online traffic. I’ve seen direct mail campaigns produce a 20% lift in conversions. Direct mail during the holidays can also reach procrastinating shoppers.
Shutterfly deploys direct mail to great effect, as shown in the image below of a physical postcard.
Challenged by a pandemic and an unstable economy, online and brick-and-mortar retailers scrambled to salvage the 2020 holiday shopping season. Most merchants started offering discounts much earlier than in previous years to accommodate the changed shopping dynamics.
Research firms defined the 2020 holiday season as the months of November and December (through Christmas Day). Early online discounts diminished the impact of the Cyber 5 — Thanksgiving Day through Cyber Monday — which, according to Adobe Analytics, saw an increase in online sales in the U.S. of 21 percent over 2019. This compares to a 32-percent online increase over 2019 for the entire U.S. 2020 holiday shopping season. Adobe examined more than 1 trillion visits to American-based ecommerce websites.
Almost all of the overall holiday revenue growth was attributable to ecommerce. In-store sales were sluggish and did not increase over 2019. Statista estimated the growth of U.S. retail sales — online and in-store — at 3.6 percent.
According to Adobe Analytics, online U.S. holiday-season revenue exceeded $188.2 billion, a 32-percent year-over-year growth. Every day, including December 24, exceeded $1 billion in revenue. November reached $100 billion in U.S. online sales, the first time a single month has reached that figure. The Cyber 5 days accounted for 18 percent, $34.4 billion, of the entire season, down from 20 percent in 2019.
Mastercard SpendingPulse data showed total U.S. retail sales — in-store and online — rose 2.4 percent between November 1 and Christmas Eve over the same period in 2019. Online sales grew 47.2 percent during that time according to Mastercard, much greater than Adobe’s estimate. The Mastercard report showed ecommerce accounted for 19.7 percent of total retail sales — up from approximately 13.4 percent in 2019.
Data from Salesforce showed an even bigger increase in digital spending — 50 percent — over 2019. Consumers spent $1.1 trillion online worldwide and $236 billion in the United States (much higher than Adobe’s estimates), compared to $723 billion worldwide and $165 billion in the U.S. in 2019, according to Salesforce. Sporting goods and home goods experienced the largest sales increases.
Salesforce also reported that U.S. retailers offering online purchasing and local pickup — in-store and curbside — saw digital revenue grow 49 percent on average year-over-year, while retailers that did not offer these options experienced 28 percent average digital growth. Buy now, pay later usage saw a year-over-year increase of 109 percent as retailers accommodated pandemic-concerned consumers.
Other Data Points
- Average online order values remained flat year-over-year, according to Adobe.
- Adobe data showed Christmas Day, typically the biggest mobile shopping day, saw 52 percent of total revenue coming from smartphones — the highest rate ever. In both November and December, 40 percent of revenue was generated from smartphones. Compared to 2019, $23 billion more revenue came from smartphones in 2020.
- Paid and organic search accounted for 45 percent of both visits and revenue during the 2020 holiday season, according to Adobe; paid search was slightly more effective in generating revenue.
- Mastercard SpendingPulse determined that home improvement and consumer electronics retailers saw strong growth whereas apparel and jewelry were slower. Home improvement was up a combined 14.1 percent online and in-store, with ecommerce sales up 79.7 percent.
- According to Mastercard, department stores saw an overall sales decline of 10.2 percent but their online sales grew by 3.3 percent.
- Other Mastercard findings included: (i) Affiliate and partner referrals resulted in six percent of online traffic and 14 percent of revenue; (ii) Free shipping was slightly less prevalent this year due to its increased cost; and (iii) As in past years, social networks did not generate much revenue — less than 5 percent of spending and 10 percent of visits.
The increase in online purchasing will likely create a huge uptick in returns. UPS expects holiday returns this January to exceed last year’s level by 23 percent. UPS expects about one-third of all holiday purchases will go back to merchants.
Narvar, which manages online returns for hundreds of brands, predicts that consumers are likely to return twice as many items as they did during the 2019 holiday period. Many large retailers have extended the return period to the end of January.
It costs retailers much in labor and resources to receive, warehouse, process, repackage, and restock items that consumers return. This year Amazon, Walmart, and Target decided in January to let some gift recipients keep the items they don’t want even though they still get a refund.
Initially, Walmart offered a free pickup service — Carrier Pickup by FedEx — for items purchased and shipped by Walmart.com. The expense of that option most likely caused the company to reconsider. Amazon is encouraging its marketplace sellers to implement the “returnless refund” policy as well, which could have a devastating effect on small merchants.
Holiday consumer spending offers insights into the retail industry, including ecommerce’s continued growth, consumer spending, and customer relationships.
2020 has been extraordinary — the pandemic, natural disasters, and a divisive U.S. election.
Despite this, U.S. retail spending is up. The National Retail Federation recently reported that total U.S. retail sales (excluding automobiles, gasoline sales, and restaurants) for the first 10 months of 2020 increased 6.4 percent from the same 2019 period. And that includes the stunningly poor retail sales in April 2020 when so many stores and businesses were closed.
This isn’t to say that everything is hunky-dory in the retail industry. Just ask Pier 1, Sur La Table, Motherhood Maternity, J.C. Penney, Neiman Marcus, or any of the other dozens of merchants that filed for bankruptcy during the year.
So what does it all mean? What follows are five insights from the 2020 Christmas season.
1. Ecommerce Is Booming
From early October through Christmas Eve, online retail spending rose an amazing 49.0 percent, according to Mastercard SpendingPulse.
“At the onset of the pandemic, overall retail sales were down. But there was a major shift occurring, and it was by far the largest move toward ecommerce that we have ever seen,” said Joe McCarthy, director of performance marketing for Klaviyo, an email and SMS marketing platform. “Essentially, in 2020 we saw multiple years of ecommerce growth.”
This trend toward ecommerce may continue. For example, Aisha Al-Muslim, a reporter for The Wall Street Journal, noted that several bankrupt brick-and-mortar retailers — such as Lord & Taylor, Stein Mart, and the aforementioned Pier 1 — have been acquired in the hope that they could still sell online.
2. Money Will Be Spent
Americans spent money despite the pandemic, the election, the fire season, and the weather.
Statista confirms the overall data trends of the NRF and Mastercard SpendingPulse, noting that American retail sales in October 2020 alone grew by 8.5 percent over the same 2019 period.
If they have money, shoppers tend to spend it. There is likely always an opportunity if a retailer can find it.
3. Keeping Customers Is Vital
Shopping habits changed in 2020. When physical stores closed in March and April, shoppers had to find alternative channels and brands.
“Many people [shopped with an online retailer for the first time] out of need,” said Klaviyo’s McCarthy. “They couldn’t find a product from a traditional brand that they had purchased from, so they discovered new options.”
If a business acquired new customers, particularly during the Covid Christmas season, its continued success might depend on how well it retains those shoppers. Put another way, businesses that acquired customers because of the pandemic will need to find ways to keep shoppers loyal long term when it ends.
4. Not Everyone Can Win
Despite the increase in sales, not every retail ecommerce merchant can or will make money. The future could be treacherous.
Total year-over-year apparel sales (physical and online), for example, plummeted 19.1 percent from October 11 to December 24, 2020, compared to the prior year, according to Mastercard SpendingPulse. Clearly, apparel retailers were losing. But furniture and furnishings sales leaped 16.2 percent overall and 31 percent online for that same period compared to 2019.
5. Local Suppliers
Before the pandemic, sourcing foreign-made products made economic sense for many brands and retailers. But when those long supply chains failed, having a local option made a significant difference for many companies.
“The coronavirus pandemic snarled the world’s sprawling supply chains for months, shutting factories, disrupting shipping and making it difficult for companies to get products from factories to consumers,” wrote Mike Cherney in The Wall Street Journal.
“Now, many companies are considering changing the model to avoid future product shortages and transportation delays, even if it might increase costs. Some are looking at moving production closer to home. Others are considering spreading small factories around the world instead of putting all their manufacturing in one place.”
For many retailers, January sales feel like a slump after the high-flying holiday season. But stores can still take steps to earn relatively more.
Here are five tactics to try.
Boosting January Sales
Feature buy now, pay later. In November, the National Retail Federation estimated that 2020 U.S. holiday spending would be up between 3.6 percent and 5.2 percent compared to 2019. That amounts to estimated retail sales of between $755 and $766 billion.
Thus consumers will have just spent a ton of money in November and December and could be short on cash in January. Buy now, pay later — from PayPal, Klarna, Affirm, more — could help shoppers acquire the items they need.
Consider email promotions in January that feature the BNPL option, including recommended products based on a recipient’s segments or shopping behavior.
Promote self-giving. Another January offer could encourage gift-givers to buy something for themselves.
The campaign could begin with identifying customers who gave the most in November and December, such as those who spent $500 or more.
In January, the business could email each of these customers, praising them for their holiday generosity and offering a $50 gift card to use toward a purchase of $150 or more. The card would expire on January 31, but they could give themselves a nice gift at an attractive price before then.
The campaign can be effective for a few reasons. First, sending this offer via email would be inexpensive. Next, the retailer doesn’t have to pay the discount ($50 in this example) unless a purchase is made. And finally, this sort of offer encourages purchases greater than the $150 minimum.
Try live streaming. The holidays are an excellent time to grow an email list. Most ecommerce retailers should strive for an email opt-in with every sale. Brick-and-mortar sellers should aim for this too, perhaps offering cashiers a bonus to obtain an email address (think 25 cents each) at the physical point of sale.
All of those addresses create strong promotional opportunities in January. For example, consider hosting a live streaming event that features overstock items and even product returns at deep discounts.
The retailer would use its email list to promote the live stream, creating a QVC-like environment.
Add clearance channels. Unless it’s wine, your inventory is not likely getting better with age. Packaging fades, dust creeps in, and manufacturers roll out new models.
Thus, it can make sense to get rid of older items (or returns) in January via Amazon, eBay, or similar channels. The aim is to generate as much profit as possible while freeing up cash and warehouse space.
Don’t give these products away. Experiment with various prices to find those that move the inventory quickly and still make a profit.
Keep marketing. Retailers sometimes cut expenses when sales fall, for good reasons. Spending a lot of money in a relatively small sales market is not wise.
However, there is a difference between right-sizing a marketing budget and eliminating it.
In January, look for ways to keep marketing to customers and prospects. Affordable options include email marketing, content marketing, and off-season advertising.
A Slow Month
Retail sales in January, if not the entire first quarter, will be lower than in November and December. But your business can still take steps to generate sales and profit.
The challenges of this unique holiday shopping season have made omnichannel commerce a necessity. With several states closing non-essential brick-and-mortar stores and others severely limiting the number of shoppers allowed inside, consumers embraced online shopping with gusto during Cyber Week — Thanksgiving Day to Cyber Monday — with a big surge in mobile ordering.
Cyber Week Results
According to Salesforce, which collects data from over 1 billion global shoppers across more than 40 countries using its Commerce Cloud platform, digital sales grew substantially. Total digital sales for Cyber Week reached $270 billion globally and $60 billion in the U.S. Overall, ecommerce revenue in the U.S. was up 36 percent globally and 29 percent year-over-year. The number of online customers increased by 22 percent compared to 2019.
Globally, compared to last year, Thanksgiving Day experienced a 20-percent uptick in online sales, while Black Friday digital sales grew 23 percent. Cyber Monday digital sales in the United States shot up by 10 percent compared to 2019, according, again, to Salesforce.
Salesforce also reported that retailers with curbside, drive-through, and in-store pickup saw 32 percent higher online sales growth than retailers without those options during Cyber Week.
On Thanksgiving Day, when many physical retailers, including Walmart and Target, were closed, in-store U.S. traffic fell 94.9 percent year-over-year according to Sensormatic Solutions, a software and consulting firm that serves the retail industry.
Online U.S. sales on Thanksgiving Day rose 21.5 percent year-over-year to $5.1 billion, hitting a new record, according to Adobe Analytics data. The firm had originally projected $6 billion in sales. Adobe data is based on an analysis of 1 trillion annual visits to American retail sites, 100 million SKUs, and 80 of the country’s 100 largest retailers. Forty-six percent of the online purchases were made on a smartphone, according to Adobe.
Shopify, the ecommerce platform, reported that Thanksgiving Day’s peak sales-per-minute from global shoppers were about $919,000, an increase of roughly 34 percent compared with last year.
According to Salesforce data, global sales on Thanksgiving Day reached $62.2 billion, a growth of 30 percent over last year.
This year U.S. consumers skipped the pre-dawn line-up outside brick-and-mortar stores. Foot traffic was generally light owing to store closures, but it increased modestly in the afternoon and evening. Reduced inventories resulted in smaller in-store discounts, and many popular items such as game consoles either sold out early or were not available, most notably at Best Buy and Target, according to Coresight Research. Sensormatic Solutions estimated in-store store traffic to have declined by 52 percent from 2019.
American consumers spent $9 billion online on Black Friday, up 21.6 percent year over year, according to data from Adobe Analytics, which had originally predicted sales of $10.3 billion. Salesforce estimated global sales of $62.2 billion, 30 percent more than last year.
The peak sale hour on Shopify for the entire Cyber Week holiday occurred from 12:00 p.m. to 1 p.m. on Black Friday, with revenue of over $102 million.
On Black Friday, Adobe found spending on smartphones in the U.S. jumped 25.3 percent year-over-year to reach $3.6 billion, representing 40 percent of total online spending.
Hot items on Black Friday included Hot Wheels, Lego sets, Apple Air Pods, Apple Watches, Amazon Echo devices, and Samsung TVs, according to Adobe.
Retailers that offered curbside pickup had a 31 percent higher conversion rate of traffic to their sites — a reflection of how popular it’s become for people to buy online and retrieve purchases without stepping into stores. Adobe Analytics reports the number of orders fulfilled using curbside pickup has already grown more than 100 percent growth year-over-year for 2020 through the holiday week.
Based on Adobe Analytics data, American consumers spent a record $10.8 billion online on Cyber Monday, an increase of 15 percent over 2019. This made it the biggest online shopping day ever in the United States. However, revenue fell short of Adobe’s original forecast of $12.7 billion. In-store retail foot traffic declined by 23 percent from 2019.
Consumers wanting to take advantage of online deals drove nighttime shopping. Between 10 p.m. and 2 a.m. Eastern Time, U.S. consumers spent $2.7 billion. These last four hours accounted for 25 percent of the day’s revenue, with the peak hour from 11 p.m. to 12 a.m., according to Adobe. Consumers scooped up discounted computers, sporting goods, toys, electronics, and appliances.
Mobile accounted for 37 percent of Cyber Monday sales, according to Adobe.
While it does not provide sales by day, Amazon reported that its third-party sellers exceeded $4.8 billion in worldwide sales from Black Friday through Cyber Monday, an increase of more than 60 percent compared to last year.
Ecommerce should see significant spikes this holiday season. However, merchants must consider the need for speedy, no-hassle checkout processes to lower abandons, especially from shoppers on mobile devices.
What follows are six tweaks to streamline an ecommerce checkout.
6 Tweaks to Streamline the Checkout Process
Address payment error messages. According to Paysafe, an electronic payments provider, about 10 percent of initial credit and debit card transactions fail. The most common reasons are:
- Wrong card number,
- Too many charges or attempts in a short time,
- Limit reached on the card.
What occurs after a decline determines if the consumer finalizes the purchase. By default, most shopping carts display a simple “decline” message. But that’s neither clear enough nor encouraging for the shopper to try again.
While decline codes may not indicate the actual issue, a positive message can ease concerns, such as:
Oops, there’s a problem with your card number. Please re-enter your number, expiration date, and security code.
However, this doesn’t provide motivation to continue should the card decline again. That’s where offering an alternative payment method comes into play. Since many consumers have preferred payment methods, it’s ideal to offer at least two non-credit card options, such as PayPal and Apple Pay.
Thus, a better message could state:
Oops, there’s a problem with your card number. Please re-enter your number, expiration date, and security code. Alternatively, you can pay via PayPal or Apple Pay.
Baymard Institute, a research firm, says 2 to 5 percent of would-be customers receive a decline message. By modifying the alert, it was able to capture about 30 percent of those orders.
Ease the surprise of address verification fails. Pop-up messages from real-time address verification can be alarming. By explaining the reason for wanting the shopper to accept the suggested address, you can eliminate confusion.
We want to make sure your order reaches you. According to the USPS, this is your properly formatted address. Please confirm.
This verbiage changes the message from an alert to a helpful tip. It can also assist shoppers to identify typos that could route packages to the wrong destination.
Append delivery days to shipping methods. Customers want to know when they can expect delivery. By displaying transit times, you help them choose the best method and decrease order status requests. When disclosing “arrives in X days,” take into consideration processing time. Most shoppers consider the countdown to start once they place the order.
Eliminate all unnecessary fields. The trick to decreasing cart abandonment during checkout is to remove all distractions, including collecting info that’s unnecessary for payment or fulfillment. For example, most shoppers would prefer not to provide a phone number or details about how they found the store. Beyond unnecessary info, make as many fields optional as possible.
Define every error. Red asterisks can be hard to catch. Rather than displaying a top of page error, display messages next to or beneath each problematic field. This combats two common issues:
- The top-of-page error may not appear on the screen, or the error that displays further down the page may be missed.
- What’s wrong isn’t always apparent. Shoppers get frustrated if an entry appears correct and there’s no defined issue.
Include a discrete link to edit the cart. While you don’t want to promote leaving the checkout, making it easy for shoppers to edit the cart can save a sale. A simple link within the cart contents section will suffice.