Cyber-Weekend: E-Commerce Grew But Local/Offline Still 20X As Big

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The shopping stats are flying fast and furiously. The narrative emerging from this past shopping weekend is that stores suffered traffic and sales declines while online sales and mobile commerce grew.

That’s only partly accurate. Certainly mobile shopping growth is one of the most important stories this year. Smartphones and tablets drove roughly 50% of traffic to websites over the weekend and nearly 30% of sales (27% to 29% was the range). And the availability of online discounts throughout the weekend probably drove more people to shop online and avoid the mall mayhem. (That’s what I did.)

Yet the traditional “e-tailer vs. retailer” discussion is superficial and obscures what’s really happening “on the ground.” Indeed, the digital and offline worlds are not in opposition; they’re deeply interdependent or symbiotic.

Rather than choosing to shop online (including mobile) and avoid the store, consumers move fluidly between “digital platforms” and stores. Yet it’s important to point out that they’re still shopping known brands and retailers, whether in-store or online.

There’s a ton of data from various sources about Black Friday sales and shopping; however there’s very little that analyzes where those sales happened (other than in-store vs. online). My guess would be that the majority of weekend and Cyber Monday sales are happening through known retail brands and a few trusted online pure-plays such as Amazon.

The majority of long-tail and no-name e-tailers are probably not doing so well.

According to the National Retail Federation weekend spending was expected come in around $50.9 billion (vs. $57.4 billion last year). This includes online sales. By comparison, comScore reported that Thanksgiving and Black Friday online sales reached just over $2.5 billion, which is up significantly from last year.

Comparing the NRF and comScore numbers shows (crudely) that about 5% of the shopping total for the weekend is e-commerce. In Q3 e-commerce represented about 6.6% of US retail according to the US Census Department. We may see that number inch up in Q4 to nearly 7%.

But even though fewer people may have turned out this year for Black Friday sales in stores, in-store sales we’re still about 20X e-commerce sales. These numbers are still unrefined but directionally you get the idea.

E-commerce depends heavily on stores and consumers’ ability to see, touch and return products. Traditional retailers haven’t yet caught up to their “omnichannel” rhetoric but they’re starting to. US consumers, including Millennials, are generally much more interested in buying from a merchant with a real-world presence than a pure-play e-tailer. They’re more comfortable buying online with the notion that they can return something to the store. Again there are a few online-only exceptions such as Amazon.

To the extent that e-commerce saw meaningful gains and grew vs. offline sales it’s probably because most online shoppers had confidence that there were familiar brands and stores behind those online sales.

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