Holiday retail sales in 2014—by many accounts a bump from 2013 from a roughly 3% to 4% growth—were pretty much in line with expectations. But some things were different about this shopping season.
While there are no doubt many idiosyncratic lessons to be learned by individual retailers, here are three overall takeaways from the busiest shopping time of the year.
The theater of holiday retail has fundamentally changed
Many retailers, perhaps spooked by low-key back-to-school turnout, the short holiday shopping season, or the overall so-called retail funk, began their holiday marketing and promotions as early as September. Then more retailers than ever opened on Thanksgiving Day and continued their specials past Cyber Monday. That all seems designed to undermine the "holiday sales extravaganza" singularity of “Black Friday” as an event.
It's something that has been building for years, but this year's numbers especially—from Black Friday/Cyber Monday to post-holiday sales—show that consumers are comfortable with these newly blurred lines and were content to leave their shopping until the last minute.
Indeed, says Brand Keys founder and president Robert Passikoff, Black Friday has become "more of a ritual than a reason to buy."
“This is due in part to the fact that retailers offer deals year-round and consumers have taken that to heart, and more stores are open on Thanksgiving Day,” Passikoff says. “With the expansion of Black Friday into an entire season (aka November) more people are shopping on—or prior to—Thanksgiving."
Online shopping habits are deepening
Surely e-commerce is the story of this holiday season. Several studies have already shown that online shopping started early and outpaced that of past years, all the way to Christmas Day.
While most web shopping still took place on computers in 2014, it also shaped up to be mobile’s retail debut in many ways. There was a palpable shift in the growth of m-commerce—including mobile search and payments. Paypal alone saw a 43% growth in mobile commerce this Thanksgiving over 2013.
There are also some signs that mobile could have been even bigger this holiday season, if mobile marketing, payments, and app and web performance had been more in line with consumers’ expectations.
Brick-and-mortar retailers—those that have honed their e-commerce sites and fulfillment systems, that is—are clearly making the effort to be part of this latest mobile-fed, e-commerce boom.
“Mobile continues to accelerate the secular shift from offline to online purchases, in our view, as consumer use-cases for last minute shopping, in-store purchases, and price comparison continue to expand,” said Robert W. Baird & Co. investment analyst Colin Sebastian to payments website pymnts.com.
Price pressures aren’t going away
The economy appears to be entering the new year with a vigor not seen since the recovery began. Add to that substantially lower gas prices, and it seems reasonable to predict that consumers might shake off that putative retail funk.
But happier-to-spend consumers aren’t necessarily any less price savvy or less inclined to seek out deals. In fact, while struggling consumers may feel compelled to cut spending, that hunt for a bargain is something of an emotional pursuit as well. Because of that, seeking out bargains isn't correlated clearly with income level or changes in finances, according to research by consulting firm Bain & Co. Some 75% of shoppers surveyed by Bain say they “get a thrill from finding the best deals during the holiday.”
Consumers, as we've noted, also seem to be quite patient—waiting well up until the holiday and even after to find what they want at the lowest possible price.
Mobile makes it all the more easy to compare prices and access to other perks like pick-up-in-store or other delivery options. Retailers that use data to experiment with dynamic pricing or that mark up prices in order to promote “discounts” may want to be sure that their customers are tolerant of such tactics; they could backfire by eroding consumer trust or sharpening consumers’ deal-hunting skills.