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The 2019 holiday shopping season has shown mixed results, with internet revenue rising significantly, but brick and mortar sales showing a slight or negative increase.

The entire holiday season – November 1 – December 31 – had a modest overall increase in total revenues. MasterCard SpendingPulse, which figures from Dec. 1 to Dec. 24, reported an overall U.S. increase in retail sales by 3.4 percent from 2018, with internet sales growing 18.8 percent.

MasterCard reported that e-commerce holiday sales account for 14.6 percent of total retail spend. Clothing was the most efficient ecommerce sales category, with online sales up 17 percent from last year, MasterCard reported. However, the overall increase in apparel sales was only 1 percent, which means that sales of bricks and mortar in this category were under-performed.

Numbers

Salesforce estimated total global annual sales at $ 723 billion.

The Adobe Analytics vacation report reported $ 142.5 billion in Internet spending in the U.S., representing a 13.1 percent year-over-year increase from November 1 to December 31.

Additional US Adobe data:

  • Average daily online revenue exceeded $ 2.3 billion for the holiday season, up from $ 2.1 billion in 2018, representing 13 percent year-over-year growth.
  • It exceeded $ 1 billion in online sales every day, except Christmas Eve at $ 850 million. Even on Christmas Day, online sales of $ 1.1 billion were reported, showing that gifts do not necessarily arrive on time and people may be able to buy on that day themselves. Sixty-seven percent of all visits and 48 percent of revenue came from smartphones on Christmas day.
  • Smartphones accounted for 58 percent of website traffic and 84 percent of e-commerce growth during the holiday season.
  • Smartphone purchases resulted in a record $ 50 billion in sales, up 14 percent from 2018.
  • Smartphone revenue accounted for 36 percent of total season sales.
  • Consumer electronics has the lowest share of smartphone revenue, at 18 percent.
  • In contrast, smartphones accounted for 45 percent of apparel and footwear sales and 46 percent of jewelry and cosmetics sales.
  • Big ecommerce vendors (more than $ 1 billion in annual revenue) have made this holiday better than small vendors (less than $ 50 million a year), with a 65 percent increase in sales over last year. Small retailers experienced a 35 percent increase.

Bopis

Adobe says BOPIS – the purchase of online retailers in the store – has grown 35 percent over last year, with consumers making the most of it during the seven days just before Christmas. Salesforce has calculated that merchants offering BOPIS are seeing 56 percent more active digital users over the last five days of the season.

Consultant firm Kurt Salmon Accenture Strategy found that average pickup processing time decreased 30 percent from 2018 to 2.5 hours. Eighty-eight percent of orders were processed on time, beating 72 percent in 2018.

Kurt Salmon managing director Steve Osburn said: “BOPUS is a real bright spot this year. Historically, it was a difficult transaction for the customer, with retailers now incorporating ease and convenience into the experience by setting up kiosks in front of the store and allocating parking spaces.”

More physical retailers are likely to join the BOPIS movement as it attracts shoppers, who would otherwise just buy online, to stores. A BOOK will become a key differentiator for brick and mortar success.

Bricks and mortar

The results for the brick-and-mortar retail were unpleasant. MasterCard SpendingPulse estimates department stores have experienced an overall 1.8 percent drop in sales, while their online sales have increased 6.9 percent. Here is the recording.

  • J. C. Penney’s comparable-store sales were down 7.5 percent year-over-year for the nine weeks ended January 4.
  • Kohl’s reported that between November and December, comparable store sales were down .2 percent from 2018.
  • L brand, which owns Victoria’s Secret and Bath and Body Works among other brands, said comparable-store sales fell 3 percent in the nine weeks ending Jan. 4.
  • Macy reported comparable-store sales were down 0.7 percent from 2018 during the January 4 holiday period.
  • Target registered a small increase, only 1.4 percent in physical stores and digital channels.

These results are likely to raise serious concerns for retail chains in 2020. Christmas sales often make up more than 50 percent of retailers’ annual sales. We will probably see announcements soon for a significant number of store closures. Macy’s has already announced the closure of 29 stores in 2020, while Pier 1 Imports will close 450 stores. Chico’s and Gap have announced they will close over 200 stores.

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