The early winner of the holiday season may be e-commerce.
Cyber Monday sales came in at a record-setting $3 billion while, for the first time ever, more shoppers turned to their digital devices than physical stores to shop on Black Friday. These findings underscores the trend that many have been observing for years — as Internet access spreads and mobile phones proliferate, e-commerce will only continue to grow.
While e-commerce is still only a 7% of overall retail sales, this holiday season showed that online commerce is a flourishing market, one reluctant retailers can finally fully embrace, or ignore, most likely to their detriment. With these record-setting numbers of Cyber Monday, retailers will now be closely eyeing e-commerce as the holiday season progresses, curious to see if this rush to online will continue during the last days of 2015 shopping.
Following the Cyber Monday retail holiday, RetailWire, an online retail discussion forum, asked its BrainTrust panel of retail experts the following questions:
- Does the increase in shoppers going online to purchase products since Thanksgiving suggest an even bigger future for e-commerce than previously predicted?
- Will the rest of the holiday season revert to traditional patterns with a greater number of consumers shopping in stores than online?
Here are six of the most interesting perspectives from that discussion. Comments have been edited by Retail Dive for content and length.
The tipping point
We are at the proverbial "tipping point" — consumers have already made shopping online the new normal as part of their shopping journey. Amazon has become the first place consumers go to look for product information.
No, online will not suddenly replace stores this year. Yet Amazon is poised to pass Walmart in holiday sales this year or next.
Several surveys indicate that consumers plan to spend 40 percent of holiday dollars online. If that prediction is anywhere close to being accurate, online will definitely continue to grow, and Target had better work out the issues causing website crashes.
The bottom line is that retail metrics are outdated and just plain wrong. It's not about how much a retailer sells online versus in stores, it is now about how a retailer can grow total sales (profitably) across all channels.
Can’t stop, won’t stop
The future for e-commerce looks bright, as more and more consumers have access to high-speed Internet connections and are coming to realize that it's easier to buy online. I expect that online sales for this holiday season will exceed all previous years. There will be glitches, like Target, but that won't stop the online juggernaut.
Look at the Boomers
The biggest delta versus expectations for me is the speed and enthusiasm the Boomers and older have shown in adopting online tools of all sorts. One of the biggest chuckles for me is when pundits and researchers bemoan the loss of market share for Facebook among teens and younger. What they totally miss is the increased adoption of Facebook by the generations with the money. Give me more Boomers (and more Facebook stock) any day.
Still a lot of growth to be had
For the trailing five years, e-commerce has been growing at around 15 percent year-over-year. And each year, big analyst firms predict slowly tapering growth.
At fewer than 10 percent of all retail sales, e-commerce has a lot of runway. Expanding assortments, improving convenience, intensifying price competition and a generation of digital natives are all accelerants.
The convenience factor
All you have to do is look at the trend over the years, and if the trend continues, we will see bigger e-commerce transactions. Simple: It's just more convenient. And when companies like Amazon have two hour delivery (in select cities), well, it doesn't get much more convenient than that.
Big expectations for next year
No surprise to me. E-commerce is still rising on the bell curve. Adoption increases for many reasons including better e-tail practices and more tech savvy/oriented (younger) shoppers across the buying landscape. Barring some shock to the economy, I expect next year to outdo 2015.