Author(s): Raghu Gopal
The frenzied sales event known as Black Friday has become the unofficial start of the Christmas shopping season in the US. Shoppers rush to stores to find perceived bargains, sometimes lining up for hours or even overnight to grab a deal. The day traditionally begins the Friday after Thanksgiving Day, but in recent years it has crept into Thanksgiving Day itself, as many stores open their doors hours ahead of time in hopes of increasing their profit.
Black Friday sales have also spread online, with e-commerce becoming a vital element. This year, the event saw sales on the Internet reportedly hit $6.2 billion, with shopping through mobile devices apparently accounting for $2.2 billion.
But the big online shopping day in the US now appears to be Cyber Monday, an occasion invented to be the digital equivalent of Black Friday. It has been a fantastic success and has extended to countries around the globe.
This year's Cyber Monday seems poised to be the most successful ever, with an estimated total of $7.9 billion in online sales. Overall, Americans spent close to $24.2 billion online over the five-day period beginning on Thanksgiving Day and ending on Cyber Monday, according to Adobe Analytics. However, we note that these numbers pale in comparison with Alibaba's Global Shopping Festival earlier in November, when the Chinese e-commerce giant raked in almost $31 billion in sales (see Alibaba's Annual Tradition Continues).
Bricks-and-mortar stores such as Macy's and Target, have picked up on the growing importance of mobile-based shopping and have made big improvements to their shopping apps. And as footfall in physical locations continues to dwindle, some retailers are exploring how they can use their apps to lure shoppers back to stores, where sales are typically more profitable. Walmart, for example, added store maps to its app prior to the holidays, letting customers pinpoint exactly where an item is and plot out their trips before they arrive.
Physical and digital shopping are no longer mutually exclusive. The lines have blurred between the two and retailers have been finding ways to benefit from combining the best of both worlds. While e-commerce companies are expanding their physical presence, for example, Amazon is joining forces with Kohl's to process returns, traditional retailers like Walmart and Macy's are investing more on e-commerce and using their store fleets to support services such as in-store collection.
We believe that retailers must cater to the growing number of customers making purchases from mobile devices, and who are playing an increasingly important role in the overall US retail sector. In previous years, mobile shopping has been hampered by bad checkout experiences, poor navigation and small screens. All this is changing as retailers make efforts to ensure the buying journey on mobile devices is smoother than ever and we expect the trend to continue.