IBM Digital Benchmark Analytics and ComScore provide the most reliable industry information for online holiday sales. Here are some of the insights from Black Friday and Cyber Monday.
1. Black Friday and Cyber Monday 2013 – Mobile is Key
Black Friday 2013 will be remembered more for the surge in mobile shopping rather than online GMV growth. IBM reported +19.7% growth on Thanksgiving Day and +19% growth on Black Friday overall.
The notion that Thanksgiving Day grew faster than Black Friday was confirmed by ComScore data for desktop GMV. According to ComScore, desktop online GMV grew by +21% on Thanksgiving Day, verses the modest +15% growth on Black Friday.
With mobile reported by IBM to be 25.8% of online GMV (this data not available from ComScore) it is probable that the +15% growth on Black Friday should be higher as we’re seeing a channel shift.
ComScore noted that “many consumers prefer to avoid the crowds and lines typically associated with Black Friday by shopping from the comfort of their own homes … also recent trend of kick-starting holiday shopping by opening stores on Thanksgiving Day seems to be having a spillover effect on the online channel.”
What should be added to this statement is that many retailers have traditionally spent most of the online marketing budgets (i.e. promotions and discounts) on Black Friday and Cyber Monday, knowing that Thanksgiving Day (in dollar value a much lower ranking day) could be a great source of growth.
Cyber Monday, as reported by IBM at 9am EST on December 3rd, was +20.6% vs LY. The day will likely come in as one of the best days in history for most online retailers. Joel Anderson, CEO of Walmart.com, says that “there’s no way … that it won’t finish as our biggest Cyber Monday ever”.
Overall, the most notable fact about Black Friday 2013 is the data that shows mobile now represents over a quarter of the sales this holiday.
2. Black Friday Winners: Macy’s (Department Stores), Victoria’s Secret (Apparel Brands)
Black Friday winners are the apparel brands and department stores this year, driven by a surge in consumers shopping the category. IBM data suggests a +50.4% online GMV growth for the apparel category alone.
Department stores are growing online sales at +61.4%, however the growth is partly coming from an increase in AOV.
ComScore validates the strong apparel performance on Black Friday, stating that the apparel category grabbed a 28% share of online spending in the month of November, almost doubling their baseline from January-October.
3. Home Goods Retailers and the Rise of AOVs and Ticket
Home goods retailers are not seeing the same growth rates as apparel and department stores. IBM data suggests a growth rate only at +17% vs LY. As the AOV is +15%, this suggests that almost 100% of the growth is coming from a higher ticket or more item in checkout, which is a very different scenario compared to the apparel retailers (who have seen a growth in traffic, number of shoppers, or orders).
Home Depot’s earnings report from November 19th 2013 might offer some explanation; “Home Depot Transactions for tickets under $50, representing approximately 20% of our U.S. sales, were up 3.1% for the third quarter. Transactions for tickets over $900, also representing approximately 20% of our U.S. sales, were up 10.3% in the third quarter.”
According to Home Depot and Lowe’s, people have started to invest in large appliances and engage in large projects for their homes as the economy is slowly improving. The IBM numbers we’re seeing for Home Goods is likely coming from an assortment mix effect, where the growth is driven by larger ticket items.
Carol Tome, CFO of Home Depot says: “For us anyway, we think home price appreciation has been the biggest contributor of our sales growth this year. If you look at the Case-Shiller data, it shows that home prices are up 10% year-on-year and if you look at the Composite Index maybe up closer to 13%, but still 25% lower than their peak. So we think that there’s a lot of room for recovery and it’s not going to (stall out) in the short-term.”
It should be noted though that Home Depot posted +50% growth online in the past quarter.