Yet again, the physical retail store is where it is at! With on average 95.5% of of all retail sales being attributes to in-store purchases, the importance of the store is firmly cemented (Note that this metric was created by only assessing only ShopLocal top tier clients). People are researching online, but NOT buying online. Bricks and mortars are here to stay.
In case the details are desired, here is the complete data set (in Excel 2007 – .xlsx format) for further analysis which was directly sourced from Internet Retailer and was the estimated eCommerce revenue per retailer for 2008. The chart below is directly taken from this analysis. Also note that there are still some big name retailers that do not yet have eCommerce enabled web sites such as:
- Canadian Tire
- Michael’s
- Pep Boys
- ShopKo
With the exception of the office supply retailers (OfficeMax, Office Depot & Staples), notice how relatively small of a factor these retailer's online web sites are in overall sales. The store is still where on average 95.5% of the transactions take place.
P.S. Thanks Loch for doing this interesting analysis.
Posted on 23 December 2008 by Loch Rose
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The number of retailer offers returned to normal seasonal levels in early December, but the latest updates show that was just a pause in the retailers’ promotional campaigns:
- The offer counts in the week of December 14-20 were unprecedented for mid-December, up 13% from 2007
- Then the offer counts dropped abruptly on December 21, just as the tardiest shoppers will be heading for the stores
What does this mean? The retailers kept the incentives strong for longer than usual this year, both because of the shorter Thanksgiving-to-Christmas shopping season compared both 2006 and 2007, and because shoppers are more price-conscious. Then, as normal, they cut back on the Sunday before Christmas Day, which this year fell relatively early, on December 21st. The outcome is that offer counts have dropped significantly and are already running at nearly post-Christmas levels, during the week when an unusually large number of procrastinating shoppers should be heading for the stores. In fact, as of December 19th, shoppers said that they had more than 35% of their shopping left to do. If shoppers follow through on their plans, retailers will have the opportunity to make up some ground in a tough holiday season, capturing shoppers’ last-minute purchases without needing to offer as many deals.
Looking a little deeper, it turns out that the major cut-backs in offers were made by Department Stores and Mass Merchants, with smaller drops in Food & Drug and in Consumer Electronics:
The drop in Department Stores and Mass Merchants is significant compared to 2006 and 2007:
Retailers are once again showing savvy merchandising as they head into the last days of the holiday season. If shoppers’ buying plans stay on track, the retailers could finish out the season as strongly as they began it on Black Friday, exceeding most analysts’ relatively modest expectations.
Posted on 11 December 2008 by Loch Rose
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We saw retailers pull out the stops on Black Friday, hitting new highs for the number of promotional offers they extended to their customers. Since then, they have continued to extend plenty of offers, but in numbers that are more typical of past years:
The chart above shows the trend in relation to Black Friday. Another way to view it is by the calendar, which also shows that the number of retailer offers in 2008 is generally in line with 2006 and 2007, though 2008 may be starting to pull ahead of 2007 as the month wears on:
Offer counts for the month of November reflect the strength of Black Friday, with November 2008 matching November 2007 even though Black Friday fell 6 days later in 2008:
So the year-over-year trend in offers for November was flat, with retailers picking up the pace a little after a slow October:
If recent trends continue, December 2008 could finish up with significantly higher offer counts than in December 2007, as retailers push hard to make the most of this year’s shorter period between Thanksgiving and Christmas, almost all of which falls into December. Still, retailers have to balance the number of offers they extend against shopper demand for those offers, and while shoppers spent more than expected on Black Friday itself, it remains to be seen how long their enthusiasm will last.
Posted on 28 November 2008 by Loch Rose
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Last week, we saw that retailers started to increase their offers to shoppers in November. That is to be expected, as is a peak surrounding Black Friday. The real question is just how far the retailers have decided to go. The answer turns out to be, farther than ever before.
Retailers are really pulling out the stops for Black Friday 2008, offering on average 21% more deals than in 2007:
Note the smaller-than-usual dip on the Sunday before Black Friday, and the stronger build through the following week. A closer look at the week leading up to Black Friday makes the gap even more obvious:
Some retailers are pushing much harder than others. Electronics, Office Supply, Department, Mass Merchandiser, and Specialty retailers are all presenting 50% or more offers than last year. Meanwhile, Food, Drug, and Home & Garden are staying on the sidelines, or even cutting back on their merchandising:
Black Friday this year greets shoppers with a record number of great offers, well merchandised and well communicated. Shoppers are certainly looking at the offers with interest, and we think that many will choose to take advantage of them. Black Friday is well positioned to be the high point as well as the official start of the holiday shopping season.
Posted on 22 November 2008 by Loch Rose
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In October, retailers cut back on their weekly circular offers, responding to reduced consumer demand as the economy slows. Since the start of November, though, the retailers have made it clear that they were just saving their resources until the holiday shopping season began: the chart below shows that the average offers per store in 2008 caught up to 2007 levels by late October, and has remained close to 2007 levels ever since.
Viewed as a count-down to Black Friday, the pattern is a little different, showing an increase for the week of November 9-15:
However, this one-time increase in 2008, which is not visible in the calendar-based chart, is evidently an artifact of the fact that Black Friday is a week later this year: the retailers made their offers during the week of November 9-15 based on the calendar, not based on a countdown to Black Friday.
The other striking pattern in the chart is in the number of active offers for the week leading up to Black Friday. In both 2006 and in 2007, there was a sudden drop starting on the Sunday before Black Friday. On Black Friday, the offers increased again, as retailers competed to bring shoppers into their stores, but the levels remain lower than during the previous week: the retailer are clearly focusing on the quality of offers on Black Friday, rather than on quantity.
So far in November, the retailers are extending as many offers to shoppers in 2008 as in 2007. Starting tomorrow (Sunday November 23rd), if 2006 and 2007 are any guide, the number of offers will drop, then increase on Black Friday, November 28th. The big question now is how shoppers will respond to them: how interested are they, and how many become buyers. With holidays store traffic predicted to drop 9.9% compared to 2007, and spending on holiday gifts by 11.3%, shoppers will be a demanding audience for retailers this year.
(4.50 out of 5)
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