2012 Holiday Sales Clicked Online

Discussion
Jan 04, 2013

There were so many reasons (Hurricane Sandy, Newtown, concerns over the fiscal cliff, Midwest blizzards, etc.) for retail sales to disappoint this past Christmas season, but one takeaway seems clear — merchants with strong online businesses were more likely to come away feeling the holiday cheer.

According to comScore, e-commerce spending for the entire holiday season grew to $42.3 billion, a 14 percent increase over the same period in 2011.

Amazon.com reported that both its core business and third-party sellers on Amazon Marketplace enjoyed a record-setting holiday season. According to a company release, "unit growth solely from sellers in the U.S. increased more than 40 percent year-over-year."

Brick and click merchants saw overall numbers boosted by their online operations. Macy’s Inc., for example, achieved a same-store increase of 4.1 percent in December. The department store operator, which includes online in its same store comparison, achieved a 51.7 percent gain from Macys.com and a 40.4 percent jump from Bloomingdales.com during the month.

"We are pleased with the significant progress we made this holiday season in implementing our omni-channel initiatives through a period of high sales volume," said Terry Lundgren, chairman, president and chief executive officer of Macy’s, Inc., in a statement. "Our new process for satisfying store and online orders through both our online fulfillment centers and fulfillment stores led us to make better use of our inventories and drive sales that otherwise would have been lost when we ran out of stock locally in certain items."

What do you expect from retailers in 2013 who are looking to raise their game online? Will more merchants follow Macy’s lead and look to fulfill online orders from store locations as well as warehouse distribution centers?

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12 Comments on "2012 Holiday Sales Clicked Online"


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Dick Seesel
Guest
9 years 4 months ago

The day is past when retailers can view their e-commerce sales as cannibalizing their brick and mortar sales. “Omnichannel” is the right word, and Macy’s has the right point of view. The line will continue to blur as stores use their physical locations as fulfillment centers and as mini warehouses for same-day delivery.

Max Goldberg
Guest
9 years 4 months ago

Taking a retailer’s game online will not guarantee success. The transition from brick and mortar to online must be seamless. Accurate inventories must be maintained. Customer service must shine. It needs to be a no-brainer to navigate the site. Shipping and handling information must be upfront. Too many retailers do not realize that online is a different animal than brick and mortar.

Macy’s got it this holiday season. Amazon never lost it. Look for continued experimentation with online sales as brick and mortar retailers try to capture their share of online sales. Along the way, there will be more failures than successes.

Roger Saunders
Guest
9 years 4 months ago

Merchants will want to keep their eye on consumer behavior, on a monthly trendable basis, to be sure they understand how often customers are shopping online — not only with their “brick & click” site, but what those customers are doing away from their site. These insights should include category purchase plans, frequency, expenditure, and device used.

Online purchases will continue to grow on a year-over-year basis, to be sure. Eventually, the leading sites will be monitoring their share position of this growing pie. Best to get ahead of the curve in 2013.

Gene Detroyer
Guest
9 years 4 months ago

My wife said it several years ago when she had her first experience with the clothing end of Zappos…”why would I ever want to go to a store again?” Every brick & mortar retailer should put that quote in every office of the company.

If so, it will do three things:

  1. It will tip the business model to indicate how important online is. Retailers must invest in the future, not invest in today.
  2. It will emphasize that it makes no difference where the sale comes from. A sale is a sale no matter if it comes out of a warehouse or out of a store.
  3. It will make retailers think about reason for customers to go to the store, to other than buying something there and then.
Shep Hyken
Guest
9 years 4 months ago

Well known brands with a physical and online presence will reap the benefits of consumers who want to remain loyal to their favorite stores, but enjoy the convenience and option of online shopping.

Lee Kent
Guest
9 years 4 months ago

It all comes down to the money, right? Does the Macy’s model save money, hold margins, etc.? If that is proving to be true, then more retailers should be looking at this approach. Personally I think we’re still in the ‘playing with the model to get it right’ phase and of course that is a necessary step. Macy’s did it right this Holiday season and can afford to continue to tweak it. This may not be the case for all retailers so I suggest look at your data, look at your customer, and follow the money!

Tom Redd
Guest
9 years 4 months ago

The future of retail growth will be from customers using mobile, social networks and smart devices to shop and order online. This new connected customer wants convenience, predictability, and value. Online has come a long ways since the 1990s and the growth rates speak volume for where retail is heading. Online is not a bolt-on solution to growth, it’s a completely new way of looking at retail and the customer—no shortcuts.

Specific to the question: For retailers without an online presence today, they’ll have to not only invest in 2013 to get online, but to get the entire organization to see things through the eyes of their customers when they shop. Those already with an online presence will work to build hybrid selling and service models (store/online combos). As to online order fulfillment from stores, these will definitely pick up, but will take several iterations to get right.

Lee Peterson
Guest
9 years 4 months ago

I read an article by Jon Bird a while back that really hit the mark. He was asking, “what’s your ACDT strategy?” ACDT is ‘Amazon Can’t Do This’. Pretty good idea.

To me though, I’d phrase it a little simpler and ask, “Why do you have stores?” If it’s simply to sell goods, or to get a good price, or to do anything that Amazon can do, it’s not going to be enough in a very not-to-distant future.

So, ACDT and this is why you have to have stores:

– to experience product
– to touch / feel a brand
– to get great human service
– to see clear stories
– to hear great music
– to get a refreshment / snack
– to try something on
– to talk to other customers
– to feel satisfied the minute you buy something

On and on…what’s your list look like?

Kai Clarke
Guest
9 years 4 months ago

Online retailing is the format of the future. Anyone who denies this is ignoring the reality that online sales continue to produce as well as incredible growth year over year. How they fill their sales and where they fill them from is a logistical opportunity that is secondary to first becoming a prominent online retailer.

Ralph Jacobson
Guest
9 years 4 months ago

Any and all channels will continue to be leveraged by the innovators in both retail and CPG. Online, physical stores, virtual stores on subway walls in Korea, mobile, CPG Direct-to-Consumer, etc. are all critical.

Anne Bieler
Guest
Anne Bieler
9 years 4 months ago

Retailers who are going to grow will integrate their online store with the bricks and mortar site. For many retailers, they are parallel universes, if not separate business units.

As panelists have said, a sale is a sale for the company, so why not invest to make operations seamless? Whenever changes are made, they should be consumer centric, creating a better shopping experience.

Floor associates should know or be able to access quickly what is available online. Distribution needs to be efficient, not tied to separate units/centers/warehouses with incomplete inventory information. Transaction and “loyalty” information needs to be available in the moment, at the time of return, etc. Having associates and shoppers standing in line, waiting on hold, trying to “sort things out” should become a memory if retailers are going to keep pace.

Chandan Agarwala
Guest
Chandan Agarwala
9 years 4 months ago

The brick-and-mortar retailers should be wary of cannibalization of sales from existing physical stores to online stores. The business models in terms of price and cost of operations should be closely evaluated.

The cost of operations in brick-and-mortar stores includes expense for real estate in physical store; whereas for e-commerce it includes delivery and logistics. E-commerce is more competitive, as customers get more opportunity to compare prices. Whereas, physical proximity is a big factor in brick-and-mortar stores.

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