InternetRetailing rounds up the latest news, insights and trends on how retailers and customers are responding to peak trading this year. In recent years pre-Christmas shopping has been at its highest over the Cyber Weekend of Black Friday to Cyber Monday, but the shape of this year’s shopping could well be different thanks to rolling lockdowns and social distancing brough about by the COVID-19 pandemic. Here is the latest news on peak…
ONLINE BLACK FRIDAY SALES STRONG… NOW COMES THE DELIVERY TEST, WARNS IMRG
Online retail sales growth on Black Friday was strong this year, coming in at +38%, with the full Black Friday week (defined as an eight-day period, Mon 23 – Mon 30 November) seeing growth of +30%. That figure is based on the daily online sales performance of 102 UK retailers.
The weekly figure was below IMRG’s original forecast of +35-45%, but it still represents massive growth on what was already huge volumes across that week. It is likely that the national lockdown in England pulled sales volumes forward to a degree, with the first three weeks of November all securing growth rates in the +56-61% range.
Andy Mulcahy, Strategy and Insight Director, IMRG comments: “Generally speaking, the patterns of demand we’ve seen across the whole year were maintained during the Black Friday peak, with home & garden the strongest category. In fact, the home & garden participant with the lowest online sales growth across the full eight-day week still secured a higher rate of growth than any other participant from any other category.”
But is the real challenge about to start as retailers strive to deliver all those Black Friday bargain? IMRG’s Mulcahy certainly thinks so.
“With all that additional traffic to sites, we might have expected them to buckle under the strain a bit more but actually they seemed to hold up quite well. Now the operational focus is very much on delivery – the carriers have had to deal with huge volumes for most of the year, but the week following the Black Friday weekend is when it reaches a peak,” he says. “Things seem to be holding up OK at the moment; if they get through the next few weeks without significant disruption to customer deliveries it will be a testament to their planning and execution.”
SMALLER ONLINE BUSINESSES GROW 150% OVER BLACK FRIDAY, FACEBOOK LOSES OUT TO GOOGLE
Small online businesses turning over less than £38,0000 a month, saw a 150% surge in business on Black Friday, according to analysis of more than 20,000 companies on ecommerce investment company Clearbanc’s platform. Companies with turnovers above this topped out at 20%.
Clearbanc’s vendors saw revenues grow by 52% from March to April when lockdowns went into effect (that’s 88% higher than April of 2019), with the top product categories on Clearbanc’s platform tell a very 2020 story: Medical Equipment & Supplies (+252.53% ), Hobbies & Collectibles (+212%), and cannabis-related goods (+105%).
The data also shows that Facebook’s spend YTD is down 8.94% compared to 2019, which seems small considering the economy is struggling, while Google spend 2020 YTD is up 53.25% compared to 2019.
“It’s been a tough year for everyone, but e-commerce has been a standout of 2020 where the revenues of companies on Clearbanc’s platform grew 55% on average and small businesses saw a 150% spike in business over Black Friday alone,” said Clearbanc President and Co-Founder, Michele Romanow. “We’ll go back to a more normal life soon, but consumer behaviour has changed forever and we’ll look back on the COVID pandemic as a pivotal moment for the retail industry and a life changing year for founders riding the e-commerce wave.”
PEAK SHOPPERS SPEND 52% MORE ON HOME & GARDEN WITH 50% OF ORDERS FROM MOBILE
Black Friday online retail sales globally went up 14% this year compared to 2019, with the Home & Garden sector enjoying a 52% sales uplift as people continue to want to spend more on their homes in the pandemic – with 50% of orders now coming from mobiles.
According to new research from Nosto, Food & Beverages and Health & Beauty verticals also performed well, seeing sales increase by 45% and 22% respectively, however Fashion & Accessories saw a decline of 4% the data suggests.
Globally there was a 50: 50 split of orders coming from desktops and mobile phones, with stay-at-home shoppers spending 20% more time on retail sites they visited and viewing 24% more pages. Interestingly, retailers in the data sample were displaying 30% more product recommendations this year to help holiday shoppers find products and offers most relevant to them.
Despite people going out less because of restrictions and concerns over the virus, retailers saw 64% of traffic coming from mobiles phones (35% from desktops) and an equal 50% v 50% split for orders coming from each. However, shoppers on desktops generated 53% of sales compared with 47% from phones, suggesting that bigger orders are likely to come on desktops. Shoppers are still less likely to make a purchase on their phones, with conversion rates averaging 5% on desktops and 2% on phones.
Overall, across all verticals analysed in the study, the numbers indicate that traffic to online retailers went up 21%, with sales up 14% and average order value (AOV) down -2% on the back of retailers’ seasonal offers and discounts.
“It’s clear that the restrictions on going out during the pandemic have influenced holiday shopping demand with the Home & Garden and Food & Beverages sectors enjoying the most success this year as people focus on shopping to make the most out of their time shut away inside their homes,” says Jake Chatt, Nosto’s Head of Brand Marketing. “Health & Beauty has also performed well with earlier research indicating that 44% of consumers have purchased more beauty and skincare products online this year than in physical stores.”
BLACK FRIDAY SAVED UK SHOPPERS AN AVERAGE £92 ON PURCHASES
Half (49%) of UK shoppers purchased items during this year’s Black Friday shopping event, with those who took advantage of Black Friday deals saving an average of £92 on purchases. Research by PayPal owned bargain hunting browser extension Honey also uncovered, some of the savviest shoppers (37%) saved between £100 and £500 on their Black Friday purchases.
While some items were clearly discounted online, many shoppers went one step further this year to ensure they got the best deals. 43% of those who bought Black Friday items also used a browser extension, like Honey, or an online shopping tool to apply more discount when checking out.
The research also finds that men appeared to be better at finding and basketing a bargain online. Men saved on average a third (35%) more than women, £112.20 compared to £72.50, respectively.
The most popular items bought online this year; clothes and accessories (33%), electronics (27%) and health, beauty and personal care items (26%) were in favour over sports and outdoor equipment (12%) and pet accessories (11.4%).
DELIVERY AND FRAUD ANXIETY GROW
Peak is giving an insight into what bugs consumers the most about online retail, and stats from GBG’s recent Consumer Christmas Report - Christmas Unwrapped suggests that delivery issues and fraud are top of the list.
In what GBG dubs the first ’digital Christmas’, its data shows that more than 8 in 10 shoppers (81%) are concerned about late deliveries spoiling their plans – rising to 88% for Londoners. ‘Availability anxiety’ has also been driving consumers to buy sooner rather than later and is a key consideration for 43% of people in choosing gifts.
Fraud has also become an issue for both retailers and consumers as online shopping surges in the retail ‘Golden Quarter’. GBG data shows that 49% – less than half – of UK retailers feel prepared to fight off fraud during the Golden Quarter. Fewer still (45%) say their third-party partners are likely fully prepared.
It has found that there were 18,243 fraud attempts, on average, made against each UK retailer during last year’s Golden Quarter – predicted to reach 20,000 this year, costing businesses £38,000 each. Credit card fraud (11% say ‘quite unprepared’) and card-not-present fraud (10%) are the threats most worrying retailers ahead of this year’s GQ; in comparison, they feel most prepared for refund fraud (95% said quite or fully prepared).
88% of retailers are ramping up spend on new technologies to fend off fraudsters: machine learning is seen as a silver bullet by most, with 41% of retailers investing in it to fend off fraud during the Golden Quarter, followed by geolocation and address capture/verification (37%).
Fraud is also a concern for consumers. GBG estimates that 24 million UK shoppers fell victim to eCommerce fraud, during last year’s Golden Quarter. Young shoppers are most at risk of fraud, with 85% of those aged 55+ understanding the risks of credit card or identity fraud, this plummets to around half for credit card fraud (53%) and identity fraud (51%) among 16-24 year olds.