Black Friday's Takeaways

Taken from cellum blog 's article

Ten takeaways from Black Friday’s cyber humiliation

For years people have been making dark jokes about “Black Friday,” the day in late November when retailers in the US – and an increasing number of countries around the world – mark the start of the holiday shopping season with huge discounts. This year, however, the annual bonanza and its frenzied crowds was threatened with irrelevance, as deal-hungry shoppers for the first time spent more online than in bricks-and-mortar stores on Thanksgiving Day and Black Friday.

Final data for the five-day discount “window” – which stretches to “Cyber Monday” – are still emerging, and retailers still reacting to the news. But for the time being there are plenty of lessons from the frenzy:

1. The shift to online is accelerating faster than widely anticipated. With actual sales at physical stores coming in below most estimates and online sales topping forecasts – including $1.75 billion in the US on Thanksgiving Day alone, up 25% on 2014 – much of the retail industry appeared to be in shock by the speed with which consumers are “trading bricks for clicks.” This suggests that other projections about the migration to online retailing will need to be reassessed.

2. The shift isn’t just happening in the US. Payment Eye has a nice collection of images showing what it dubbed the “ghost towns” of major UK retailers on Black Friday, which suffered an almost 10% drop in footfall over the weekend – compared to a 12% rise in online transactions.

3. Mobile is taking a bigger share. An even bigger surprise to some retailers and analysts is the ballooning percentage of online transactions involving mobile devices, which made up roughly one-third of all such purchases (including 22% for smartphones), and nearly half of all traffic. Overall, the percentage of online sales completed using mobile devices was up more than a quarter over last year, according to IBM Watson Trend, which tracks retail e-commerce. More stunning was the experience of some individual retailers, including big-box giant Walmart, which said that 70% of the traffic to walmart.com on Cyber Monday came from mobile devices, and that a full 50% of all online orders the company had received over the holiday were from mobile, double the figure from last year.

4. But desktops retain certain benefits. Despite the jump in the percentage of consumers initiating and completing transactions on smartphones and tablets, a survey by the National Retail Federation found that eight out of 10 still planned to use a PC. In many cases holiday shoppers used a desktop to complete purchases initially researched on mobile devices. Meanwhile, according to IBM, purchases made on desktops tended to be almost 25% larger, with an average order value of $128 on desktops compared to $102 on smartphones. Meanwhile, data show that of the stunning $670 million Apple users spent online on Black Friday, iPads accounted for almost half ($302 million).

5. iOS continues to dominate. Another interesting data point of the weekend was the disproportionately large amount of money spent by consumers using Apple’s products. According to Adobe, a full $575 of the $799 million in mobile transactions made on Cyber Monday in the US came from iOS devices, compared to just $219 million from Android as an operating system.

6. Social media is playing an increasingly important role. While some big retailers may consider their forays into social media to be a mixed bag, there is no way to deny the role that social is playing in forming consumers’ opinions about brands and offerings. According to one survey, social media “buzz” around the Black Friday sales grew by 25% over last year, with Amazon alone enjoying almost 500,000 mentions, potentially each of which could have resulted in a sale.

7. Retailers weren’t properly prepared. Perhaps the most stark indication that the shift to online over the Black Friday weekend was a surprise is the multiple reports of online retailers failing to keep up with demand. In the US, numerous large retailers suffered outages and slow checkouts, including Target, Walmart and Victoria’s Secret. Meanwhile, according to a survey by Adobe, out-of-stock rates on retailers’ websites hit an all time high of 13%, or twice the normal rate.

8. But retailers are getting better at online. Despite the traffic overloads and other glitches, this year again showed how even many “bricks first” retailers are becoming more innovative. One notable example is Target, which for the second Black Friday in a row offered free shipping, and used the occasion to showcase a partnership with the app Curbside, which allows customers to play orders online and pick them up at a Target store without leaving their cars. The inventiveness of firms like Target may be one reason that, according to Adobe, large retailers enjoyed year-on-year online gains twice those of smaller ones (roughly 12% to 6%). Such figures also suggest that smaller online retailers may suffer as consumers migrate to mobile and favor apps over web-mobile shopping experiences.

9. These sale days are nearing their “use by” date. Despite the spread of Black Friday and Cyber Monday to markets beyond the US, both will likely suffer decreasing relevance as one sale bleeds into the next and online sales continue to eclipse those in bricks-and-mortar stores. Adobe notes that even among social mentions of Cyber Monday this year, only 56% were positive (For its part, Black Friday suffered a dismal 40% positive rate among social mentions.

10. The remote mobile payments space is more vital than ever. While the perfection and mass adoption of solutions for “proximity” mobile payments such as Apple Pay should remain a key objective for retailers and consumers, the accelerating shift to online underscores the equal importance of remote payments, including those developed by Cellum. People are becoming more willing to make remote purchases, and we need to make sure they also have the option to make remote payments, so that they can finish the whole shopping process from the comfort of their homes.”