The Deathwatch Begins For Cyber Monday

Forbes, DEC 16, 2016 – Retail has been undergoing a transformation, driven by the consumer adoption of technology as part of their shopping process: They go online, they shop from their phones, they generally disrupt the retail ecosystem through a declining interest in stores and a growing interest in the convenience and speed of e-commerce. The trend has grown to the point where the U.S. Department of Commerce estimates that 7.7% of all retail sales (excluding restaurants, gas and automotive) are online sales.

However, during the months of November and December, all that changes. The National Retail Federation (NRF) predicts that in 2016 online sales will reach $117 billion in the U.S. during the months of November and December, a year-over-year growth rate of “7-10%” (I’m not sure why they can’t be more precise here). That total is 17.8% of the $655.8 billion that U.S. consumers will spend combined in November and December, which itself is predicted to grow by 3.6%. The NRF additionally predicts that 56.5% of shoppers plan to shop online during the season, up 6.8% from 2015.

What we’re seeing in terms of actual traffic (note this is not sales), is something more significant than 7% increases. According to Verizon’s Holiday Retail Index report, most periods within the holiday season are averaging 10-15% growth in traffic year-over-year:

The only day that is not wildly above the projected growth is Cyber Monday. This dip is interesting all by itself, and probably predicts the ultimate decline and demise of Cyber Monday as a shopping “holiday”. Consumers used to go out and shop Black Friday weekend in person, and then go to work on Monday and finish their shopping based on what they could find online – delivered through the high speed internet of their employers, rather than their low-speed bandwidth at home.

Consumers no longer need to wait until Monday to get deals, and that is driven home by the surge in online traffic on the Sunday before Cyber Monday, when early birds were inspired to look for deals far enough in advance that Cyber Monday itself actually saw a fall in traffic year over year. Sure, the day still broke sales records, but with traffic down when all the surrounding days were up, the signs for the future health of Cyber Monday are not good.

As consumer online behavior becomes more entrenched, Cyber Monday will ultimately become irrelevant – an anachronism from the early days of online shopping.

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Retail sales rise thanks to Black Friday boost in November

The Guardian, Thursday 15 December – Bumper sales on Black Friday and Cyber Monday helped the retail sector to maintain strong growth in November and bolstered hopes of a busy Christmas on the high street.

Department stores and electrical goods sellers were the biggest beneficiaries as consumers sought out deals on the latest TVs and phones. The Office for National Statistics said sales increased by 0.5% excluding fuel in November from October and by 5.9% on the same month last year.

The only blot on the generally upbeat picture was fuel sales after a spike in pump prices put an end to 18 months of low driving costs. To emphasise the squeeze on drivers, the ONS said fuel prices increased at the fastest rate since 2011 to push sales to their lowest level of annual growth for two years.

Some analysts said the rising cost of imports, including fuel, would combine with low wage growth to take the steam out of sales. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “A substantial correction is coming. Next year will be very different.”

Inflation jumped to 1.2% in November as the 15% fall in sterling since June forced firms to begin nudging prices higher.

Tombs said: “The squeeze on real incomes from higher inflation and slower employment growth will push the rate of growth of retail sales down sharply. For now, though, consumers’ spending continues to drive economic growth.”

Chris Williamson said it was understandable that retailers would feel buoyant after they enjoyed the strongest three-month spell of growth for almost two years in the third quarter, but figures for October and November showed “cracks may be appearing in the willingness of consumers to keep spending in the face of rising prices and wider financial worries”.

“The concern is that we may be starting to see signs that rising inflation, weak pay growth and job insecurity among households are all starting to subdue consumer spending,” he said.

“Financial worries rose especially sharply among households where the main earner is employed in the private sector, with government workers perhaps feeling more secure in their jobs due to recent suggestions that government spending may soon start to rise as austerity is reined back. Private sector employees’ view on their future finances fell to the lowest for three years in October, boding ill for retail sales at the start of the fourth quarter.”

Holiday Shoppers Didn’t Jump into Spending, November Retail Sales Show

CIO Today Network, December 15, 2016 – Consumers gave retailers only a modest boost in November, showing a reluctance to spend lavishly at the start of the holiday shopping season.

Last month, retail sales climbed to $465.5 billion, up 0.1% from October and up 3.8% from November 2015, the Commerce Department said Wednesday. Some forecasts had predicted a rise of at least 0.3%.

In addition, October retail sales were revised down to 0.6% from a previous estimate of 0.8%. Retail sales in November can be a crucial barometer of consumer sentiment and retail performance for the overall season — a make-or-break period when retailers can sometimes rake in 40% of their annual sales. The results may signal a slight slowdown among shoppers after several months of strong gains.

Other recent reports have given more upbeat forecasts of the economy in the fourth quarter. The Labor Department recently reported that 178,000 net jobs were added in November, while the unemployment rate fell three-tenths of a percentage point to 4.6% — the lowest since 2007. These positive economic signs mean the Federal Reserve is likely to announce Wednesday that it is raising interest rates.

November’s growth was dragged down by a 0.5% decline for auto and other motor vehicle dealers. If that category is stripped out, overall retail sales grew 0.2%. In all, 10 out of 13 categories reported growth. Sales at electronics and appliance stores, always a popular category during Black Friday sales, grew 0.1%. Furniture store sales were up 0.7%.

Department stores, which have been struggling as shoppers increasingly turn online and to specialty boutiques, reported a 0.2% drop.

 

Black Friday helps ecommerce to a record November – spurred by heavy online discounting

InternetRetailing, December 20, 2016

Shoppers’ move to shop online this Black Friday helped to push November ecommerce spending up by 22.9% in November, according to IMRG figures. But the latest IMRG Capgemini eRetail Sales Index shows just how far retailers cut their prices, with the average basket of electrical goods falling to £119. That’s 22.7% less than at the same time last year – and 18.5% less than in October 2016. Average basket values also fell, year-on-year, in footwear, gifts, menswear and womenswear.

Justin Opie, managing director, at IMRG, said: “Black Friday has become cemented in the retail calendar, but it continues to challenge retailers on profitability. Its image has become heavily linked to discounting and many feel under pressure to slash prices in order to attract shopper attention. One trick is to try to use discounting to pull shoppers in, but restrict it to a selection of products in the hope that they will buy other products either at lower discounted rates or even full price, to help balance out any hit to margins overall. It may be that this approach was more successful in some sectors than others.

Bhavesh Unadkat, management consultant in retail customer engagement design at Capgemini, says that Black Friday is in effect eating into December sales. “Given that Black Friday has peaked year-on-year in the last three years, perhaps it’s no surprise that the index registered such a strong result in November.

“What we’re seeing however, is that this surge is actually cannibalising purchases across the peak period. Online sales the week before Black Friday fell an average 7%, while Boxing Day sales have dipped consistently over the last three years. This has even impacted Cyber Monday, with the bulk of shoppers making purchases between Thursday and Saturday, with sales then trailing off on the Sunday and Monday. In terms of what this means for retailers, maintaining momentum across the whole peak period has never been more important.”

Across the sectors, November sales of accessories rose by 60.5%, while gifts were up 47.2%, lingerie was up 35.8% and clothing was up 24.0%. The only sector that failed to grow was health & beauty, which was down 4.2%.

At the same time, multichannel retailers outperformed online-only retailers, turning in higher retail sales growth rates for only the second time this year, and by a significant difference of 9.9 percentage points.

Across mobile channels, tablets’ resurgence continued with sales completed on the device up 12.5% year on year. Sales on smartphones grew by 89.2% compared to last year. Both figures exclude travel retailers.

Black Friday move online borne out by sales figures showing ecommerce sales up by a quarter in November 2016

internetretailing.net, December 16, 2016, Over the course of Black Friday week, the perception was that more sales were taking place online, while fewer people headed to the high street. Official figures out this week seem to confirm that move, with news of online sales growth of almost a quarter in November.

The amount spent online rose by 24.9% during November, according to the Office for National Statistics’ (ONS) Retail Sales Index, compared to the same month last year, and by 3% compared with the previous month, October 2016.

At the same time, shoppers spent 5.9% more across the retail industry – which mostly takes place in shops – compared to last year, and 0.5% compared to the previous month. The increase came as shop prices went up for the first time in November for the first time since June 2014, by 0.1%.

In total, shoppers spent £34.2bn in the retail industry – or £8.5bn a week, while online spending reached £1.1bn a week. It seems that ecommerce grew its share of sales, while also contributing to overall growth. Online sales accounted for 15.8% of retail spending, compared to 13.3% in November 2015.

“Black Friday clearly swayed shoppers to log-on instead of hitting the high street, with e-tills ringing to the tune of a 24.9% year-on-year increase in the amount spent online,” said Paul Martin, UK head of retail at KPMG [IRDX VKPM]. “Clearly the shopping extravaganza is continuing to win favour with Brits, however it’s worth remembering that these figures only just capture Black Friday and not Cyber Monday – which will be included in next month’s instalment. They also don’t account for any returns shoppers might make, which could be higher than normal when impulse purchases require a second thought.”

Online food sales grew by 23.8%, or 5.2% of all retailing. The fastest growth came in household goods stores, where ecommerce sales grew by 33.7%, and accounted for 11.6% of all sales in the sector. Textile, clothing and footwear stores grew by 14.8%, to account for 15.1% of sales, while department store sales grew by 14.2% to account for 13.5% of all sales.

Martin said: “Household goods stores selling furniture, lighting and other appliances continued to perform particularly well. In fact, sales of electrical appliances shot up by as much as 19.1% compared to October, so promotions in this category clearly struck a chord with shoppers.

“Further reinforcing the direction of travel in relation to retail pricing, November noted the first year-on-year increase in average store prices since June 2014, albeit the largest increase came from petrol stations. Black Friday may well have boosted sales in November, but retailers will be hoping that the growth is prolonged into December.”

The ONS also saw a link between the increased sales and Black Friday discounts. Kate Davies, ONS senior statistician, said: “Retailers saw continued growth in the run up to Christmas. Department stores and household goods stores had a particularly strong month, especially in sales of electronic goods, boosted by ‘Black Friday’ deals.

“Annual growth in fuel sales, however, was at its lowest level for almost two years as prices increased at the fastest rate since 2011.”

At the same time, performance marketing specialist Webgains said that it saw Black Friday sales at more than 2,000 clients including Nike, Mothercare, Feelunique and Samsung, grow by 28.13%, compared to the same time last year – and warned that some brands could see a dip in Boxing Day sales as a result.

Richard Dennys, chief executive of Webgains said: “UK shoppers bought into Black Friday promotions more than ever this year, but brands must do all they can do ensure this isn’t at the expense of a profitable Christmas and Boxing Day period.

“Whilst the high street has been buoyed by overseas shoppers capitalising on the devalued pound, online brands must up their Boxing Day efforts by strategically placing promotions across the most effective media.”

Commenting on the ONS figures, Heather Barson, director for retail and hospitality, UK and Ireland at Fujitsu, said: “The latest ONS figures reveal a strong and thriving UK retail sector even during times of economic uncertainty. The Black Friday and Cyber Monday period clearly provided a significant boost, with sales up 5.9% compared to last year. The results also demonstrate how shoppers online habits are evolving, with online sales up 24.9%, compared to last November, and is a clear indicator of consumers becoming ever more at home with using digital channels to shop.

“This rise in popularity of online shopping shouldn’t be viewed as a threat to the high street however. What bricks and mortar retailers ought to be doing is embracing it as an opportunity to reinvent themselves. British shoppers still value high street stores, with 63% saying so in a recent survey, emphasising that touch and feel provides an important experience for consumers. However, the multitude of retail options, from online and social to mobile and in-store, have led to consumers becoming increasingly intolerant of retailers who don’t have a strong omnichannel strategy in place. It is essential therefore to have seamlessly integrated channels that flow from the shop floor, to the back end systems through to the online store. This will enable customers to move freely from one to the other during their shopping experience and shop the way they wish in this new digital age.”

Residential housing sales nearly double in November; sales volume up at $84M

KAPAA — A move to finalize purchases of residential housing in the latter months of the year are among the reasons for an almost doubling of sales on the Garden Isle in November.

“There is a big push historically to close by the end of the year — sometimes for tax purposes,” said Julie Black, principal broker and owner of Kauai Dreams Realty.

The holiday season is another factor for added sales.

“I also find the closer we get to Christmas, the busier it gets,” Black said. “I think that’s from people coming over from the cold winters. They’re already planning to be here. They want to be here for Christmas, but they’re planning to live or buy over here.”

For the month of November, Kauai saw 61 residential sales — a 96 percent increase from the 2015 mark of 31 sales, according to Hawaii Information Service.

While prices are increasing, local buyers are entering the market, said Hannah Sirois, Kauai Board of Realty president.

“In this case, we hope that buyers understand that flexibility can be a friend,” she said. “Elect to look at other regions where supply is available or consider whether a condominium purchase meets the housing need.”

The overall median sales price in November is $598,000, up from $585,000 last year.

“At the end of the year, people are looking where to invest their money, so they don’t have high tax the following year,” said Karen Ono, Kauai Board of Realtors executive officer. “That’s why they invest in property instead.”

The Kawaihau area saw the largest number of residential sales with 22, more than doubling the 2015 mark of 10. Black said the Kawaihau area is popular with residents because of affordability.

“For what you get for your money, a (similar) house here would be more in the North Shore,” she said.

Sales volume in November also trended on the upslope. The Garden Isle saw about $84 million in sales in November, up from $29 million in 2015. The largest bulk of sales occurred in the Hanalei area, which saw sales volume of $48 million.

“We understand and acknowledge that there are parts of the island, such as the North Shore, where there is a distinct lack of both affordable and moderately priced inventory for sale,” Sirois said.

The majority of her customers in November were residents, Black said. “For our company, sales have been for people to buy homes to live in,” she said. “A couple of my sales have been people on the mainland, but have been living here for a while. A few of them are people who live here.”

Though number of residential sales have more than doubled in November, Black said the island’s inventory is low. “Where figures have come up 300 percent in Waimea, it’s still not a huge number because it’s not like we had a 100 sales and it went up 300 sales,” Black said. “If you look at the actual number of units, it hasn’t been a big inventory to begin with.”

Ono added: “Prices will increase because there’s no new stock.” Historically low interest rates are another factor for increased number of sales, Sirois said. “Whereas the typical home loan in 2008 was in the mid 5 percent range, qualified borrowers today find local lenders offering loans in the mid 3 percent range,” she said. “Buyers are recognizing the compound savings.”

Footfall decline deepens in November despite Black Friday sales

Footfall in November was down 1% on a year ago, a deepening of 0.9% fall in October.

According to the BRC-Springboard Footfall Monitor for November 2016, the month’s decline was just below the three-month average rate of -0.8%. Notably, footfall in shopping centres fell for the tenth consecutive month, with the 2.3% drop in November dragging the three-month average to -2.2% after having remained at -2.1% during the four consecutive months leading up to November.

High Street footfall fell for a third consecutive month, down by 0.7%, whilst retail parks and shopping centres fell by 0.1% and 2.3% respectively, with the latter falling for a tenth consecutive month.

Elsewhere, footfall in retail park locations fell 0.1% after growth in November of 1.1%, while high street footfall dropped for the third consecutive month, with the 0.7% fall being a further drop on the 0.4% fall in October. This is just behind the three-month average of -0.5%.

“As we saw in the sales data, Black Friday did little to impact the overall monthly trend in footfall,” explains BRC chief executive, Helen Dickinson. “Whilst the event clearly attracted shoppers to stores, it was retailers’ online offerings who were the real winner, with shoppers for non-food items spending more than one in four pounds online, setting a new record for online share.”

Dickinson adds: “It’s clear that the browser is rapidly replacing the high street as the venue of choice to hunt down a bargain. With that trend set to continue, the role of physical stores – still an enormously important part of retail – is shifting and retailers are having to re-engineer and reinvent their real estate to work seamlessly with their digital presence.”