2012 in Review

From November 1 to December 31,  $42.3 billion worth of online goods were purchased by U.S. shoppers (comScore). That’s up 14% from the $37 billion comScore reported in 2011 for holiday sales. The largest increases were found to be:

  • Thanksgiving Day,  up 32% to $633 million
  • “Free Shipping Day” (December 17),  up 76% to just over $1 billion
  • Black Friday,  a 28% increase with online sales equaling over $1 billion
  • Cyber Monday,  up 17% with sales of more than $1.4 billion

The largest winner was the traditional Cyber Monday. On this day the top gaining retail categories were:

  • Digital Content and Subscriptions (books, movies, etc.) at 28% growth
  • Electronics up 24%
  • Computer Hardware up 22%
  • Video Games and Accessories up 18%

Most people believe the reason Cyber Monday is so large because consumers are using high-speed Internet connections at work. But the majority of online purchases made on Cyber Monday 2012 were done so from home (47.2%),  followed closely by 47.1% from work.

Overall,  this holiday saw five days each with total retail spending greater than $1B- more than any other year. But despite these numbers, total online spending for the holiday 2012 period did not quite meet the expectations of over $43 billion. In part this was due to fiscal cliff concerns in early December,  but retailers also blame it on the holiday falling in the middle of the week.

For the fourth quarter,  retail is estimated to have seen a growth of just 4%, according to Deloitte. During this same time period,  e-commerce is estimated to have gone up 20% and Amazon is predicted to have seen up to $22.75 billion in revenue for Q4,  which could mean Amazon is looking at an over 70% increase from $13.18 billion in Q3,  according to ZDNet.

Scott Wingo,  CEO and Co-Founder of ChannelAdvisor,  predicted that the strong growth of e-commerce in Q4 2012 would be due to innovation waves that are changing the e-commerce landscape.” Wingo noted that Amazon’s ability to lower shipping costs and increase fulfillment lead to “an overall adoption of e-commerce,” adding that mobile and social come hand-in-hand with further innovation.

The big question Sage Tree is continually asked is, “Does the eCommerce growth detract from or add to retail growth?” While eventually we believe this will happen to some degree,  the current trends don’t support that at all. Online shopping is not only driving e-commerce sales, but offline sales as well for consumers. According to Forrester’s Web-Influenced Retail Sales Report (U.S.),  nearly 50% of consumers research online before purchasing. Meanwhile,  42% research online and purchase online and 32% also research online,  visit the store and then purchase online. And what’s more important is that this trend is only expected to continue. The ‘Omniretailing’ trend that’s talked about in the press is something that manufacturers and retailers alike are just beginning to address.

“With more and more consumers having mobile lifelines that can share… the power is truly in the hands of the consumer.” –econsultancy.com

The key is how you support this trend.

So, what is to be expected in 2013? E-commerce will continue to be on the rise. Goldman Sachs predicts that worldwide online sales will reach nearly $1 trillion. Retail and online sales will become more and more intertwined. We also expect to see brands developing mobile platforms. It will continue to become true that integrating online and offline sales is not only a must,  but increasingly beneficial to both business and customers’ overall happiness.

As always,  we welcome your input and look forward to the conversation;  click here to leave a comment. For an overview on the purpose of this blog,  take a look at the initial post here.

This article was written by:
Bethany Richard,  Sage Tree Trade Marketing Associate


8 comments to 2012 in Review

Leave a Reply




You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>