RESEARCH TRIANGLE PARK – Now that the data has been crunched, what are lessons to be learned from another record Black Friday and Cyber 5 (Thanksgiving through Cyber Monday)? From brick-and-mortar survival to the importance of getting the customer experience right, there is a lot to discuss.
WRAL TechWire reached out to ChannelAdvisor, the Triangle-based company with nearly two decades of experience in the online selling world, for insight.
Mike Shapaker, Chief Marketing Officer, offers his in an exclusive two-part Q&A.
Here’s part one.
- What are the key conclusions made from the Cyber 5 data?
Overall, we continue to see strong year over year gains in GMV [gross market value] growth. For example, ChannelAdvisor’s preliminary results for Black Friday show a 31% increase (year over year) in GMV. In 2019, GMV peaked at $69.5M on Black Friday compared to $52.9M in 2018.
As online continues to grow and promotions continue to be posted earlier and earlier, we continue to see a shift to earlier purchases.
However, we do see strong growth across all days during Cyber 5.
- How are ecommerce purchases changing as they become more popular – fewer security concerns? If so why?
E-commerce continues to grow as a percentage of overall retail sales. We don’t believe security has been a concern for the majority of people for a number of years now. What has changed is that we continue to see shopping via mobile increasing, with roughly 40% of e-commerce sales coming via smartphones. One explanation for this is that the friction of using a phone continues to decrease. For example, the Amazon mobile app allows you to purchase very quickly.
Buying online and picking up in-store (BOPIS) is another trend that seems to be increasing as more retailers offer this service as an
option. It’s a win-win as consumers can get their goods faster and retailers save on shipping costs.
Mobile payments through smartphones are growing, according to Juniper research – do you see this trend in weekend data? Why are consumers going this route? How are retailers responding to simpler payment tech?
We don’t host a cart so this is a trend we see in only part of our data. However, as referenced above, this trend has continued into 2019. Consumers are going this route because they always have access to their phones (unlike a desktop) and it’s getting
easier and easier to finish a transaction via the phone.
- What impact is free shipping having on ecommerce? A big driver? You have predicted that would grow importance dating back to 2016.
Free shipping is a huge driver on e-commerce. It has helped fuel Amazon’s growth, for example, and everyone else is into the game now as well. Although it’s counterintuitive, a product with free shipping and price X will often outsell a product with price Y and paid shipping, even when the combined price including shipping (Y+ shipping) is less than the price (X) of the product with free shipping. Free shipping is
essentially table stakes for most of e-commerce at this point.
- Based on what you have seen this weekend, what do you forecast for the rest of the holiday season?
Last year, we saw an earlier focus on promotions pull forward a lot of the holiday spending. Though we saw growth throughout the period, we saw more growth earlier than in previous years.
Given the strong growth so far this year, it would be reasonable to assume that the early promotions continue to skew sales earlier in the period. With Thanksgiving falling as late as it can be this year, though, there is a slightly different dynamic where we may see growth continue strong into a more compressed time period.
- What are the new tech drivers this year for ecommerce? is artificial intelligence helping, for example?
The tech drivers are probably less important than the consumer experience. It continues to get easier and easier to shop and pay online (and via mobile) and the speed of delivery continues to increase so that consumers know and trust that they will receive goods in a timely manner.
Behind the scenes, AI and pricing algorithms and personalization all may help get the right offers in front of the right people, but we think this is probably less important than getting the consumer experience right.
- Finally, what should brick-and-mortar retailers be doing to survive as it’s clear the ecommerce train is becoming an express.
We see successful brick-and-mortar stores doing a few key things:
1) Differentiating the in-store experience through quality products, expertise, services, and/or the store
2) Matching prices, as needed and where it makes sense with online
3) Creating buy online and pick up in-store programs that help drive traffic and reduce shipping costs.
While there are a lot of brick-and-mortar retailers struggling, differentiated companies are doing well. If the model were totally dead, we wouldn’t see companies like Amazon expanding their store footprints.