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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:
Data Source: Verizon Holiday Shopping Index 2016
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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