The Changing Retail Landscape and Why it Matters

For awhile now, there’s been an ongoing discussion about the rate of change surrounding all of us. Some say that never before has there been more change in a shorter period of time. Others say, wait just a minute. Right now is not the only time a lot has been changing very rapidly.

That said, we hit the 2019 holiday season on the heels of more than 9,000 store closings since last time around. That’s a big change. But does it matter? (That might be the more important question than the one about rate of change.)

To begin, it didn’t seem to slow the onslaught of shopping in the first weekend after Thanksgiving. While store visits were down (6% on Black Friday alone), online shopping hit $7.4 billion, a 19% increase over Black Friday 2018, according to Adobe Analytics. It’s also the largest number ever for Black Friday online, says Adobe.

Then Cyber Monday arrived. Those numbers came in at $9.4 billion, nearly a 20% increase over 2018.

On the surface, that all sounds massive. But it’s actually just a drop in the old holiday bucket. The National Retail Federation says total holiday shopping will hit $730 billion, a 4% increase total over last year. That’s also twice the rate of growth in 2018 over 2017. Long live the 2019 consumer.

It also means online accounted for not quite 5% of the expected season total in the days immediately following Thanksgiving. So while it’s easy to be wowed by those numbers, they are just limited data points in a much larger aggregate.

Overall, NRF expects that online will account for 23% of all shopping. That’s up from 18% in 2018. What business model wouldn’t love such a healthy increase in just a year?

So where is all this coming from?  For much of it, you need not look further than your hand. Estimates call for 40 to 50% of all online shopping from smartphones this year. It’s worth noting that Apple didn’t introduce the first smartphone until 2007 and nobody used it to shop that year. In fact, we didn’t even know we needed a smartphone until Steve Jobs told us we did. Seems we listened and adapted quickly.

There was even one oracle this year who said 25% of all online shoppers would be shopping from their phones during Thanksgiving dinner. That’s startling. What ever happened to a little respect for those football games during dinner?

That said, the holiday season itself is shifting too. NRF defines it as Nov. 1 to Dec. 31. But even they know there’s now much more to it.
 
The association’s own survey showed that 56% of people started their shopping by the first week of November. That’s up from 48% a decade earlier. Furthermore, by that first week of November, people had completed a quarter of their shopping, up from 16% in 2009. Feel fee to sneer at the 4% of shoppers who had already completed their shopping by November 1.

Look at all this change, and it seems the leap from one stage to the next in holiday shopping is occurring in ever shorter time periods. Or does it just feel that way? Does any of this matter? Tell us what you think, click here.

Next week we’re going to take a look at what all this online buying is doing to warehousing and traffic.

Gary Forger is the former editor of Modern Materials Handling magazine and the Material Handling & Logistics U.S. Roadmap to 2030.

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