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It’s Christmas for Online Stores

How Internet retailing has evolved in a year! The rush is over and the results are starting to come in. The 2014 pre-Xmas Thanksgiving sales season is now coming to a close, though there is plenty of evidence that this year's event is actually more than just Black Friday and Cyber Monday. In fact, the heavy promotions started at least a week before Thanksgiving, both in-store and online, and Cyber Monday is giving way to Cyber Week.

To complicate things even more, many stores began Black Friday on Thanksgiving Day. The result has been a smearing out of promotional efforts and, as a result, Black Friday and Cyber Monday traffic likely underestimates the whole season.

The numbers still show that online is winning over brick-and-mortar (B&M) stores. Sales online on Cyber Monday itself grew 8.8%, which is lower growth than the 20.6% in 2013, but the weekend was up 17% compared to the same weekend in 2013.

Digging under the covers a bit points up some surprises. IBM has done a stellar job of trend capture. The results include the fact that desktop sales average 16.6% more in average order value (AOV) than mobile. iOS users spent 24.3% more per order than Android users. iOS also accounted for twice as much online traffic as Android, but nearly four times the total sales.

Another IBM statistic is that, while smartphones created twice as much traffic as tablets, the reverse was true with actual sales, where tablets claimed 36% more sales, with 17.6% more AOV. These figures, combined with the desktop statistic, suggest that customers aren't too happy working with the small images and limited flexibility of mobile screens. They need a tablet or full desktop screen for comfort. This may mean Chromecast-like functions for displaying a mobile screen on TV are more useful than ones used just for streaming.

IBM's statistics on social-network referrals show vastly different performance. Facebook referrals garnered 10% more AOV than Pinterest, but Facebook referrals converted to orders at twice the rate.

Other statistics point to the technical aspect of competitiveness. Site average response latencies differ significantly, with more than a 4:1 range among large retailers. Buyers aren't patient, and slow response could be a killer to converting a visit into a sale. Of course, no one wants to go to the extreme of Best Buy, whose site crashed three times, or Oracle, who lost its whole hosting setup for a while on Cyber Monday.

Technology also played a hand in speeding up delivery of very targeted ads. The days of just throwing ads into the round-robin pool are over. Analytics can give a pinpoint ad within a minute of your visiting a site. Such ads can increase sales while you are still on-site and create a high click-through later from other sites.

This idea is under test in the B&M stores. As a take-off from K-Mart's Blue Light Specials, Bluetooth-connected “Blue Beacons” are feeding instant ads to smartphones, with incentives and interest focusing results. These beacons are driven by a combination of position detection and analytics software.

Forrester Research reckons the online market will reach $89 billion this holiday season. The dropping cost of energy is increasing discretionary spending, amid signs that hiring is trending upward nationally. Even so, the hoopla over Black Friday (and the pain of two-hour lines for service) and for Cyber Monday are likely to lose steam in future years as online sales become more agile, targeted, and spread out over a period of weeks.

24 comments on “It’s Christmas for Online Stores

  1. FLYINGSCOT
    December 26, 2014

    For the first time ever the UK started the Black Friday phenomenon and it was interesting to watch people scrambling to purchase goods that they perhaps did not really need.  People were fighting and squabbling and I am not sure it advanced us as a society.

  2. t.alex
    December 27, 2014

    While people spending money on gas and time on trips to grab presents for Xmas, I stay home and Amazon prime helped me to get all the gifts on time. I'm so thankful for online shopping, making my life a lot easier, save time, money and all the engergy lining up during this holiday.

  3. Ashu001
    December 27, 2014

    FlyingScot,

    The Black Friday phenomenon in the UK was quite successful this time around.

    However,Back in the US Black Friday(even of the Online Variety) is seeing declining Sales Figures because consumers are starting to seriously tire of the whole charade.

    Eventually Thanksgiving in America will turn out to be what it always should have been-Focussed on near and Dear ones rather than this intense Shopping Experience.

     

  4. Ashu001
    December 27, 2014

    Alex,

    I like this period primarily because I can spend more time with Family.

    Everything else(incluidng the Shopping )is just extraneous to this story.

  5. Anand
    December 29, 2014

    Spending time with family is luxurious, however a holiday season doesn't feel like a holiday season without online shopping and gifts! It only pains me to think how relentlessly those people in the online store chain would have to work even on holidays. There should be some regulations, shouldn't there be?

  6. Anand
    December 29, 2014

    @t.alex: Amazon did a tremendous job in delivering gifts this Christmas, which really brings to mind the aspects of drone delivery. Even delivery people need time off with their families. Maybe they could learn to commandeer a drone and go to their homes and relax while carrying out their delivery tasks with the help of a drone!

  7. Adeniji Kayode
    December 29, 2014

    @Flyinscot, well, it that not the main idea behind black friday, the stores want to sell out and so drop prices to entice comsumers.

  8. Adeniji Kayode
    December 29, 2014

    @ t.alex, That is one of the aims of online stores -to make shopping very easy while you spend without realising it.

  9. Adeniji Kayode
    December 29, 2014

    @ FLYINGSCOT, I agree with you on that. I think the idea is to remember the loved ones at this timecof the year and send them gifts too and since anything can be used as gifts, many stores take that opportunity to slash down price so as to sell more.

  10. Adeniji Kayode
    December 29, 2014

    @ tech 4 people, well, that is a good part if the fun but then how do you spend time with family without going somewhere or visiting a place or buying something to add to the fun

  11. Adeniji Kayode
    December 29, 2014

    @anandvy i think that part of the year is an exciting part of the year for them, so they toi look forward to it especially because of the opportunities that come with such season.

  12. Adeniji Kayode
    December 29, 2014

    @ anandvy, Good point there but then the drones would need pilots and probably engineers to maintain them, this may or may not be cost effective.

  13. Himanshugupta
    December 29, 2014

    It is really not too long ago that targeted ads and promotion was a fancy idea but with the advant of big data and analytics along with sophisticated algorithms the targeted ads are getting more effective. There are for sure privacy concerns but i think they will go away with time.

  14. Himanshugupta
    December 29, 2014

    i think the people working for the online stores are not the only ones who work extra on holiday seasons. There are more such profession where people have to work overtime and one such profession is courier delivery person. But i think online retailers, supply chain professionals and courier companies make the holiday experience worth and not in silos.

  15. Adeniji Kayode
    December 30, 2014

    @ Himanshugupta, well, that ought to be the ideal thing in such case.

  16. Hailey Lynne McKeefry
    December 30, 2014

    @Flyingscott, i think in the US there has been a bit of pushback against Black Friday–at least as it had started drifting into Thanksgiving. A number of retailers made a point of advertising that they weren't opening on Thanksgiving (something I personally was thankful for!). There's always a marketing hype element to be had. If not Black Friday, then we invent Cyber Monday. This year, I also noticed a grass roots end of year campaign to encoruage people to give to a favorite charity…maybe some of the savings on all those electronics products could go to that! 🙂

  17. Ashu001
    December 31, 2014

    Adenji,

    You can always play Boardgames,Cards,etc at Home with all Family members.

    Have Monopoly and Uno  become extinct?

  18. Ashu001
    December 31, 2014

    Hailey,

    Fair enough!

    The Whole Black Friday Circus was massively over-rated anyways!

    Wishing you a Very Happy and Prosperous New Year 2015!

    EBN will definitely go places in 2015!

  19. Ashu001
    December 31, 2014

    Anandvy,

    For many such Employees[Working for Online Retailers];their jobs are part-time/seasonal.

    They get plenty of time off between Gigs so they make the most of the time when they are in demand for work.

    Regulations simply end up complicating things unneccesarily.If you are'nt able to keep up you should just take sometime off on your own.

     

  20. ahdand
    December 31, 2014

    Im up for it and will surely support towards the new ventures. Happy New Year everybody

  21. ahdand
    December 31, 2014

    @tech4people: Depends on what yu want isn't it ? Also on the mood itself. I don't mind Monopoly but after sometime I get fedup of it. 

  22. Adeniji Kayode
    December 31, 2014

    @ tech 4 people, weĺl, different people catch their fun from different things.

  23. Adeniji Kayode
    December 31, 2014

    @tech 4 people Seconded you on that. Looking forward to better EBN in 2015.

  24. Adeniji Kayode
    December 31, 2014

    Wishing everyone a prosperous 2015.

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