Women's Wear Daily (WWD) - December 7, 2011
COVER STORY: Mobile, Tablets Lead Holiday Charge
By Rachel Strugatz
NEW YORK ó Holiday shopping has given new meaning to the term "click and order."
In addition to a rise in the number of consumers and the average amount spent per buyer ó beginning as early as Thanksgiving ó overall increases in online spending were fueled by other factors such as a surge in mobile and tablet commerce transactions, luxury brands that typically donít discount, tiered sale offerings that offer deeper discounts the more you spend and an upsurge in the use of social media platforms.
For Cyber Monday specifically, industry experts projected record numbers, hopeful that retail activity for the day would surpass last yearís $1 billion in sales, the biggest day of online sales in e-commerce history ó until Nov. 28, that is. The single day shattered records in the digital sphere, becoming the most aggressive day in online shopping ever. Spending totaled $1.25 billion ó a 21.7 percent rise from last year, according to a report released by comScore last Tuesday. Transactions on digital mediums were expected to leap by 15 percent ó and reports indicate that numbers surpassed industry estimates by nearly 50 percent. The day saw 10 million consumers shopping online, each of whom spent an average of $125. This is the second time online shopping has reached the $1 billion mark in a single day (the first was Cyber Monday in 2010).
But the explosion in online sales didnít come only on Cyber Monday. Black Friday raked in $816 million in online shopping, a 25.9 percent increase from the previous year, and Thanksgiving Day saw $479 million, an 17.7 percent increase from 2010.
Consumers are also shopping on the go more than ever ó while eating, commuting or at school (so much for listening to teachers). In a report released by comScore Monday, 38 percent of smartphone owners have used a mobile device to make a purchase at least once. For the month of September specifically, clothing and accessories were the second-most popular category for smartphone device transactions (behind digital goods), with 37 percent of mobile users purchasing these items directly from retailers. As for location, 56 percent of mobile shopping occurred while users were at home, 42 percent while out of home in places such as restaurants and school, 42 percent while at work and 37 percent during traveling or commuting.
The trend is continuing this holiday. "It should be called Mobile Monday," eBayís vice president of Mobile Steve Yankovich told WWD about the growth of m-commerce. "I call it Ďsituational shoppingí because itís about the situation that youíre in where you get inspired to buy a product. If youíre at lunch with a friend and they recommend a product [is one situation] and the other has to do with where you are ó where you really have no alternative to act as a consumer. That is the time when youíre stuck on the train, or waiting for a plane to board, or in traffic. Now, you can actually be a consumer and buy in those situations, whereas before, you didnít have a laptop with you."
Cyber Monday saw a spike in mobile activity on eBay between two and two-and-a-half times the normal rate at which consumers conduct transactions on their mobile devices, according to Yankovich, who added that eBayís mobile app has been downloaded more than 58 million times since it launched about three years ago ó and it gets anywhere from 600,000 to 1 million new downloads a week. The app sees $180 in purchases a second, which translates to $648,000 an hour or $15.5 million each day. Twenty-four percent of all mobile activity is derived from clothing, footwear and accessories purchases ó and when you do the numbers, this adds up. In a report released by the Web site, clothing, shoes and accessories was the most popular category shopped on eBay Mobile, and the top three fashion items purchased were Tomís Classic Shoes, Ugg Australia Classic Short Shoes and Converse Chuck Taylor All Star Shoes.
"Mobile is transforming how people shop and how they expect to shop. Itís changing the game in how they think of physically shopping ó whether itís a companion to brick-and-mortar or avoiding the store altogether. Your physical location doesnít matter," Yankovich said. To that effect, comScoreís mobile shopping report found that more than one in three purchases occurred while the shopper was in-store, illustrating how mobile is becoming increasingly important as a counterpart to the brick-and-mortar retail experience.
Yankovich noted that the average item listing posted through mobile takes only 38 seconds from start to finish. On a weekly basis, the eBay app gets over a million new listings created this way. "You can stand in your closet, take a picture, and the listing is up in no time at all. Before you know it, you have cash in your account and youíre off to your next purchase. It becomes the fuel for the next acquisition, and mobile takes a lot of the friction out of doing that."
Tablet shopping, which Yankovich refers to as "couch commerce," makes up a double-digit percentage of eBayís weekly mobile volume. He said on Thanksgiving at around 6:30 p.m., there was a huge blitz in transactions coming from iPads and iPhones ó although the majority of tablet use occurs in the evening, as the device lends itself to post-dinner shopping between 6 and 11 p.m.
"Youíre still with family, but itís socially OK to whip out the phone or tablet while youíre still spending time with them. Why is Thanksgiving after dinner a big volume time, though? Because people are talking about what to get so and so for Christmas," Yankovich said.
Experts expect the Cyber Monday boom to continue.
"Itís been on an upward trend for the last few years and it hasnít hit a ceiling yet," said Sucharita Mulpuru, a retail analyst at Forrester Research, adding that although mobile shopping in general might prove to be a threat to hard goods and commodities such as PCs and appliances, itís more of a supplement to the shopping experience for other categories such as apparel. Itís tablet shopping that is taking away from desktop shopping more than anything, but Mulpuru just calls this "device shifting."
"Mobile and tablets have the potential to encourage people to be more connected to brands, to encourage shoppers to choose to spend their dollars online instead of in stores. Weíve seen that happening with flash-sale sites, which do a significant part of their volume on mobile and tablets. The effect though is still small, but itís likely to continue to grow rapidly in the future," Mulpuru said.
At social shopping search engine ShopStyle, 25 percent of overall traffic on Cyber Monday came from mobile devices.
According to vice president of marketing Melissa Davis, mobile page views were up 420 percent from last year (when the site launched its first mobile app), and in the past month alone, thereís been a 35 to 40 percent increase.
ShopStyle on Black Friday generated more than $2.3 million in sales for its partners, including Neiman Marcus, Shopbop and Net-a-porter ó and it projects a 25 to 30 percent increase from the $1.2 million it drove in sales during Cyber Monday last year. Page views from Cyber Monday were up 38 percent, year-over-year, and the click-through rate also went up by 52 percent. Interestingly, the site reported that its strongest shopping days (per page views) occur after Christmas on Dec. 27 and 28, unlike others who report the weeks leading up to Christmas as the strongest.
At Net-a-porterís discount counterpart The Outnet, sales from mobile and tablets increased by 10 times since last yearís Cyber Monday, the vast majority of that spike coming from tablet sales, which saw a 400 percent increase over last year. Itemwise, sweaters accounted for 25 percent of all tablet sales and nearly 33 percent of mobile sales, and the average mobile order was 6 percent higher for the day, according to Kari Albert, vice president of global sales and marketing at The Outnet. And at Net-a-porterís menís wear site, Mr Porter, orders placed through a mobile device were up 260 percent against normal Monday shopping, according to head of sales and marketing Mario Muttenthaler.
The growth of m-commerce aside, the most interesting e-commerce trend to emerge so far this holiday has been that of luxury brands introducing promotional tactics, according to Maureen Mullen, director of research and advisory at Luxury Lab, or L2 Think Tank. Brands such as Oscar de la Renta and YSL Beauty have traditionally not discounted.
"This just shows how much further these brands have come to really embracing their customers digitally," Mullen said, noting that each offered a promotion in a way thatís very on-brand for each entity. For example, Oscar de la Rentaís social media personality, Oscar PR Girl ó who generally doesnít tweet about product ó found a way to promote a handbag available exclusively on oscardelarenta.com in a way that was appropriate for the brandís high-end luxury customer, as well as her large following on a digital platform such as Twitter (where she has nearly 95,000 followers).
The rise of social media as a marketing tool in the fashion industry ó where itís commonplace for retailers and brands to garner followings in the mullions ó is also impacting online shopping in a big way.
"Like anything else, it [social media] allows you to get your message so much faster and so much more dynamically, so you actually see analysts tracking Cyber Monday," Mullen said. "What this does is generate more excitement around the day, and ultimately increase e-commerce sales."
A survey conducted by Facebook the week of Thanksgiving through Cyber Monday revealed that 14 percent of users shared deals with their friends, with 20 percent of those under 25 sharing with friends. On Nov. 26 and Nov. 27, 24 and 27 percent of respondents said they planned to online shop on Cyber Monday ó up from just over 20 percent on Nov. 22. Thirty-five percent of 35- to 44-year-olds surveyed on Nov. 26 said they planned to online shop Monday. In the days leading up to Thanksgiving, users mentioning "Black Friday" on the social medium increased by seven times on Thursday (versus the days prior) and 29 percent of teen males and 21 percent of teen females between 13 and 17 said they shared Black Friday purchases with friends. The second-highest percentage occurred within the 18- to 24-year-old range, where 23 percent of males and 22 percent of females shared purchases.
Footwear brand Rocket Dog offered its more than 45,000 Facebook fans an exclusive deal on Cyber Monday, which resulted in 2,654 orders, according to Stylophane Interactive Agency, a firm that works with the brand. By using coupon code "Facebook10," consumers were able to obtain an extra $10 off purchases (already on 50 percent off at rocketdog.com for Cyber Monday) between 10 a.m. and midnight, and the brand received 189 transactions per hour. In addition to Facebook exclusives, many brands and retailers also used Facebook to cross-promote Cyber Monday deals on their branded Web sites and the social medium, such as Ann Taylor, Loft, Tory Burch and Express.
According to Macala Wright, founder of FashionablyMarketing.Me, brands offered exclusive deals on the medium that ranged between 20 and 40 percent off with free shipping, with the average discount clocking in at 25 percent.
"Because consumer spending was better than expected, you will continue to see brands run promotions until the last minute with a final push just before that last shipping day. Retailers are focused on sales this holiday in the midst of better spending than expected," Wright said of the 105 pages surveyed by her firm, including J. Crew and Banana Republic.
Scott Silverman, co-founder and vice president of marketing at IFeelGoods and the Shop.org veteran said to have coined the term "Cyber Monday" in 2005, told WWD that heís confident in social media having the ability to "amplify" e-commerce deals because people will get excited and share them on Facebook and Twitter. When a retailer posts a promotion, all of its fans will see it and share it with their friends ó increasing the messageís level of authenticity platform-wide.
And Charlie Graham, chief executive officer of Shop It to Me ó a free, personal online shopper with over 4 million users whose model is strictly based on discounted merchandise or sales ó believes that "tiered offers" were more widespread than ever this year.
"They are offered every year, but we saw more of a trend with it this year. The big reason is that everyone is now offering sales, so retailers are trying to find a way to have you spend more of your wallet with them. This is a good way to do it, instead of just having a standard discount. They want to give you an extra discount if you spend more," Graham said. For example, Endless.com offered consumers $30 off $100 orders, $60 off $200 orders and $100 off $300 orders. At Tory Burchís site, toryburch.com, 20, 35 or 30 percent off was granted to shoppers who spent $250, $500 or $750. Similar deals were available at neimanmarcus.com, bloomingdales.com, calvinklein.com and Shopbop.com.
To view Stylophane's Facebook Fashion Index: http://stylophane.com/fbi