Web shops take share of holiday spending

Bloomberg

Black Friday advertising is displayed on the eBay Inc. website in Washington, D.C., U.S., on Tuesday, Nov. 22, 2011. Black Friday, the day after Thanksgiving, is the busiest shopping day of the year, and has often been considered the unofficial start to the holiday-shopping season. U.S. retail sales growth may slow to 2.8 percent this holiday season after a 5.2 percent jump last year. Photographer: Andrew Harrer/Bloomberg

Danielle Kucera

US online retailers are poised for a record $43.4 billion (R384.9bn) holiday sales season as eager shoppers increasingly rely on social networks, as well as mobile devices, to find and buy merchandise.

Internet sales would grow 17 percent from a year earlier and make up more than 10 percent of US retail spending, excluding fuel, food and cars, in the last two months of the year, said Andrew Lipsman, the vice-president of industry analysis at ComScore.

That compares with $29.2bn spent online during the same period in 2007, when electronic commerce made up 7.4 percent of total spending.

The growth of smartphones and tablets gives buyers the ability to shop anytime and anywhere, an opportunity that web retailers have been eager to exploit by offering sales to coincide with traditional storefront deals.

They are also offering applications to make mobile retailing more seamless while tapping into social media, where shoppers increasingly find and share information on merchandise.

“People are shopping on their mobile devices between 7pm and midnight – that’s an occasion that just didn’t exist in the past, and now we’re seeing it happening in a big way,” Lipsman said.

Last Thursday eBay began offering mobile-only deals starting at 5.23pm New York time – the exact moment when it expected diners to push away from their pie plates and start scouring the web on Thanksgiving Day.

Four days earlier, Amazon.com debuted a holiday deal site promising bargains to shoppers who used its mobile app or signed up for alerts on social networks such as Facebook and Twitter.

Moving online

Online sales already gained 17 percent on Thanksgiving Day, according to research by IBM, signalling shoppers are no longer waiting for the so-called Cyber Monday that follows Black Friday discounts by brick-and-mortar retailers.

On Black Friday, online sales, excluding eBay and other auction sites, surged to over $1bn for the first time, according to ComScore.

Amazon was the top retailer that day, with more than 57.3 million US visitors, the researcher said.

That growth has been driven, in part, by mobile shopping, thanks to the growth of smartphones and tablets, along with faster networks, that can deliver a richer web shopping experience even when consumers are away from their personal computers and laptops.

“Mobile is a game changer,” said Steve Yankovich, the head of mobile business at eBay, the biggest online marketplace.

“Consumers expect to shop on their own terms, and tablets and smartphones make every moment instantly shoppable.”

Mobile buying

Emarketer estimates that web-based sales completed on phones will rise 53 percent in the US this November and December and make up 5.2 percent of internet buying.

By 2015, mobile purchases will contribute 9.5 percent.

Photo-sharing sites such as Pinterest that invite users to “like” and share products – from dress shoes to iron bed frames – were helping to fuel growth in online sales, Lipsman said.

The site has about 25 million users, four times what it had heading into the holiday season last year.

While shoppers still have to leave some social sites to buy items, services like Pinterest – and more recent copycats such as Svpply and Thing Daemon’s thefancy.com – can turn visitors into buyers by letting them see what their friends and style idols are buying.

Social commerce

“For a long time, we kind of talked about social commerce,” Lipsman said.

“People would be making product recommendations on Facebook and Twitter, but what really is starting to hit this theme on the head is Pinterest.”

Almost a quarter of online shoppers take advantage of offers delivered via social media, according to a holiday retail report by American Express, the biggest US credit-card issuer by purchases.

CafePress, which sells customised items such as T-shirts and coffee mugs online, keeps a close eye on what images, buzzwords and products wax and wane in popularity on social media websites to decide what to sell.

“All of our content is socially curated, so we have to really watch for what is emerging,” Bob Marino, the chief executive of the online retailer, said.

Showrooming

Shoppers have also developed a habit known as showrooming: inspecting an item in a physical store and then searching online for a lower price.

About one third of shoppers do this, according to ComScore.

Showrooming has been made possible by smartphones and tablets, as more people browse the aisles at stores such as Target and Macy’s and instantly look up competing online prices.

Compared with last year, holiday shoppers this year are seeking more deals on smartphones, using more applications that scan bar codes for price comparisons and accessing more discounts through mobile apps, according to American Express.

Amazon.com’s “Price Check” app lets users scan a bar code with a smartphone camera, which then calls up the online retailer’s price.

Users can then move the item to a shopping cart or order it on the spot. – Bloomberg