Digital Makes Major Holiday Shopping Gains, Physical Stores Suffer

Online sales up 11 percent, mobile rises 23 percent
January 11, 2017David Gill

       Kohl’s posted a 2.1 percent drop in holiday same-store sales.
NEW YORK-The holiday shopping season marked another milestone in digital retailing, with online and mobile sales rising by double digits, according to various reports. Physical stores sales and foot traffic, however, lagged.

The season stretching from Nov. 1 to Dec. 31 produced online sales of $91.7 billion, up 11 percent over the same year-ago period, according to numbers from research firm Adobe Digital Insights. Fifty-seven out of the 61 holiday shopping days yielded more than $1 billion in online sales. Looking inside these figures, sales generated by mobile devices totaled $28.4 billion, an increase of 23 percent year over year.

In contrast, sales at brick-and-mortar stores were weak. Sales in the physical store channel fell 10.7 percent in December, on a 13.4 percent drop in shopper traffic, according to RetailNext, provider of retail analytics for brick-and-mortar stores.

Macy’s and Kohl’s reported identical 2.1 percent drop offs in same-store sales for the period, while J.C. Penney’s same-store sales were down 0.8 percent. At press time, neither Walmart nor Target had released their holiday sales figures. However, during a Nov. 16 conference call with financial analysts discussing third quarter results, Target Chairman and CEO Brian Cornell said he expected flat same-store sales in the fourth quarter.

Digital proved to be the bright spot in brick-and-mortar retailers’ assessments of their holiday seasons. Terry Lundgren, Macy’s chairman and CEO, said sales at both and increased by double digits during the holidays. J.C. Penney’s e-commerce business posted a double-digit gain in the period as well, validating the retailer’s omnichannel strategy of improving its website functionality and expanding its fulfillment capabilities, shipping options and product assortment, said Marvin Ellison, chairman and CEO.

The holidays provided other signals of the change in the role of physical stores. RetailNext noted that average transaction value in the stores rose 5.6 percent in December, and sales per shopper were up 3 percent. These measures show “how the role of stores has changed as brands are converging their digital and physical touchpoints into a singular, seamless shopping experience,” said Bridget Johns, RetailNext’s head of marketing and customer experience. Stores should be “focused on brand awareness, customer acquisition and value-added services, complementing the long-term cultivation of shoppers through various digital touchpoints,” Johns said.

David GillDavid Gill | Contributing Editor

David Gill is a contributing editor to HFN.


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