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After a record-setting Cyber Week kickoff, ecommerce sales continued to grow over the first few holiday shopping weeks of December despite the economic anxiety, according to Salesforce. But the end of the season could bring new challenges as returns flood in.
Based on the activity of over 1.5 billion shoppers, Salesforce released the following data for the three weeks after Cyber Monday (Nov. 29-Dec. 19):
US online sales grew 8% year-over-year, with $97 billion in online orders placed.
Global ecommerce sales grew 2%, accounting for $395 billion in holiday spending.
US sales are setting the pace. Since Nov. 1, US digital sales are up 5% year-over-year, totaling $245 billion. Meanwhile, global sales are flat at $1.03 trillion. This comes as online sales in Europe are down due to more acute inflationary and geopolitical challenges.
Top categories included active footwear (up 40% year-over-year), active apparel (+22%) and general footwear (+19% YoY).
Social referral traffic grew 23% year-over-year globally in the first three weeks of December, and represented 12% of all mobile traffic. In the US, social traffic was up 28% annually.
Taken together, it’s an indication that the pace of spending has kept up into December.
“After a surprisingly strong Cyber Week in the U.S., retailers are continuing to offer attractive online discounts in the final few weeks of the holiday to clear balance sheets and shelf space,” said Rob Garf, VP and GM of retail at Salesforce, in a statement.
Those discounts have been a hallmark of this holiday season, as shoppers seek to find savings at a time of four-decade-high inflation. According to an analysis of more than one million products from dynamic content creation platform FindMine, revenue from products on sale jumped 26% from Monday to Friday during Cyber Week.
Overall, shoppers are going for the deepest discounts this year, even as retailers aren't increasing the percentage of products on sale. For retailers, a common tactic is to introduce site-wide discounts, which change the items that are on sale daily. This means consumers can return to find new deals, but often it doesn't change the more challenging margin equation for retailers.
“Consumers are increasingly choosing sale products over full-price ones, where their dollars go further for having stacked a discount," said FindMine CEO Michelle Bacharach. "For retailers, it's a delicate balance to try and clear excess inventories that have been clogging balance sheets while also protecting margins and maximizing profits.”
While it's a promotional environment, there are still opportunities to gain. Nike executives said strong holiday season results so far were in part powered by 34% year-over-year digital growth in its most recent quarter. The brand is seeing full-price sales in footwear, providing a measure of confidence about maintaining profit margins.
"In North America, our Black Friday and Cyber Week performance set record highs for demand and traffic, fueling strong double-digit revenue growth and exceeding our plan," CFO Matthew Friend told analysts on Tuesday.
What to watch in the final days
The days of the holiday season are ticking down. But with the 2022 calendar gifting last-minute types a full shopping week, there is still expected to be a late surge of activity in the final days, and even after Christmas. Here are a couple of areas of ecommerce where Salesforce is expecting increased activity in the finale:
BOPIS, or Buy Online Pickup in Store, is expected to surge in the week leading up to Christmas, especially as the windows for delivery begin to close. Already, nearly one out of five global orders placed have done so using this hybrid fulfillment method. In the two weeks after Cyber Week, BOPIS was at a 19% share, but ticked up again last weekend. By Saturday, Dec. 17, it accounted for 25% of all orders.
Returns are expected to turn into a "tsunami" in the final weeks, as they are increasing significantly this holiday season. After seeing return rates nearly double in the week after Cyber Week and remaining high, Salesforce is projecting that 13% of orders will be returned, meaning 1.4 billion products will be sent back. That would be an increase of 57% year-over-year. Careful consumers are using returns more frequently in a highly promotional environment, Salesforce said. In one of the observed behaviors, consumers are returning items that they bought earlier in the season after finding a better deal.
NPD: Overall retail lags
When it comes to retail as a whole, The NPD Group found that the first two weeks of December were running behind 2021 totals. Retailer point of sale data collected by the group showed the following:
During Cyber Week, NPD found that discretionary general merchandise sales revenue fell over 2 percentage points.
From Dec. 4-11, sales fell 5%.
Through Dec. 10, fourth quarter sales revenue at retailers was down 6% from 2021, and unit sales were down 10%.
“The traditional feeling of spirited chaos is missing from retail this holiday season, and not in a good way,” said Marshal Cohen, chief retail industry advisor for NPD, in a statement. Cohen added that “momentum and the urgency to shop is still missing, as the consumer’s need to prioritize higher-priced food is impeding discretionary spending.”
This data came before Super Saturday, which is the last Saturday before the holidays begin and typically the largest shopping day outside of the Turkey 5. While retailers are expecting a strong finish to holiday shopping, Cohen said consumers have become accustomed to seeing deals since October, so deep discounts will be necessary to make sales.
On Super Saturday, Sensormatic reported that traffic at brick-and-mortar stores was up 0.2% when compared with 2021. Compared with other Saturdays in the month, traffic was up 36% over Dec. 3 and 17% over Dec. 10, respectively.
The retail technology expects more high traffic days to come. Due to the calendar extending the final shopping week, Sensormatic believes Dec. 23 will have the second-most traffic of the season behind Black Friday, while Dec. 21 and 22 will also be in the top 10. For brands and retailers, the final push is on.
Trending in Retail Channels
On the Move has hiring news from Walmart US, Etsy, commercetools and more.
This week, retailers are bringing on C-level talent in areas such as people, operations and transformation. Plus, Kohl’s appoints an activist investor’s choice for CEO, Fanatics taps a former Snap executive for livestream shopping and Etsy brings aboard Facebook’s former general counsel.
Tom Kingsbury was appointed CEO of Kohl’s. Kingsbury was named interim CEO in December upon the resignation of now-Levi’s President Michelle Gass. Now, Kingsbury will have the job on a permanent basis. Kingsbury served as CEO of Burlington Stores from 2008-2019. Kingsbury was nominated by activist investor Macellum Advisors, which was pushing for change at Kohl’s. With Kingsbury’s appointment as CEO, Macellum has agreed to a “multi-year standstill.”
Judy Werthauser was appointed chief people officer at Walmart U.S. Werthauser comes to the teen-focused retailer from Five Below, where she served as EVP and chief experience officer. Over her four-year tenure, the chain grew from about 750 stores to more than 1,300 locations. Werthauser also served on the board of BJ's Wholesale Club, and is now resigning from that position. “I am excited to work alongside the world-class Walmart U.S. team as they bring the purpose of building a better world – helping people live better and renewing the planet while building thriving, resilient communities – to life,” Werthauser wrote in a LinkedIn post.
Mike Brewer was named chief operating officer at Crate & Barrel Holdings, overseeing operations at Crate & Barrel, CB2, Crate & Kids and Hudson Grace. Brewer brings 20 years of experience from Nike, where he served in roles including sourcing, manufacturing and supply chain. Crate & Barrel said Brewer’s appointment was part of the home retailer’s “ongoing efforts to evaluate and alter its structure in ways that help support overall growth.”
Keith Melker. (Courtesy photo)
Keith Melker was appointed chief strategy and transformation officer at JCPenney. Melker comes to the department store retailer from Wehner Multifamily, where he served as CEO. He was also a previous chief strategy officer at the Kimberly-Clark Corporation. Melker will oversee the transformation office, which includes ownership of metrics such as profitable traffic, inventory management, digital growth and strategic partnerships. With this move, Katie Mullen will remain chief strategy officer.
Blaine Trainor is joining ecommerce software provider commercetools as VP of global partnerships and alliances. In the role, Trainor will lead the headless commerce company’s partnerships ecosystem, working with companies including Deloitte, CapGemini, AWS and Google Cloud. Trainor previously served in senior leadership roles at SAP over a 12-year tenure, and also held sales roles at hybris software and Sterling Commerce.
Nick Bell, a former Google and Snap executive, will lead a new livestream shopping division of Fanatics, Footwear News reported. Bell previously led the teams behind Google Search Experience, and served as VP and global head of content and partnerships at Snap Inc. Bell will lead the Fanatics Live division, which will launch a standalone app that is geared toward collectibles.
NIck Bell. (Photo via LinkedIn)
Colin Stretch was appointed chief legal officer at corporate secretary at Etsy, effective Feb. 14. Stretch previously served as general counsel at Facebook from 2013-2019. He then spent two years as leader in residence at Columbia University Law School's Reuben Mark Initiative for Organizational Character & Leadership, and went on to the law firm Latham & Watkins.
"Colin's extensive experience will be critical to Etsy's efforts to ensure we remain a safe and trusted marketplace, broaden our reach across all our brands, and advocate for microbusinesses around the world,” said CEO Josh Silvermann, in a statement.