People love to buy but hate to be sold. Unless we make it super convenient

This is my look into the Black Friday - Cyber Monday weekend, the trend of its sales, how online is contributing, and what it could all lead to. 

Tis the Season for Shopping

Wall street and many economic figures look to the Black Friday to Cyber Monday weekend as a way to judge the health of the retail segment. And maybe for good reason. For many retailers, sales between Black Friday and Christmas account for 30-40% of their annual revenue. 

This year was the first year I participated in the online portion of Black Friday. I could not believe the deals that companies were throwing out. I think from here on out, anything I ever want to buy, I will just wait until this time of year. Its like betting on the stock market, which not even Mr Buffet himself does it, or recommends it. But bet the house on the greatest retailer insider tip that's guaranteed to hit every year - the Black Friday to Cyber Monday special. This phenomenon doesn't seem to be slowing down either. 

Walking to the store or e-Shopping?

The National Retail Federation expects online and in-store sales in November and December to increase as much as 4.8% to $720.89 billion compared with the same period in 2017. Now that is total revenue. It got me thinking what the split was between online and in-store sales. Had the gap been increasing, fluctuating? Are people preferring the convenience of just getting it shipped to their homes? According to RetailNext and their handy spy-cam analysis of in-store customers, the foot traffic rate has been declining the past 5 years, with a 7% drop compared to last year. ShopperTrak was a little less grim with their reports, noting a 1.7% decrease in foot traffic. So revenue continues to increase, but people are buying less from stores. So it should mean that people are buying more online right?

Well... yes and no.

Why not both?

Statista is a pretty neat company that I've come across, and they do a great job of highlighting key data and not only making it accessible to the public but making it easy to read. Below, you will find a breakdown of how shoppers came about their Black Friday to Cyber Monday deals:

We live in an information age and people are taking advantage of their resources (namely the internet) and using it as part of a way to transact and score some awesome deals. 84% of all shoppers were aided by online in some shape or form, and the trend is only continuing to rise within the last several years. 

The graph below shows sales (in $billions) since 2005, where online has grown by $52.7 billion since 2005. 

And more recently, in pure volume numbers, online has surpassed in-store revenue figures this past year:

Read between the lines

An interesting point to consider is as consumers we have demanded convenience, and retailers have responded by blurring the lines between physical and digital. For example, Amazon, which has created the greatest online marketplace, is now opening up stores (granted, some might not have any cashiers). Wal-mart is trying to take a page out of Amazon's books and is continually investing more in its online model, offering competitive shipping and acquiring some of the fastest growing e-Commerce companies like Jet.com. They also offer a Buy Online Pickup In Store service that continues to increase in popularity. 

Which all leads me to believe that this has commanded retailers to meet their consumers where they are. Some people like the pure convenience of purchasing online, but as Statista shows in their graphs above, although we are becoming more comfortable shopping online, we still use both the in-store and online as a combination to the consumer path to purchase, and retailers are offering services that combine the two. 

From Clicks to Bricks and a Pickup on Aisle 4 - BOPIS

Does that retailer have BOPIS? Its a handy little acronym which has been created due to the popularity of retailers offering Buy Online Pickup In Store options. Adobe Systems tracks thousands of retailers and their online traffic, and they have provided us with figures such as BOPIS increasing 73% compared to last year's consumer shopping channels. 

This is huge trend to follow, as the International Council of Shopping Centers reports that consumers that take advantage of a BOPIS service end up making an in-store purchase 64% of the time while picking up their item! Cyber Monday, the world's largest online shopping day in North America ($7.9 billion in sales this year) also reports that their consumers had a 65% increase in purchasing something additional in-store. Make it easy for the consumer, earn their business, and they will pay you back for it (close to 65% of the time apparently).

The pocket marketing platform

Big box stores are beginning to recognize the power of being able to connect the consumer's buying experience through a marketing platform that sits in their pocket 99% of the time, and it seems to be working. Mobile purchases continue to increase in popularity, and this last year over 50% of online shopping activity came from mobile devices for the first time ever (54.3% to be exact). Direct revenue attributed to mobile online shopping was pegged at 35.9% of total revenue, up 18.9% compared to 2017 numbers. 

Retailers are combating margin compression by following the consumer online, and creating a convenient experience for their shoppers, one that is able to follow them from the point of purchase right to their pocket. Numbers continue to increase, sales continue to explode, and retailers continue to get creative to meet our exceedingly high consumer expectations. In order to meet demand, many stores are looking to fill the gaps through digital mediums that ensure that the consumer can purchase a product or service whenever they so choose. But even though we are continuing to demand this type of convenience of shopping on our own terms, Adobe Systems reports that only retailers with over a billion in sales revenue are taking advantage of this omni-channel approach, where they have sophisticated technology that can convert browsers into buyers. 

So who is going to win the race?

My answer - the one that makes it easiest for us. As humans we are programmed to take the path of least resistance. If there is an option to end our purchase, we will take it. But the same holds true for going through with our purchase. If we leave the store, but then get emailed a coupon to get 50% off at home and all I have to do is click a couple of buttons online... well I'll feel bad NOT taking advantage of the offer. If I hate paying for shipping, but the store gives me the option of FREE shipping to their physical location, I'll do it to save a couple bucks. But as the studies show us, the money I end up saving on the shipping I often use to make an additional purchase when I pick up my product in store.

Whoever offers the customer the most convenient path to purchase, the path of least resistance, will ultimately win the consumer's business.

Bonus Black Friday Coverage - It's no longer an American shopping phenomenon

Black Friday has now risen to international fame. Below you can see some of the most avid international shoppers and how keen they are to take advantage of some of the best deals around: