Inflation fuels holiday online sales to record $204 billion: Adobe

A worker moves boxes of goods to be scanned and sent to delivery trucks during Cyber ​​Monday operations at Amazon’s fulfillment center in Robbinsville, New Jersey on November 29, 2021.

Mike Segar | Reuters

Online sales during the holiday season rose nearly 9% to a record $204.5 billion, Adobe Analytics said on Wednesday, as consumers opened their wallets to buy gifts for the family, friends and for themselves.

But the surge in sales was driven, in part, by higher prices for products ranging from clothing to groceries to home appliances, said Adobe, which analyzes 1 trillion visits to consumer websites. retailers.

Online prices rose 3.1% in December from a year earlier and were up 0.8% month-over-month. This marked the 20th consecutive month of online inflation on an annual basis, and followed a record year-over-year price surge of 3.5% in November, Adobe said.

“It’s certainly a key contributor to growth, but it’s not all of the growth,” Vivek Pandya, principal analyst at Adobe Digital Insights, said of the continued inflation. “There is an innate level of growth in overall retail sales…and we see inflation as one of the explanatory factors.”

Consumers also shopped in more expensive categories, such as jewelry, which could be another contributing factor to the growth in retail sales, he noted.

Rise in out-of-stock items

And sales could have been even higher if consumers hadn’t found so many out-of-stock items online. Retailers have overcome supply chain hurdles in recent months, leaving shipments of goods delayed during key shopping days. Companies are also grappling with how to handle a new outbreak of Covid cases in the United States, fueled by the highly contagious variant of omicron, which has left many of their workers sick and sidelined.

Clothing companies Lululemon and Abercrombie & Fitch said this week that their fiscal fourth-quarter sales would be lower than expected due to some of these constraints. Urban Outfitters said it struggled to keep an assortment of homewares in stock, when it could use air freight to bring in clothes from overseas.

Consumers saw more than 6 billion out-of-stock messages on retailer websites during the holiday season, which runs from Nov. 1 to Dec. 31, according to Adobe. That’s a 10% increase from the previous year’s levels and 253% from the 2019 holiday season, Adobe said.

Yet the out-of-stock messages might have simply driven consumers to other retailers’ websites in search of wanted products.

“The thing online is you have a little more flexibility of choice, where if an item is out of stock on one site, you can open another browser window and check another site,” said Pandya said.

A separate Salesforce analysis found that retailers’ holiday inventory was down 2% from 2020 levels due to ongoing supply chain issues.

Shoppers find fewer discounts

As retailers faced higher prices on everything from shipping to labor and stock levels were tight across many categories, it also meant discounts were vastly less prevalent this holiday season. . Electronics markdowns averaged 8%, down from 21% in 2020, Adobe found. Sporting goods were down 6% from 14% a year ago. However, consumers saw bigger promotions for clothes and toys.

The cadence of purchases has also shifted over the past holiday season. Retailers were touting Black Friday-like deals as early as October, hoping to spread sales amid supply chain pressures and avoid running into a last-minute race among consumers for freebies.

In the weeks leading up to Thanksgiving, Nov. 1-24, online sales grew 19.2% year-over-year, Adobe said. In the five days between Thanksgiving and Cyber ​​Monday, sales fell 1.4%, he said. And from Nov. 30 to Dec. 31, web sales rose 5.6% from year-ago levels as procrastinators sought last-minute options and shoppers redeemed their gift cards in the days after Christmas.

But some consumers started even earlier, in October. Data from Placer.ai showed visits to Best Buy stores in the US rose 10.2% that month from 2019 levels, while they were up 16.7% at Target and 14.7% at Dick’s Sporting Goods.

Meanwhile, Black Friday – the day after Thanksgiving – has lost its luster as the day shoppers flock to malls before sunrise looking door-to-door.

Placer.ai-tracked shopper visits to department stores on Black Friday fell across the board from 2019. Traffic at Macy’s fell 18%, while visits to Nordstrom were down 18.6 %, did he declare. Traffic to Neiman Marcus fell 20.3%, Kohl’s fell 23.1% and Dillard’s fell 27.3%, according to Placer.ai.

The National Retail Federation, the retail industry’s leading trade group, is set to release its much-anticipated final holiday sales results on Friday.


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David A. Albanese