Author: NetElixirFounder

I run NetElixir - a global digital marketing firm that empowers eCommerce growth for hundreds of leading retail and b2b eCommerce businesses worldwide through empathy, insights and, innovation. I am deeply passionate about retail eCommerce and online shopper behavior research. Through my personal blog, I hope to share key findings and insights from NetElixir Retail Intelligence Lab's ongoing research.

Why didn’t online shoppers buy as much as expected during Cyber 5, 2020

Cyber 5 is widely considered the most important 5 day stretch for online shopping in the US. These 5 days have accounted for 12%-16% of total online holiday sales (November 1- December 24) every year since Thanksgiving Day started becoming an important online shopping day (around 2013, largely driven by the rapidly increasing popularity of smart phone adoption). This year’s Cyber 5 was different. Online sales during Cyber 5 were lower than what every research firm had forecasted (including, my firm, NetElixir).

NetElixir Retail Intelligence Lab Forecast, 11/11/2020
Actual Cyber 5 eCommerce Sales Increase, %Y/Y

25.6% Y/Y growth in online sales may seem like a strong growth number. However, when we apply the context of in-store sales decline during this period (https://www.cnbc.com/2020/11/28/black-friday-traffic-in-stores-craters-52percent-during-pandemic.html), they look a lot less impressive. The total retail sales in the US are likely to either remain flat Y/Y on even experience a slight decline.

So, what happened? Why aren’t Americans buying as much?

There maybe multiple factors at play here. I wanted to highlight a few of them.

  • Many experts had thought Prime Day may kick start holiday shopping early this year. Our research shows that this did not happen. There was a sales slump post Prime Day that continued until the election week. Looking back, it is not clear if Prime Day in October actually cannibalized some of the Cyber 5 sales. (In any case, it helped Amazon grow its share of US Online sales).
  • A slow Cyber 5 may also indicate the setting in of shopping fatigue. 10 months of restricted activity has led to fewer purchase options for shoppers (how many home decor items and DIY tools can you continue buying?). Also, predictions of a dire winter are not helping spruce up the “holiday shopping mood”.
  • Even though the Cyber 5 sales have been slow, the post Cyber Monday sales have been strong. Below is a chart comparing 14 day sales trends until 4 days after Cyber Monday. This maybe a result of fast approaching shipping cut off dates (for on-time delivery for holidays).

The remainder of the holiday season will most likely see even greater level of uncertainty due to product stock outs and shipping restrictions and (unfortunately) the rapid increase in number of active cases. The Y/Y ecommerce sales growth in December may get restricted to 13% Y/Y thereby limiting total online sales growth during Nov-Dec 2020 to 19% Y/Y. I must admit that this is one forecast where I hope I am being too conservative.

Why this blog?

These are unprecedented times. The ongoing coronavirus pandemic has caused havoc around the world. Everyone and everything has been impacted. There was has been widespread disruption across industries. Retail eCommerce, the industry that we have been an active part of for almost 17 years, has changed dramatically. The graph below shows the impact on ecommerce due to the pandemic – 10 years’ growth in 3 months!

At NetElixir Retail Intelligence Lab we started aggregating real time ecommerce sales and online shopper behavior data in February 2020. Being the ecommerce growth partner for 120+ retailers in the US, we found ourselves right in the middle of all action. The massive ecommerce sales spikes, the flooding in of new to online shoppers, the frequent product inventory outages and shipping delays caused by highly unpredictable demand… we witnessed everything first hand. We also saw massive shifts in online consumer behavior – website visitors purchasing a lot quicker than normal, the types of purchases made by first time shoppers, the shifting of consumer product preferences as the pandemic dragged on, the emergence of mobile phones as the primary online purchase device… the list is long and fascinating.

We started sharing the key insights and trends through our bi-weekly webinars and often invited retail industry leaders to share their observations with our clients and partners. You can view the webinar videos here – https://www.netelixir.com/university/on-demand-webinars/. I am sure you will be as fascinated as we all have been to observe the trend shifts as you browse through the webinar videos chronologically. We have also been publishing regular insights on our company blog – https://www.netelixir.com/blog.

Through my blogposts here my attempt is to dive deeper into the data insights and ask WHY. I will try to not just share my point of view but also invite some of my friends from the retail industry and academia to share their points of view as well. These are truly unprecedented times.. there are many micro-trends that are underway in every sphere of life. It is important to not just identify these but also discuss the underlying forces that maybe driving these trends and debate about the future implications that they may have on retail, ecommerce and online shopper behavior.

I am writing this first post 2 days prior to the Thanksgiving Day. Unfortunately, Thanksgiving celebrations will be muted due to the pandemic restrictions. It is my belief that this year, Thanksgiving will grow in importance as an online shopping day. Our analysis for 2019, shows that 13% of all Cyber 5 (Thanksgiving Day to Cyber Monday) ecommerce sales happened on Thanksgiving. We believe this year, that may well exceed 15% of total Cyber 5 ecommerce sales. Why will this shift happen and what does it mean for retailers? What are the underlying forces that are driving this shift? Through my next blogpost, I will try to address some of these questions and more.

Wish you and yours a Happy Thanksgiving!

Udayan Bose