Study: Prices not lowest on Black Friday and Cyber Monday
Solon, Ohio — Black Friday and Cyber Monday does not always mean lower prices, according to a study by ECRM Analytics that examines Black Friday and Cyber Monday promotions. The analysis exposes many common misconceptions around these two important shopping days.
ECRM found that when comparing Black Friday deals to other times throughout the year, it is apparent that holiday prices are not always the lowest, with leading retailers promoting higher prices than previously advertised on toys and consumer electronics.
In other findings, overall, promotional trade spend for Black Friday was down 15% for 2012 compared with 2011, with many retailers strategically shifting their focus to social and mobile. A substantial growth in mobile applications from both retailers and third parties tries to bring some clarity, but inaccurate data and tedious functionality frustrate the consumer resulting in lost opportunities. With social media, the conversation can easily lose focus and the intended message becomes unclear.
This hyper competitive environment is confusing the consumer and impacting sales negatively, according to ECRM. For a more in-depth look at ECRM’s findings, as well as other category and seasonal reviews, click here.
Online shopping continues to set records
Through the first 30 days of the holiday season online sales have surpassed $20 billion with several days last week above the $1 billion mark.
For the holiday season-to-date, $20.4 billion has been spent online, marking a 15% increase versus the corresponding days last year, according to the online measurement firm comScore. Last week saw three individual days eclipse $1 billion in spending, led by Cyber Monday, which became the heaviest online spending day on record at $1.46 billion. Tuesday, November 27 reached $1.26 billion, while Wednesday, November 28 reached $1.11 billion. Monday and Tuesday of this past week currently rank as the two heaviest online spending days in history, with the Tuesday total slightly outpacing that of Cyber Monday 2011.
"Cyber Monday kicked off Cyber Week with a record spending total of $1.46 billion, but the ‘sugar high’ appears to be somewhat short-lived," said comScore chairman Gian Fulgoni. "While we still saw three billion dollar days this week, growth rates dampened following the peak demand of the Thanksgiving-to-Cyber Monday promotional period. This is a similar pattern to what we observed last year. In addition, unseasonably warm weather throughout many parts of the country may have given consumers some added impetus to shop in-store rather than rely on online shopping."
To no one’s surprise, free shipping remains an important driver on online holiday spending with more than half of e-commerce transactions during each of the past three weeks involving free shipping. Transaction involving free shipping reached a peak of 57% during the week ended Sunday, November 25. During the first five weeks of the holiday season, consumers spent an average of 42% more on free shipping transactions than on paid shipping transactions, including a 51% higher average order value during the week ending November 25, according to comScore.
"Though retailers must often sacrifice margins when they provide free shipping, they benefit because consumers tend to spend significantly more on those transactions," Fulgoni said. "Consumers may either be responding to the minimum spending thresholds needed in order to receive free shipping, or figure that as long as they know they’re receiving free shipping it might be worth adding another item or two to their shopping basket."
Other insights shared by the firm at the halfway point of the season relate to increasing adoption of smartphones and tablets as a sales driver in key categories. For example, the top gaining category for the season-to-date is digital content and subscriptions, which includes digital book, music and video downloads, which has grown 25% versus year ago. The consumer electronics category, despite softening growth in flat panel TV sales, ranks fourth at 17% growth, largely on the strength of smartphone sales. The computer hardware category is seeing gains of 15% on the strength of tablet sales, despite traditional laptop and desktop computers posting more modest gains. Other categories currently performing well include Toys, up 21%, consumer packaged goods, up 18% and video game consoles and accessories, up 16%.
Nordstrom re-inventing Los Angeles area real estate
SEATTLE — Nordstrom is relocating its full-line store located at South Bay Galleria three miles south to a two-level, 138,000-sq.-ft. location at the Del Amo Fashion Center that will open in 2015.
"We feel fortunate that we’ve been able to serve South Bay for nearly 30 years and are excited about this chance to bring a better store to our loyal customers here," said Erik Nordstrom, president of stores for Nordstrom. "While we’re grateful for the business we’ve been able to do at South Bay Galleria over the years, we feel relocating gives us our best chance to deliver a more compelling shopping experience. We look forward to working with Simon and being part of this terrific redevelopment at Del Amo so that we can continue taking care of our South Bay area customers for many years to come."
Nordstrom’s decision to relocate is part of a larger undertaking by Simon Property Group, owner of the iconic super regional mall that serves the upscale South Bay market of greater Los Angeles. Simon Property Group, which currently owns or has an interest in 331 retail real estate properties in North America and Asia, will launch a comprehensive transformational redevelopment of Del Amo Fashion Center, one of the most recognized and successful enclosed shopping malls in the United States. Upgrades are expected to take two years.
"Today’s announcement by Nordstrom that they will be relocating to Del Amo Fashion Center as a part of our redevelopment is consistent with our objective to create dynamic retail environments for our retailers and customers," said David Contis, president of Simon’s Mall Platform. "We expect to expand the trade area of Del Amo Fashion Center and solidify its reputation as one of the nation’s most successful malls."
The redevelopment will begin in spring 2013 by replacing the existing food court with a transformed garden-inspired dining area and renovating the interior of a portion of the north mall, which will be completed by holiday 2013.
Starting in early 2014, the redevelopment will include the demolition of the remaining portion of the original north mall, replacing it with a new state of the art two-level mall to connect the existing Macy’s women’s store with the new Nordstrom store (to be located near the intersection of Hawthorne Blvd. and Fashion Way).
The redevelopment will also include enhancements to the ambience of the outdoor lifestyle village, the addition of a 1,800 car parking garage, planting of lush landscaping, upgraded parking throughout the entire mall property, new identity and informational signage and improvements to facilitate customer circulation in and around the property. Completion of this work will be timed with the grand opening of Nordstrom in 2015.