U.S. shoppers spent a record $34.36 billion on retail websites over the five-day period from Thanksgiving to Cyber Monday, up from $28.49 billion for the same period last year. Digital revenue missed projections as more shoppers heeded retailer warnings to shop earlier to avoid out-of-stock items or shipping delays and took advantage of pre-Thanksgiving discounts.

The usual holiday shopping frenzy during the five-day stretch from Thanksgiving to Cyber Monday—dubbed Cyber 5—looked a bit different this year amid an alarming spike in coronavirus cases that left consumers more comfortable browsing for gifts on retail sites than in crowded stores. It was a huge weekend for ecommerce, with U.S. consumers spending a record $34.36 billion online, up from $28.49 billion for the same period last year, according to data from Adobe Analytics. But digital revenue growth was more subdued than projections anticipated as shoppers took advantage of retailers’ early season promotions to get a jump on holiday buying and shopping fatigue likely set in by Cyber Monday.

Online sales for the long holiday weekend rose 20.6% year over year, according to Adobe figures based on transactions from more than 1 trillion anonymous online visits to retail sites, including 80 of the top 100 retailers in the Digital Commerce 360 Top 1000. That was higher than the 17.7% registered in 2019 but significantly lower than Digital Commerce 360’s estimate of 34.9% growth for Cyber 5 2020 and Adobe’s projected 38.3% for the same period.

Retailers have been encouraging early seasonal shopping for weeks and even months with the goal of spreading out peak-season order volume so as not to inundate overburdened warehouses and shipping carriers that have been operating at or over capacity since the pandemic started. Long-running Black Friday preview deals and “Cyber Days” discounts that were promoted before Thanksgiving softened online sales during the Cyber 5 weekend and cut into gains for big retail days like Cyber Monday.

This is in line with data from a number of sources including Salesforce.com Inc. The technology vendor reported digital revenue grew 29% year over year during what it defines as Cyber Week, which ran from Tuesday, Nov. 24, through Cyber Monday, Nov. 30. That’s in stark contrast to the tepid 10% uptick in online sales Salesforce tracked for Cyber Monday alone. The software provider aggregates data from the activity of more than 1 billion global shoppers flowing through its Commerce Cloud platform and extrapolates its clients’ findings to the broader retail industry.

Yet, even with early shopping diminishing the impact of Cyber 5 sales this season, the holiday weekend had a banner year.

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Cyber Monday still eclipses Black Friday but loses ground

Although Adobe shows Cyber Monday’s digital revenue grew the slowest of all Cyber 5 contenders at just 15.1% year over year, the day still claimed the top spot and raked in a massive $10.84 billion, up from $9.42 billion in 2019. But as expected, Black Friday gained ground on its weekend rival Cyber Monday, jumping 21.6% to $9.03 billion in online sales from $7.43 billion the year before.

Digital revenue on Black Friday increased by $1.60 billion over 2019 versus Cyber Monday’s $1.42 billion gain, according to Adobe, leaving Black Friday closer to closing the gap on its competitor. Cyber Monday still accounted for nearly one-third—31.5%—of the five-day period’s collective online spending but dropped from a 33.1% share in 2019. Meanwhile, Black Friday represented a greater share of Cyber 5 sales this year at 26.3% than last year’s 26.1%.

Historically, Black Friday was a store-centric retail sales holiday, with consumers braving jam-packed aisles and waiting in long lines to nab doorbusters. Every year, retail chains have extended more Black Friday sales to consumers buying online, and the trend was magnified this year as merchants sought to discourage brick-and-mortar crowds and adhere to store capacity restrictions during the pandemic. Traffic to stores on Black Friday was cut in half this year, according to Coresight Research, while for the first time, the number of online shoppers on Black Friday exceeded 100 million, up 8% from 2019, according to a National Retail Federation survey of 6,615 consumers conducted over Cyber 5 by research firm Prosper Insights & Analytics.

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According to Adobe, the fastest-growing Cyber 5 day was Saturday, Nov. 28, coined Small Business Saturday a decade ago in a campaign to boost spending with independent merchants. 77% of holiday shoppers said they were more interested in supporting small, local businesses struggling during the pandemic this year, according to the NRF and Prosper survey, and that consumer sentiment was reflected in spending patterns for the day.

Small Business Saturday logged 68.2 million online shoppers, up 17% from the same day in 2019 with a gain of nearly 10 million consumers, NRF says. And overall digital revenue spiked 30.2% year over year, to $4.68 billion from $3.60 billion the prior year, according to Adobe data. Online sales for smaller retailers—or those with $10 million-$50 million in annual revenue—grew by 294% on Saturday compared with an average day in October.

Of all Cyber 5 days, Small Business Saturday increased its share of weekend online sales by the greatest amount, up 1 percentage point to 13.6% this year from 12.6% in 2019, according to Adobe.

Consumers continue to shift buying online

As anticipated, consumers shifted a lot of shopping to the web, skipping holiday weekend store visits entirely or opting for omnichannel services that limited their exposure to others.

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57% of holiday shoppers reported shopping more online specifically because of the pandemic, according to the NRF and Prosper survey—an enormous cohort of consumers that adjusted their buying patterns. Online-only shoppers increased by 44% year over year for the Cyber 5 period, reaching 95.7 million, while just over 40 million consumers shopped solely in stores. But an additional group of more than 50 million consumers shopped across both channels.

Many of the latter were likely shoppers who took advantage of curbside pickup, drive-through and buy online pick up in store offerings, which has soared in popularity during the coronavirus outbreak. Online orders fulfilled via buy online pick up in store or curbside pickup jumped 52% year over year on Black Friday, according to Adobe. And on Cyber Monday, curbside pickup sales grew 30% year over year, Adobe says. During Cyber Week, retailers with those pickup options increased digital revenue by 32% more year over year than retailers without omnichannel services, according to Salesforce.

Omnichannel orders will only ramp up as the holidays near and consumers worry about receiving gifts on time.

Shoppers heed warnings about package delays and out-of-stock items

For years, retailers have aimed to “smooth out” peak-season sales to ease the holiday strain on ecommerce sites and fulfillment operations as well as level out revenue. But they hadn’t managed to make a ton of headway—until COVID-19 hit, ramping up the urgency for both merchants and shoppers.

Retailers have made a concerted effort to manage consumer expectations around product availability and potential shipping delays for the holidays in an unconventional year where inventory can be hard to come by and carriers have been pushed to maximum capacity trying to keep up with massive ecommerce surges, according to NRF. And that’s been the case across merchant types and categories, including general merchandise sellers, luxury retailers, specialty apparel, department stores and others.

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Digital Commerce 360 also has tracked many of these initiatives. Costco Wholesale Corp., No. 16 in the Top 1000, has linked a homepage banner to a message from its president CEO Craig Jelinek about delivery delays for weeks now: “This holiday season, online shopping and shipping volumes are expected to be at an all-time high. As a result, small parcel delivery delays are expected. We encourage you to shop early this year to ensure that your small parcel items arrive on time.”

The discount merchandiser assures warehouse members that it’s working with carriers to forecast daily holiday shopping volume and give customers accurate delivery time estimates before they place their orders, displaying updates on Costco.com and providing easy access to order tracking information.

Beauty brand Tarte Cosmetics, which is owned by Kose Corp. (No. 190 in the Digital Commerce 360 Asia 300), also offers its customers a disclaimer on shipping delays: “Heads up, tartelette! Due to high order volume & extra precautions at our warehouse, your package might be delayed getting to you. We’re working to get your order to you ASAP & will send you an email with tracking information as soon as it ships!”

Jewelry retailer Jared, which is owned by Signet Jewelers Ltd. (No. 80), added a message to its shipping page to warn shoppers that they need to order early: “Due to the current situation with COVID-19, you may experience shipping delays.” There is a Christmas shipping and delivery chart with specific order deadlines for holiday arrival for a variety of items.

Apparel brand The North Face, which is owned by VF Corp. (No. 44), is even blunter on its homepage: “Best way to get gifts on time? Shop early. This year, shopping early is a must. Get first pick of gear (and avoid shipping delays) by ordering ASAP.”

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Many other online retailers—including Shutterfly Inc. (No. 51), UncommonGoods LLC (No. 879), Sears Holdings Corp. (No. 41) and Pottery Barn (parent Williams-Sonoma Inc. is No. 25)—have highlighted similar language on their sites or in email messaging in the past month or two, and these reminders have successfully nudged consumers to get an earlier start on their holiday shopping this season.

“[Retailers] are trying to sensitize their customers to the changed environment, and consumers are responding to the messaging and evolving their behavior,” says Matthew Shay, NRF president and CEO. “People have been sensitized based both on the messages that have been out there but also on past experiences when, in the early days of the pandemic, there were stock-outs, and retailers were chasing inventory in some categories. And people are responding because they generally are aware of the possibility that, if they wait too long, they’re not going to be able to find what they’re looking for.”

Earlier promotions push shoppers to buy ahead of Cyber 5

42% of shoppers said they will shop earlier knowing that holiday delivery times may be longer this year, according to a Digital Commerce 360 and Bizrate Insights survey of 1,000 consumers in September 2020. While messaging around shipping delays has resonated and appealing to shopper anxiety over out-of-stock items seemed to be effective, retailers also incentivized early online buying in a big way with sizable pre-Thanksgiving discounts.

The holiday season extended back into October “more dramatically than ever,” Shay says. And more than half of all holiday shoppers—over 52%—said they took advantage of early seasonal sales, according to the NRF and Prosper survey.

There were plenty of promotions to choose from. On Oct. 13, nearly a quarter—24%—of the top 100 online retailers ranked in the Top 1000 promoted holiday shopping on their sites to kick off peak season, according to an analysis of data collected by Digital Commerce 360 researchers during site visits. That was roughly six weeks before Cyber 5 and more than two months before Christmas.

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What’s more, 51% of the top 100 retailers offered widespread sales that day beyond normal promotions that are run year-round to compete with Amazon.com Inc.’s delayed Prime Day sales event. Plus, the deep discounts urged consumers to get a jump on holiday shopping. By Nov. 23, 76% of the top 50 retailers in the Top 1000 offered Black Friday deals—four days before the actual retail holiday.

The early push worked. For Nov.1-Nov. 19, digital revenue increased a notable 29% over the same time frame in 2019, according to Adobe. And online sales early in the week of Thanksgiving grew at an impressive rate for non-traditional retail days: 72% year over year on Tuesday, Nov. 24, and 48% on Wednesday, Nov. 25, according to Salesforce data.

“Heavy discounts and aggressive promotions starting in early November succeeded at getting consumers to open their wallets earlier,” says Taylor Schreiner, director of Adobe Digital Insights.

Big-box retailers outperform department stores during Cyber 5

For the Cyber 5 period, Etsy Inc. (No. 18 in the list of Digital Commerce 360 Top 100 Marketplaces) was the big winner analyzed by digital commerce intelligence company Edison Trends. The marketplace for sellers of handcrafted goods capitalized on recent consumer commitment to shop small during the holiday and built on its year of remarkable growth, when the total value of goods sold on Etsy.com (excluding the acquired Reverb marketplace for musical instruments and gear) ballooned by about 90.6% for the first nine months of 2020 versus 2019. During Cyber 5, Etsy more than doubled its online revenue with a 115% year-over-year hike—nearly four times the 30% growth for second-place Amazon (No. 1) during the same time frame, according to Edison.

The collective year-over-year increase in web sales for the two leaders plus Walmart Inc. (No. 3), Best Buy Co. Inc. (No. 10), Target Corp. (No. 12) and eBay Inc. (No. 5 in the marketplaces rankings) was 24% for Cyber 5, according to Edison. That gels with the overall market’s 20.6% growth for Cyber 5, which makes sense as the performances of the largest players have a disproportionate pull.

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Department stores, which have struggled mightily during the pandemic, didn’t fare as well. Edison analyzed data on Nordstrom Inc. (No. 18), Kohl’s Corp. (No. 21), Macy’s Inc. (No. 14) and J.C. Penney Co. Inc. (No. 31) and found this group’s combined online sales dropped 5% during Cyber 5 when compared with the prior year. Nordstrom and Macy’s were the only retailers with an increase in digital revenue, growing sales a modest 6% and 4%, respectively, over the same period in 2019. Edison’s data is based on e-receipts from more than 890,000 online transactions accessed through the email of U.S. consumers.

Amazon sellers’ strong showing

Amazon reported a record-breaking holiday season to date, although the retailer did not disclose overall sales or growth for the period. The web giant debuted its “Black Friday-worthy” daily promotions on Oct. 15-16 in the U.S. with the Holiday Dash deals event, right after its postponed annual Prime Day sale that took place over Oct. 13-14. In fact, 62% of shoppers said they bought holiday gifts during Prime Day this year, and 7% of respondents reported all of their Prime Day purchases were holiday presents, according to a Digital Commerce 360 survey of 530 shoppers in October. And Amazon also announced a “Black Friday Deals Week” with “tens of thousands” of deals and low prices on top gifts that ran from Friday, Nov. 20, through Black Friday, which certainly tempted shoppers to check off their gift lists before Thanksgiving.

Additionally, the retailer’s extended return window this year—which allows items shipped between Oct. 1 and Dec. 31 to be eligible for a return through Jan. 31, 2021—helped convince shoppers who were hesitant to buy an item too far in advance of the holidays. But while consumers shopped earlier this year, Amazon says there was still strong demand over Cyber 5.

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Amazon attributed much of its success for the five-day period to consumers’ desire to support small businesses that have been hard hit during the pandemic. Independent retailers selling on Amazon—which the company says are nearly all small to medium-sized businesses—had their best-ever Black Friday and Cyber Monday. Third-party marketplace sellers surpassed $4.8 billion in worldwide sales from Black Friday through Cyber Monday, a more than 60% year-over-year increase from the same holiday weekend in 2019, according to Amazon. More than 71,000 small to medium-sized retailers globally have crossed $100,000 in sales on the platform so far this season, and small to medium-sized businesses in the U.S. have sold an average of 9,500 products per minute on Amazon.com during the same period.

 

 

Percentage changes may not align exactly with dollar figures due to rounding.

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