Ecommerce once again was the beneficiary of a raging pandemic as holiday shoppers increasingly turned to the web instead of crowded stores to order gifts in November, new U.S. Department of Commerce data shows. U.S. nonstore sales grew at a record year-over-year rate for the month, nearly reaching the all-time monthly high, which peaked in June.
Last month, consumer spending through nonstore channels grew 31.3% over November 2019, according to a Digital Commerce 360 analysis of the Commerce Department’s advance monthly figures released Wednesday. Numbers exclude estimated fuel sales. That’s the second-highest rate of any month since the agency began publishing data in 1992, falling behind only June 2020, when nonstore sales grew 31.5% year over year. It also marks the highest-ever growth registered for the month of November and is more than 10 percentage points higher than the runner-up in November 1993 at 21.0%.
Nonstore’s dramatic performance last month is in stark contrast to November 2019, when sales grew just 4.9% year over year. The exceptionally low growth was largely because Cyber Monday fell in December last year, pushing gains from the largest online shopping day of the year into another month while November 2018 captured the retail holiday.
COVID-19 has spurred seismic shifts in buying behavior this year as consumers have avoided stores and shopped online, causing ecommerce sales to skyrocket. Nonstore sales growth has been elevated for the majority of 2020. In fact, the top five monthly year-over-year growth rates ever recorded all fell in 2020, and, what’s more, eight of the top 10 were registered this year. Nonstore growth steadily increased each month through the first half of 2020, nearly quadrupling from January to June. Since then, growth had tapered off a bit before spiking again in more recent months. November’s 31.3% jump was notably higher than October’s 26.3% rise despite the bump the latter received from a delayed Prime Day, the annual Amazon.com Inc. sales event.
The Commerce Department’s nonstore sales—which are mainly online but include other sales such as orders through call centers, catalogs, door-to-door visits and vending machines—don’t align perfectly with spending accounted for in the pure ecommerce figures that the agency releases quarterly. But the data is an early indicator of trends in the online sector. Digital Commerce 360 analyzes non-seasonally adjusted Commerce Department numbers.
Figures from Adobe Analytics, the data insights arm of software company Adobe Inc., are in line with Commerce Department data. For the month of November, ecommerce sales received a 27.7% year-over-year boost, according to the firm.
Adobe’s data is based on transactions from more than one trillion anonymous online visits to retail sites, including 80 of the top 100 retailers in the Digital Commerce 360 Top 1000, and covers more than 100 million SKUs. Data is based on a variety of product categories including apparel, electronics, home, grocery, appliance, personal care, office supplies, books, jewelry, furniture and toys, among others.
November nonstore numbers were bolstered by strong digital spending during Cyber 5, the five-day stretch from Thanksgiving to Cyber Monday. While online sales growth was more subdued than projections anticipated as shoppers took advantage of retailers’ early season promotions prior to the retail holiday weekend, spending still increased 20.6% year over year, according to Adobe. Cyber Monday raked in an astounding $10.84 billion in digital revenue, up 15.1% from $9.42 billion in 2019. Black Friday traditionally has been a store-focused, doorbuster sales day, but this year, retailers spent more energy pushing consumers online to discourage large, public gatherings during the pandemic. The recalibration was reflected in Black Friday’s online sales, which jumped 21.6% to $9.03 billion from $7.43 billion the year before.
Nonstore sales drive November retail gains
November’s retail performance was fueled by gains in the online sector. Growth in the nonstore channel accounted for more than three-quarters—75.3%—of all retail gains for the month after representing just over half—51.0%—of total retail gains in October.
Total retail sales through all channels for Digital Commerce 360-defined segments again increased year over year for the seventh-straight month after taking a nosedive in April, when most stores were closed. But growth has continued to slow, down to 8.9% in November from October’s more robust 10.7% and September’s 13.4% peak.
Despite the deceleration in November’s year-over-year growth from the earlier fall showing, it still is the highest-ever recorded rate for the month and more than six times higher than the 1.4% growth registered in November 2019.
Digital Commerce 360’s calculation of total retail sales—which excludes sales in segments that don’t typically sell online such as restaurants, bars, automobile dealers, gas stations and fuel dealers—differs from overall Commerce Department data as many omitted categories are among those hardest hit during the coronavirus.
The National Retail Federation is expecting “a strong holiday season” compared with last year.
“As we go into the final weeks of 2020, year-over-year trends show spending is holding up well regardless of month-to-month fluctuations,” says Jack Kleinhenz, chief economist at the National Retail Federation. “Nonetheless, we have to remember the remainder of the holiday season depends critically on the virus. We are optimistic, but spending could shift into a lower gear if the virus continues to spread.”
Year-to-date retail figures suggest impressive 2020 performance
So far, so good in December—at least for online sales. From Dec. 1-Dec. 9, digital spending increased “a massive” 48.8% year over year, according to Adobe data. The firm attributes the uptick in demand to shoppers hurrying to complete gift buying ahead of online retailers’ free standard shipping cutoff, which was bumped up in response to strained shipping carriers that have been severely over capacity with the influx of ecommerce orders amid the pandemic.
For the season-to-date period spanning Nov. 1-Dec. 9, ecommerce sales grew 32.6%, Adobe says. The firm is predicting U.S. online holiday sales will jump at least 30% over the November-December 2019 season. Early Digital Commerce 360 forecasts estimate online holiday growth will be an even more optimistic 43.3%.
Seasonal data and year-to-date Commerce Department figures suggest current trends bode well for a particularly remarkable end to the year. Nonstore sales for the year through November grew 24.0% versus the same 11 months in 2019—the highest-ever recorded rate for the period and substantially higher than 13.9% growth last year. And total retail through all channels rose 6.8% through November—the third-highest growth for the period and nearly double the 3.7% registered during the same time frame in a pandemic-free 2019. Unsurprisingly, nonstore gains accounted for 70.2% of all retail growth for the first 11 months of 2020.