Data Drivers

First, Data: Delving Into The Real Deal Of Transactions

Turkey Day has come and gone. Cyber Monday is a memory. Consumer spending was robust through the holiday, as our latest Data Drivers dissects, with Rishi Chhabra, VP of Information and Analytics at First Data, weighing in on what the firm saw across a million merchants.

What to make of the latest holiday kickoff, the one that began with a day filled with turkey and ended with a frenzy of clicks and shopping carts to beat what otherwise might be a case of the normal Monday blues?

In the latest episode of PYMNTS’ Data Drivers, Karen Webster and Rishi Chhabra, vice president of information and analytics at First Data, weighed in on what drove growth, and what didn’t, during the long holiday shopping season that just passed.

On the heels of Black Friday and Cyber Monday, the difference in First Data’s data, as Webster noted, is that the First Data data is actual transaction activity. The data comes from people shopping across at least 1 million merchants who have been doing business with First Data for at least 13 consecutive months.

Data Point Number One (But A Twofer): 9 Percent And 5.8 Percent

Consider this a twofer. The 9 percent is year-over-year growth of retail sales from Thanksgiving to Black Friday, and the 5.8 percent is Black Friday to Cyber Monday. “This is real data,” said Chhabra, stemming “from consumers swiping their credit and debit cards, and prepaid cards, all sorts of electronic payments” across all types of locations. “We saw robust growth in consumer spending from Thursday to Friday” and across each of the days in the weekend into Cyber Monday.

The year-on-year momentum, he said, covered brick-and-mortar retailers, as well as online eCommerce shopping. The most recent growth came on top of 9.4 percent growth in 2015 over 2014’s levels. “What this tells me is that, on a year-over-year basis, we are continuing the same growth trend” seen before, said Chhabra.

Webster noted that there could be a trend afoot in terms of hardware. Gone are the days when the office remained a haven for broadband connections with speed; now, with the advent and adoption of tablets and smart devices, shopping takes place anytime, anywhere, and not necessarily on Monday (when, of course, people return to the office).

Chhabra noted that, on Cyber Monday, 40 percent of spending happened across eCommerce, and given the past years when the tally was in the mid-teens, the latest data showed “just how much eCommerce has grown over the last three, four and five years.”

Within the overall retail growth numbers, eCommerce had a year-over-year growth rate of 12.1 percent, far outstripping brick-and-mortar at 3.7 percent.

Data Point Number Two: $73.44

That’s the average ticket size over the five-day holiday. And what drove spending? Electronics and appliances. The average ticket, said Chhabra, grew 1.8 percent year over year, across all retail categories. The subset of electronics and appliances came in at an average ticket price of around $149, said the executive, and last year, that number was a bit over $109. Home furnishings came in at $191 on an average ticket, compared to last year’s $181.

“The baskets either had more goods than last year,” said Chhabra, “or they held more expensive goods” across those categories. Other categories were almost flat but somewhat negative compared to last year, he said, such as clothing and accessories. Even despite discounting, he added, the trend is that merchants have been able to get “more out the door” that can lower the cost of inventory. And if the basket size is bigger than last year, then it follows that consumer appetites are bigger than they were last year.

Data Point Number Three: 3.7 Percent

This is the somewhat anemic growth seen across the physical realm, where shoppers vote with their feet (and yes, the trend here is positive), but increasingly are voting faster with their thumbs via devices. Within brick-and-mortar, some classes of retail fared better than others. Electronics and appliances saw nearly identical growth — roughly 15 percent year over year.

One of the more disappointing performances was sales at general merchandise retailers (department stores, big-box stores), which posted a 4.1 percent decline year over year at the brick-and-mortar locations. “That category as a group has 30 percent [of sales] online.” Overall, he said, the category saw growth in sales of 1 percent over the recent holiday driven by online. Sporting goods and books (not surprisingly) posted double-digit growth online at the expense of its brick-and-mortar brethren.

The tea leaves suggest that the remaining holiday season will be promising for retailers. The 21 days leading up to Thanksgiving were somewhat sluggish, Chhabra said, a sign that "people were holding back a lot of their shopping, really, for the holiday season." Through that three-week period before Thanksgiving, growth was a bit above 1 percent and then made the jump starting the Wednesday before the actual Thanksgiving weekend. Think of it, perhaps, as a spring coiled ... and unwinding.

“Everything looks good for holiday spending so far,” he said.



Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

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