Fresh Holiday eCommerce Data: Another Nail In Physical Retail’s Coffin?

Holiday eCommerce Data Against Physical Retail?

Online retail and mobile commerce had their shining moments over the 2018 holiday shopping season — the latest evidence of that comes from Adobe Analytics, which said that U.S. consumers spent a record $126 billion online during that period, above the company’s earlier projection. The new figure comes amid fresh questions coming out of that holiday season about the viability of brick-and-mortar retail sales.

According to Reuters, Adobe also said that “mobile platforms made up 51 percent of traffic to retail websites during the November-December period and were responsible for nearly a third of all online spending.” Adobe had previously estimated that eCommerce in the United States during the recently completed holiday shopping period would increase 14.8 percent, reaching $124.1 billion.

Late Holiday Season Sales

Other recent data also points to the increasing role that eCommerce is playing during the holiday season — even those days after Christmas. According to the 2018 Holiday Retail Index by Verizon, average daily eCommerce traffic to the top 25 U.S. retailers increased by 7.5 percent year-over-year on Thursday, Dec. 27 and 7.7 percent year-over-year on Friday, Dec. 28. And while there was a 20 percent year-over-year decline in U.S. online retail traffic on Sunday, Dec. 30, eCommerce traffic saw a boost every day compared to the previous year between Wednesday, Dec. 26 (0.2 percent) and Sunday, Dec. 30.

But physical stores did not share the holiday glory of online retail and mobile commerce.

Macy’s Woes

Macy’s provides one strong example of that, as it stated earlier this month that its 2018 holiday sales would be lower than expected. The retailer said its less-than-expected performance issued from mid-December sales weakness, but didn’t detail what happened in mid-December to take the wind out of their sails.

“The holiday season began strong – particularly during Black Friday and the following cyber week – but weakened during the mid-December period, and did not return to expected patterns until the week of Christmas,” said Jeff Gennette, chairman and chief executive officer at Macy’s.

When it comes to eCommerce, at least in general, the early season was also strong. According to that Reuters report, “Online shoppers spent $3.7 billion on Thanksgiving and $6.2 billion on Black Friday, the day after Thanksgiving. Cyber Monday — the Monday after the Thanksgiving holiday — was the biggest U.S. online shopping day ever, with $7.9 billion spent.” Beyond that, “consumers spent an average 40 percent more per day during the three weeks after Cyber Monday than in the first three weeks of the season,” Adobe said. Sales continued to grow until Dec. 17.

Kohl’s, too, had less-than-stellar news about its experiences during the 2018 holiday shopping season. That retail chain — recently cozying up with Amazon — reported comparable sales growth of 1.2 percent during the final two months of 2018, down from 6.9 percent a year earlier. The Macy’s and Kohl’s stumbles stood out particularly since sales for the 2018 U.S. holiday shopping season were their strongest in six years, according to a Mastercard report in late December.

Demise of Physical Retail?

So what does that mean for the fate of physical retail going forward?

According to a new PYMNTS column from Karen Webster, nothing pretty, at least from the point of view of brick-and-mortar merchants. She noted that the disappointing holiday news about Macy’s and Kohl’s also comes as Sears — a big part of not only U.S. retail history, but also American mainstream culture — is experiencing its long-anticipated swan song.

While taking note of the contributing factors in those recent results for physical retail, Webster in that column also takes a deep and sometimes contrarian (assuming you are a fan of the U.S. Census) dive through the data to make the case for the demise of physical retail. “The myth of physical retail’s largesse, as perpetuated by that inaccurate Census data, was uncovered almost three years ago to the day,” she writes.

One of her conclusions?

“Consumers don’t think twice about buying online the things that used to be physical retail’s exclusive domain: clothes, jewelry, sporting goods, electronics and, increasingly, home furnishings and even auto parts,” Webster writes.



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.