Consumer behavior continues to change; right before our eyes. Shopping habits during the busiest (and most profitable times), November and December, are changing with each holiday season.
Several retailers have seen a reduction in traffic during the last two months of the calendar year. Best Buy’s profit has continued to cause challenges with price reductions due to discounting. However, the real story is traffic. Many stores, from malls and big-box stores, have been seeing a reduction in visits from consumers in their retail stores; shifting “traffic” to an online retail websites. Based on data from ShopperTrak and CoStar Group, foot traffic for the last two months of the year has continued to decline over the last four years. Decreasing from approximately 34M in 2010 to 17.6M in 2013. The percentage decline in traffic from 2010 to 2013 has been 28.2% in 2011, 16.3% in 2012 and 14.6% in 2013 (each from the previous year). The Midwest region had the largest decline (17.1%) in 2013.
The shift in holiday sales continues to transition to electronic environments. According to eMarketer (April 2013), e-commerce sales will continue to grow through 2017; from $225B to $434B. At the same time, mobile sales will become a stronger force in consumer sales. Forrester Research believes that both the total sales and percentage of sales will be used more by consumers through 2017. Last year, eMarketer estimated that smartphone and tablet sales were $24B (11% of total e-commerce sales) in 2012 with continuing growth resulting in an estimated $108B (11%) in 2017.
The statistics follow a trend reported by Branding Brand. Mobile traffic to Internet Retailers Top 500 e-retailers. In 2015, it is estimated that 60% of the visits to these retailer’s online websites will be from smartphones; up from 24% in 2012.
Two points are clear. 1) We are buying while we are moving and 2) we are buying while we are at home … as technology becomes more adopted and the reliance on traditional retailing declines.