Q3 Retail Numbers: Omnishopper Strategies Start To Pay OffJohn Gaffney |
Per usual, reading the tea leaves regarding eCommerce trends this time of year can be confusing. New census bureau numbers (non-adjusted here) show that the estimate of U.S. retail eCommerce sales for the third quarter of 2015 totaled $81.1 billion, an increase of 2.9 percent (±0.9%) from the second quarter of 2015. The third quarter 2015 eCommerce estimate increased 15.2 percent (±1.2%) from the third quarter of 2014 while total retail sales increased 1.6 percent (±0.4%) in the same period. eCommerce sales in the third quarter of 2015 accounted for 6.8 percent of total sales.
That’s a long way of saying that eCommerce is growing at a steady pace, when viewed on a national scale.
Go a bit deeper into individual retail reports on Q3 and you will find some more dramatic growth stories. As holiday season 2015 is nigh, we’re seeing some high-profile success stories from companies that have expanded their strategies from “channel specific” to “consumer-centric.” in Q3. Example: Home Depot spiked online orders by 40 percent, with 40 percent of those orders being picked up in store. Example: Nordstrom’s online operation (through its off-price sites NordstromRack and HauteLook) took in $363 million in Q3, up 45.8 percent from $249 million during the same time last year. Executives at the company attributed the success to increased expansion of inventory to attract younger buyers.
However, maybe the most impressive Q3 numbers came from Target. It reported a 56 percent increase in profits for the quarter to $549 million and sales rose 2.1 percent from Q2. There was a 1.9 percent lift in comparable store sales while sales from digital channels jumped 20 percent.
Ordering online and picking up in-store will account for 25 percent of sales in Q4, according to the company’s latest quarterly guidance. And for key focus areas such as wellness and baby products “enhanced in-store and online presentations in the baby department are boosting both traffic and conversions.”
Notice that working across channels has started to pay off and inventory is job one. All of which supports our theory that retailers need to focus less on individual channel strategies (omnichannel) and get with the “omnishopper.” In our own Omnishopper research work when asked the ways in which online shopping is better than in-store, 43 percent of consumers say it makes it easier to compare products, and 42 percent say it helps then save money. When asked how in-store shopping is better, 59 percent said they could receive the product more quickly, and 54 percent said they receive good recommendations from merchants.
The combination of these factors helps to explain the growth of “order online, pickup in-store.” Consumers can do the major research and big price comparison online, and then head to the store to receive specific merchant recommendations and have the product in hand that day.
Retailers and those who track the retail industry should see now that consumers aren’t differentiating too sharply between online and in-store shopping. To consumers, the key is delivering the right merchandise and the right experience at the right time, and they will get there any way they can.