One of the most interesting charts that we saw at Black Friday 2018 was that for the first time since 2006, big retailers had more online sales than in-store sales.
Some context here: At the end of September, each of the big four retailers Amazon, Wal-Mart, Target and Macy’s reported revenues of $61.9 billion. Walmart’s digital revenue was up more than 50 percent year-over-year, Amazon’s more than 60 percent, and then Target’s to nearly $6 billion. The declines in stores were generally in the low single digits. (I omitted TJX, TJ Maxx’s parent company, because, uh, it sells clothing.)
So is this a revolution in shopping?
Not at all. The challenge for retailers is that people don’t want to spend as much time going to the store as they used to, because there is so much more online. And a lot of people are still not comfortable using online shopping, and so the in-store shopping experience has also become more important.
For example, people are still going to the store just to get in the rhythm of shopping. According to Citi analysts, “Black Friday / Cyber Monday was seen as a clear destination for retailers to be seen, heard and tested by the consumer.” And brick-and-mortar sales still increased, by 4.8 percent, according to IBM’s benchmark purchasing survey.
And, furthermore, this trend isn’t over — last month saw Apple announce that all its future products will be sold exclusively online, as well as a record year for Disney’s film sale on iTunes and the movie division’s digital trailer.
As mobile shopping gets more and more familiar, the services retailers offer will keep getting more features (like chatbots). And the movement from brick-and-mortar stores to online shopping is only going to keep growing. That said, we still expect to see massive spending for Cyber Monday on Monday, November 26.
Bottom line: Brick-and-mortar stores are still important, despite what other people think.