Online Retail Sales Cross Tipping Points in 2013

Online retail sales continue to increase dramatically and show no signs of leveling off. In fact, 2013 online retail sales have crossed multiple tipping points that are critical developments of interest to small businesses.

Continued Dramatic Increases this Year

Last week’s EDI blog post discussed the 120% increase in Cyber Monday sales in the last 3 years. But let’s look at more revealing data, data that expose important tipping points:

  • According to the National Retail Federation, 55% of American shoppers made online purchases on Cyber Monday this year. More than half sounds like a tipping point, right? By the way, how many shoppers is that? 131 million.
  • According to Comscore, Black Friday online sales crossed the billion dollar mark at $1.2 billion which is a 15% increase over 2012. About 66 million shoppers participated. It’s hard to ignore a billion dollar number.
  • According to a recent 2013 IBM Digital Analytic’s Benchmark report, total online sales for the 5 day Thanksgiving holiday shopping period exceeded $2 billion dollars which was a 21% increase over last year. If you didn’t consider $1 billion a tipping point, then how about $2 billion?

Not Just a Few of the Major Players

These increases are not for just a few of the major online players such as Amazon, Best Buy, Target and Walmart. Most retailers fixed the ability of their web sites to handle the large volumes of online shoppers that hampered sales last year. Data from IBM Digital Benchmarks includes these online sales increases on Cyber Monday 2013 vs Cyber Monday 2012:

  • Department Stores up 70%
  • Health and Beauty up 65%
  • Home Goods up 26%

Actual Store Visits vs. Online Sales

Here is another hard-to-ignore tipping point: How do these online numbers compare to actual visits to stores tracked by IBM over the Thanksgiving holiday shopping days?

  • 76 million folks went to department stores
  • 55 million went to discount stores
  • 45 million visited electronics stores
  • In comparison, 131 million shoppers bought from online web sites on Cyber Monday.

What Does This Mean to Your Small Business?

Your retail customers will continue to focus on an efficient supply chain process with your company. Support for more online sales in the years ahead is likely.

In some cases they will still want you to ship to their distribution centers. But because online sales orders do not need to be stocked on store shelves, the lead time for those orders will probably grow shorter and volume increases may be over a shorter period of time.

Do not be surprised if your retail customers want to explore the option of your company drop shipping directly to consumers on behalf of the retailer. You will need to be prepared to scale your processes before committing.

CovalentWorks can assist you with a scalable web-based EDI solution that address the evolving requirements of your customers. If needed, integration with your systems can be added. If you use a 3PL, interfaces to the 3PL can be implemented to improve efficiency and speed of fulfillment.

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