The Decade's Final Holiday Shopping Season Proved E-Commerce Dominates
As the last holiday shopping season of the decade is now in the books, we are getting a clearer picture of how retailers fared during the busiest shopping season of the year.
Holiday retail sales rose 3.4% compared to 2018, according to Mastercard SpendingPulse, which tracks spending in Mastercard’s payments network while estimating cash and other payment forms from November 1 through December 24. Not surprisingly, online sales grew at much quicker pace, increasing 18.8% compared to 2018. E-commerce sales accounted for 14.6% of total retail sales during this year's holiday shopping season.
"E-commerce sales hit a record high this year with more people doing their holiday shopping online," said Steve Sadove, senior advisor for Mastercard. "Due to a later than usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices."
The growth in online sales this holiday season is hardly surprising. Market Crumbs previously detailed how Black Friday is becoming irrelevant as shoppers increasingly prefer to shop online. Black Friday shoppers spent $7.4 billion online this year, an increase of 19.6% from 2018. The total made it the second-largest online shopping day in U.S. history behind this year's Cyber Monday, when shoppers spent a record $9.4 billion, an increase of nearly 20% from 2018's Cyber Monday.
The ease of shopping online is even turning Thanksgiving into a popular shopping day. Online sales on Thanksgiving reached $4.2 billion, marking the first time online sales on Thanksgiving surpassed $4 billion. The total marks a 14.5% increase from Thanksgiving of last year.
Comparing year-over-year overall sales growth to online sales growth in various segments shows just how much consumer shopping preferences have changed compared to the beginning of the decade. The jewelry sector saw overall sales growth of 1.8%, with online jewelry sales increasing by 8.8%. Department stores saw an overall sales decline of 1.8%, while their online sales increased by 6.9%. Overall electronics sales increased by 4.6% as online electronics sales increased by 10.7%.
Along with the rise in online shopping comes an increase in returns. UPS expects to process 1.9 million returns, an increase of 26% from last year and the seventh-consecutive annual record. "This process is a change from years past, when consumers would rush to physical retailers the day after Christmas and stand in long lines to make returns," UPS said in a statement.
The death of brick-and-mortar retailers, commonly referred to as the "retail apocalypse," has been a theme for the better part of this decade. As countless retailers have closed thousands of stores, the next decade should see a continuation of this trend and possibly even see it get worse.
Everyone got spying devices. Amazon’s Alexa app jumped to the top of Apple's list of free apps on Christmas, indicating Amazon's Alexa-enabled voice assistant products were a popular gift this year. The Alexa app is used to set up Alexa-enabled devices and is also used to manage them. Of course, there's a long list of privacy issues related to Alexa-enabled products, but it appears people aren't too concerned about it.
Boeing is cleaning house. The latest casualty of the Boeing 737 MAX fallout is Michael Luttig, who was appointed senior adviser to the company's board in May. Luttig, who has served as general counsel of Boeing since 2006 and advised former CEO Dennis Muilenburg, will retire effective December 31. Luttig was a key part of Boeing's defense over the two air crashes that killed 346 people.
It's really because not-QE. The stock market continued its move from the bottom left to the upper right as all three major U.S. indices hit fresh record highs in light trading. The Nasdaq crossed above 9,000 for the first time ever. Comically, most mainstream media outlets hailed "progress in trade talks" as fueling the rally, although, it's quite clear at this point the move in stocks is a result of the Federal Reserve's balance sheet expansion, which they insist is not quantitative easing.
Was it really an honest mistake? YouTube said it will reinstate hundreds of cryptocurrency-related videos to the site after deleting them "in error" earlier this week. "With the massive volume of videos on our site, sometimes we make the wrong call," a YouTube spokesperson said. "When it's brought to our attention that a video has been removed mistakenly, we act quickly to reinstate it." Last year, Google banned cryptocurrency-related advertisements before partially reversing the decision a few months later, allowing regulated crypto exchanges to buy ads.
Will other countries follow? Russia has begun testing its own internal internet after Russian President Vladimir Putin signed a law earlier this year, Runet, which called for the development of a separate internal internet. Earlier this week, Putin said the move "is aimed only at preventing adverse consequences of global disconnection from the global network, which is largely controlled from abroad. This is the point, this is what sovereignty is — to have our resources that can be turned on so that we would not be cut from the Internet."