Yes, Virginia, Online Shopping Is Going to Get Hotter This Season

NRF data is latest to show tilt to digital

Author: Andria Cheng

October 27, 2017

A string of recent data suggests that online retail is going to eat into brick-and-mortar sales faster than ever this holiday season.

The latest evidence: An October survey of nearly 7,350 consumers conducted by Prosper Insights & Analytics for the National Retail Federation further found that, for the first time in the survey’s history, online topped all brick-and-mortar destinations as the channel where most consumers said they plan to buy holiday items. In percentage terms, nearly 59% of consumers said they plan to do their holiday shopping online this year, up from 56.5% last year. 

In second place was department stores, cited by 56.6% of consumers. In a potentially worrying sign for discount stores, 54.2% of consumers said they plan to do holiday shopping there, ranking those types of retailers in third place, down from 55.7% last year, and well below a peak of 77.1% in 2004, the survey data, released Friday, showed.

Meanwhile, 38.2% of those in the NRF survey said they plan more than half of their holiday shopping online, up from 35.4% last year and just 15.6% 10 years earlier, the NRF survey showed.

Related Links

Pie Slice

Online Could Steal In-Store's Holiday Pie Faster than Expected

The survey echoes results of a recent NPD survey of nearly 3,800 consumers that found that online shoppers said they plan to spend an average of $793 this holiday season, 70% more than the $467 brick-and-mortar-only shoppers expect to spend.

And a separate Nielsen survey released Thursday showed that 85% of US consumers plan to buy holiday gifts online, with 20% of those saying they will spend more there than before. Supercenters/mass merchandisers/discounters shared the second spot with department stores, with each cited by 82% of consumers in the Nielsen study.

The shift online has put more pressure on many traditional brick-and-mortar retailers. JC Penney on Friday forecast a much deeper than expected loss as the company, in CEO Marvin Ellison’s words, is fast liquidating its less popular merchandise inventory in women’s and other apparel divisions, so it can free up funding to “invest in new and trending merchandise categories.” Penney also has shut stores and is expanding in areas such as better-performing appliance category and Sephora in-store beauty shops.

With Amazon and Walmart in a heated battle to provide innovative new delivery options,  the NRF survey suggested that getting delivery right and fast will separate winners from losers in the online fight: 12.3% of consumers said they plan to take advantage of same-day delivery this holiday, up from 9.8% last year. Meanwhile, the percentage expecting to use free shipping has gone up to 94.1%, up 1 percentage point from last year while the portion of those wanting “expedited” shipping has risen to 19.3% from 17.4%.

Meanwhile, ever-earlier promotions appear to be having an impact on shopping patterns. The percentage of consumers who plan to begin their holiday shopping in November rose  to a record 42.2% this year from 41.4% last year and 38.3% in 2007. 

In comparison, the number of procrastinators looks to be declining: those who plan to start shopping the last two weeks of December has declined to a record low of 2.4% this year from a peak of 5.6% in 2004.