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Marketplace technology firm Mirakl reports surging sales

Paul Demery — Mon, 12 Feb 2024 20:55:57 +0000

Mirakl, the B2B and retail e-marketplace technology provider, says its Marketplace Platform reached profitability last year for the first time since the company’s launch in 2012.

Adrien Nussenbaum, co-CEO, Mirakl

2023 marked a “year of maturity for Mirakl,” says Adrien Nussenbaum, co-founder and co-CEO. “Not only did we significantly increase our annual recurring revenue … but we are now financially self-sustaining.”

Nussenbaum adds that Mirakl powers ecommerce operations for more than 450 enterprises. They include B2B companies Airbus Helicopters, pharmaceuticals distributor Cencora (formerly known as AmerisourceBergen), Mitsubishi Electric, restaurant supplier Parts Town and Toyota Material Handling. Among its retailer clients, Mirakl counts Macy’s, Best Buy, Kroger and Saks Fifth Avenue.

Mirakl-powered B2B marketplace sales

Mirakl says the gross merchandise volume on the Mirakl Marketplace Platform, which client companies use for first-party and third-party ecommerce sales and drop-shipping, grew 50% year over year in 2023 to $8.6 billion.

In addition, Mirakl generated a 20% increase in annual revenue to nearly $160 million.

Nussenbaum says Mirakl has been expanding and upgrading its digital commerce and marketing products and services in several areas to help online sellers meet rising expectations of personalized and helpful online buying journeys.

For example, Mirakl introduced last year a program for integrating AI technology across several Mirakl technology platforms:

Mirakl Marketplace.
Catalog platform for onboarding sellers’ product information.
Target2Sell content personalization.
Target2Sell content personalization.
Mirakl Ads online advertising program for promoting products on e-marketplace pages.

Mirakl says that, through a feature developed on generative AI, Mirakl customers “can enhance the data quality and completeness of product catalogs, boost search engine rankings, and increase conversions automatically by optimizing product titles, descriptions and attributes.”

It adds that Mirakl has also developed AI-powered language translations to help online sellers “expand their business into new territories.”

In addition, Mirakl launched in 2023 the Mirakl Payout for online payment transactions and a global arrangement with marketing and communications firm Havas Group.

In a sign of what it expects more robust growth to come, Mirakl said it achieved a record $1 billion in monthly GMV in November. And it noted that more than 30 Mirakl-powered marketplaces surpassed the $100 million GMV mark last year, including several that surpassed $500 million.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s MSC Industrial report.

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Editors’ picks: Our favorite stories about online retailers in 2023

Abbas Haleem — Fri, 19 Jan 2024 13:00:59 +0000

Ecommerce technology is constantly evolving, and online retailers managed to take advantage of that evolution in 2023.

Below, we recap some of Digital Commerce 360’s most insightful articles about online retailers from 2023 regarding 10 key coverage areas:

Industry news and trends (including the Bed Bath & Beyond saga)
Artificial intelligence
Digital marketing
Exploring new technology
Fulfillment and delivery
Livestreaming
Mergers and acquisitions
Online marketplaces
Payments and fraud
Sustainability

These stories highlight meaningful changes to online retailers’ ecommerce operations in 2023. Most notably, they include new and improved technologies and strategies that online retailers have implemented. We published roundups specifically for some of these coverage areas over the first couple weeks of 2024, and we link to them below. Those topic roundups — about artificial intelligence, fulfillment and delivery, and payments and fraud — include subtopics.

1) Industry news and trends

Silicon Valley Bank’s collapse hit the ecommerce world. See a list of impacted companies.

The bank had a history of investing in ecommerce startups, and Etsy, Shopify, and others had accounts with Silicon Valley Bank.

Gathering data in the age of privacy 

Learning how to collect and use first-party data is key if retailers are to navigate a world without third-party cookies.

Data shows online retailers with the highest carbon footprints

Websites emit carbon dioxide emissions (CO2). Recent data shows which retailers top the list of offenders versus those who don’t.

Retail profitability rebounds but remains pressured by online costs

Retailers’ profits declined from 2012-2019, in part due to the costs associated with online and omnichannel sales, but bounced back during the pandemic, Deloitte says. Cutting costs, including by limiting free shipping and handling returns more efficiently, will be essential to maintaining profit margins.

What ecommerce retailers can learn from HomeGoods exit

Despite giving ecommerce a go, HomeGoods found out that off-price retailing is not well suited for its online sales.

1.5) The Bed Bath & Beyond saga

Amid all this ecommerce news and the largest online retail trends of 2023, one story remained at the forefront for months. Bed Bath & Beyond’s downfall had — and continues to have — a meaningful impact on the retail industry.

Bed Bath & Beyond says it’s not beyond help, but reports further losses

Coming just days after the retailer said it might seek bankruptcy protection, the poor earnings report paints a dismal picture for the beleaguered retailer.

Which retailers will benefit from Bed Bath & Beyond’s demise?

Bed Bath & Beyond’s bankruptcy presents an opportunity for retailers to cash in on the shopping experience both in store and online.

Overstock CEO says brand name is a “boat anchor” ahead of Bed Bath & Beyond relaunch

Revenue and other key metrics were down for Overstock, but CEO Jonathan Johnson says the Bed Bath & Beyond relaunch will be a “new phase.”

Goodbye, hello: Buy Buy Baby preps to be born again

Under new ownership, Bed Bath & Beyond’s former baby-products retailing unit plans an ecommerce and brick-and-mortar revival.

2) Artificial intelligence

Perhaps the most-talked-about subject for months, if not the entire year, artificial intelligence had a resurgence in 2023. Many retailers were already using it — and machine-learning technology — to guide operating processes. But then, generative AI entered the arena at the end of 2022, and it drew global attention to its capabilities. Here’s how some online retailers are leading AI integration into ecommerce.

3) Digital marketing

How are digital marketers using AI to boost conversion?

Artificial intelligence allows digital marketers to quickly test how consumers respond to ads, images and emails. Over time, the algorithm learns, and its predictions become more accurate. Learn how three retailers increased their online sales after investing in AI.

Online flower retailer UrbanStems increases conversion 12% during Valentine’s Day season

Conversion through paid social channels drove that overall increase, growing 83% year over year.

Why wacky ads work on TikTok, while sober is better for Facebook

Four online marketers share ways they curate their brands’ social media content to cater to their target audience on each platform, and explain when it’s OK to repurpose content.

80% of Chico’s customers sign up for its loyalty program in the first nine months

Chico’s updated its loyalty program for the first time in 30 years, and after one year, more than 80% of customers are members.

Lights, camera, conversion: How some retailers use videos to entice shoppers to buy

Online retailers use video to provide shoppers with a rich customer experience that informs, engages and converts.

4) Exploring new technology

Generative AI wasn’t the only new technology to hit retailers’ tech stacks in 2023. Companies dived into the metaverse and other virtual realities. They also took advantage of atypical payment methods and found ways to change business models entirely.

American Girl invests in its virtual museum

The retailer’s digital museum provides content so girls can play, learn more about the brand’s doll characters and create product wish lists.

Crurated’s wine platform uses NFTs and memberships to find a younger market

70% of Crurated’s members using the blockchain wine service are under 45 years old.

Forever 21 caters to Gen Z shoppers with fast checkout, metaverse products

Despite an initially turbulent relationship, apparel brand Forever 21 and payment provider Bolt Financial are now touting positive results from the integration of the streamlined checkout button.

What online retailers can learn from Evite’s business model pivot

Evite’s customer experience suffered because of the company’s reliance on advertising revenue, CEO David Yeom tells Digital Commerce 360. Evite took the lull in parties during the pandemic to overhaul its revenue streams.

UK crafts retailer uses data to guide website replatforming process

Hobbycraft had to learn what parts of its website did and didn’t make sense for its shoppers, what bugs to work out, and what changes its website wasn’t capable of. And after about 12 years with its previous website, it replatformed in March 2022.

5) Fulfillment and delivery

Online retailers continued learning how to cut and manage shipping costs in 2023. Some major retailers optimized fulfillment and delivery by using stores to fulfill orders, whether via delivering from them or urging customers to use in-store and curbside pickup options. These stories highlight meaningful fulfillment trends among online retailers in 2023.

6) Livestreaming

Natori invests in livestreaming to appeal to new generation of customers

Luxury apparel brand The Natori Co. believes livestreaming will enable the brand to appeal to new customers.

Orchard Mile takes control by livestreaming its own shopping events

Luxury online marketplace Orchard Mile hosts livestreaming shopping events through its own website rather than other channels.

Newegg livestreams more than 24 hours a day

Newegg livestreams 30 hours of content on weekdays, which includes livestreams across its six handles and in China.

Women’s apparel retailer ‘Evereve TV’ attracts shoppers, increases conversion

Evereve staff model clothing and share their styling tips through video on the retailer’s Evereve TV — and it’s boosting sales.

7) Mergers and acquisitions

Although there were many more mergers and acquisitions in 2023, these are some of the most notable ones impacting the industry.

Walmart sells outdoor retailer Moosejaw to Dick’s Sporting Goods

It’s the latest example of Walmart selling off online-focused brands it acquired as it bulked up its ecommerce business several years ago. Moosejaw will be part of the Public Lands outdoor business unit that Dick’s launched in 2021.

Unilever is selling Dollar Shave Club after seven years

Private equity firm Nexus Capital Management will acquire a 65% stake in Dollar Shave Club, with Unilever retaining 35%. The deal is expected to close by the end of the year.

UPS to acquire Happy Returns

Happy Returns’ service for online orders will soon be available at more than 12,000 U.S. locations, the CEO of UPS says.

What Sycamore gets for $1 billion to buy Chico’s

Private equity firm Sycamore Partners unsuccessfully tried to buy Chico’s FAS in 2019. Why is Chico’s worth $1 billion?

Why a serial ecommerce entrepreneur bought Blue Apron

Blue Apron is being sold to Wonder Group, an online food-to-home delivery company, founded by serial ecommerce entrepreneur Marc Lore.

8) Online marketplaces

Michael’s is the latest retailer to add a third-party marketplace

The digital marketplace will quadruple the number of products for sale, with the majority from third-party sellers.

Walmart and Amazon are growing their online marketplaces. Here’s how they compare.

They are both growing the number of third-party sellers on their online marketplaces, but Amazon has a significant lead.

Selling on Amazon is key for SMBs, but it might not make money

Small and medium-sized retailers say selling on Amazon is a necessary part of customer acquisition, despite added costs.

Amazon fee change ‘completely out of the blue’ for some Amazon sellers

Amazon announced it will end its Small and Light Program and introduce Low-Price FBA rates for all items priced below $10 (previously $12).

Prime Day’s mixed message: some merchants boost prices during the event

Last year, retailers raised prices on 13% of top-selling items during the Prime Day promotion, according to new research. And this year, Amazon rolled out invitation-only deals that limit price drops to select shoppers.

Amazon announces updates to Buy with Prime to stay competitive

Updating Buy with Prime is a way for Amazon to collect data and keep its market share while competing with Shopify.

What were the biggest ecommerce takeaways from Amazon’s Q2 earnings call?

CEO Andy Jassy said Amazon is developing more AI technology, making its fulfillment more efficient and improving its B2B division for business buyers.

EBay rolls out its generative AI listing tool to all marketplace sellers in app

The generative AI tool writes product descriptions for eBay’s app marketplace sellers based on their listing’s metadata.

Michaels launches MakerPlace online marketplace

Michaels MakerPlace does not charge sellers a listing fee and allows them to sell access to virtual classes and how-to guides.

9) Payments and fraud

Buy now, pay later was already on the rise going into 2023, when its popularity continued to grow. And as retailers considered implementing BNPL, even if late in the game, they also looked into other ways to make the payments process smoother for their consumers. These stories highlight meaningful payments and fraud trends from last year, showing how online retailers are staying focused on their bottom lines.

10) Sustainability

Grove Collaborative CEO talks sustainable shipping

With a goal to be plastic-free by 2025, personal care and home products brand Grove details ways it makes direct-to-consumer shipping more sustainable.

The secondhand retail industry grew 28% in 2022, according to ThredUp’s latest report

The report shows Gen Z and millennials are growing more open to buying and selling used clothing online.

How an apparel brand eliminates polybags

Toad and Co. commits to less packaging by sending orders in reusable bags and switching to paper-based polybags that can be regularly recycled.

Bedding brand aims for luxury unboxing without extra tissue paper

Beflax, a small online business, ships its $300 linen bedsheets in reusable packages. The brand wants its customers to have a premium package without extra waste.

Jewelry retailer strives for sustainability on different levels

J’evar uses an in-house generative AI tool to boost its sustainability efforts, which also include using a solar farm to grow its own diamonds.

Archive helps retailers resell their own products

Hanna Andersson customers take advantage of store credit options as they list items on the retailer’s Hanna-Me-Downs resale site.

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2023 online holiday spending reached $221.1 billion

Mary Meisenzahl — Thu, 04 Jan 2024 15:00:59 +0000

U.S. online holiday spending reached $221.1 billion in 2023, according to Adobe Analytics. That’s in line with Adobe’s projection of $221.8 billion. Online holiday spending in the U.S. grew 4.9% over Adobe’s recorded $211.7 billion in 2022, setting a new ecommerce record.

The holiday season encompasses online spending between Nov. 1 and Dec. 31 across 1 trillion visits to U.S. retail sites, 100 million SKUs and 18 categories.

The majority of online holiday shopping happened in November, boosted by a strong Cyber 5. U.S. consumers spent $123.5 billion online in November, a 6% year-over-year increase. $38.0 billion of that spending took place between Thanksgiving and Cyber Monday, growing 7.8% over 2022.

The other $98.6 billion in U.S. online sales were recorded in December. Retailer sales that continued on past Cyber Monday drove some of that December spending, Adobe says.

Holiday spending by category

65% of online holiday spending in 2023 was in just five of the 18 categories Adobe tracks.

Top categories by online holiday spending:

Electronics ($50.8 billion)
Apparel ($41.5 billion)
Furniture ($27.3 billion)
Groceries ($19.1 billion)
Toys ($7.7 billion)

TVs, smart speakers, tablets, Bluetooth headphones, and smart watches ranked among the most popular online purchases during the holiday period. Pajamas, sneakers, and cold-weather items like sweatshirts dominated apparel sales. Popular furniture purchases included barstools, throw pillows and Christmas decor.

Aside from the top categories, skin care serums and moisturizers, vacuums, and small kitchen appliances were also top sellers, Adobe says.

Categories with the highest sales also recorded some of the largest discounts. Electronics discounts peaked at 31% off listed prices, followed by toys (28%) and apparel (24%).

Buy now, pay later (BNPL) in holiday spending

BNPL was used as a payment method in more online sales than ever this year, according to Adobe. It contributed $16.6 billion in online spending, an increase of 14% and $2.1 billion over the same period in 2022. U.S. consumers used BNPL for $9.2 billion in online purchases in November, up 17.5% year over year. Cyber Monday was the biggest BNPL day in history, accounting for $940 million in sales, up 42.5%.

“In an uncertain demand environment, retailers leaned on discounting and flexible payment methods to entice shoppers this holiday season,” Vivek Pandya, lead analyst at Adobe Digital Insights, said in a statement. “The strategy was effective, driving record spend online during big days like Cyber Monday and Black Friday, and a record 11 days that surpassed $4 billion in daily spend this season.”

The holiday season contributed to a huge year for BNPL use, accounting for $75 billion in online spending in 2023, up 14.3% from 2022.

Other holiday spending takeaways

Mobile shopping overtook desktop online sales for the first time in 2023. 51.1% of online sales across the holiday season were made via smartphones in 2023, up from 47% in 2022, Adobe says. Mobile sales peaked on Christmas Day at 65%, from 61% in 2022. Consumers made purchases on final holiday deals while spending time with friends and family, Adobe says.

Meanwhile, curbside pickup dipped slightly, though it still remains popular. It was used as a fulfillment method in 18.4% of online orders from retailers offering the option. That’s down from 21% in 2022. Usage peaked ahead of Christmas Eve on Dec. 22 and Dec. 23, accounting for 36.8% of orders during that time frame. Major retailers including Walmart and Target promoted their curbside capabilities through Christmas Eve.

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7 insights from the Cyber 5 highlight ecommerce’s holiday impact

Abbas Haleem — Mon, 18 Dec 2023 14:00:44 +0000

We covered a lot in this year’s Cyber 5 edition of Strategy Insights. And rightfully so. These are the busiest shopping days of the year — online and offline.

Digital Commerce 360 editors and researchers found out how much consumers spent, where, on which days, and how they paid. We also learned how online retailers approached the shopping-centric days, and which ones offered promotions.

Understanding these spending (and discounting) habits is critical for online retailers, especially if they want to learn what went right — and wrong — before the next busy shopping season comes around.

Here’s an overview of some of our best Cyber 5 coverage this year — just a sampling of examples you’ll find in the rest of this report. Download the entire December 2023 Cyber 5 edition of Strategy Insights here.

The Cyber 5 edition of Strategy Insights covers a lot, including how online retailers capitalized on the holiday season rush in November.

1) Cyber 5 online sales grow 7.8%

We found out just how big this year’s key Thanksgiving-week shopping days were. Unsurprisingly, Cyber Monday is still the largest online sales day in the U.S., with web sales reaching $12.4 billion in 2023, according to Adobe Analytics data. Cyber Monday 2023 online sales grew 9.6% over 2022’s $11.3 billion.

For perspective, the next-busiest online shopping day (Black Friday) didn’t crack $10 billion. This year, Black Friday online sales grew 7.5% to $9.8 billion.

2) Online retailers share how Black Friday and Cyber Monday really went

Despite record spending overall, retailers that Digital Commerce 360 spoke with reported mixed results. For many retailers, 2023 has been about coping with budget-conscious consumers who are choosier about how to spend their discretionary income.

Digital Commerce 360 heard from Adore Me, Meble Furniture, Buy Buy Baby, and other retailers on how they performed during the Cyber 5, and how those results will impact the rest of the holiday season.

3) 92% of top online retailers offer Cyber Monday promotions

We already know Cyber Monday is meant to be the day for online shopping promotions, and online retailers affirmed that. Of the 100 online retailers we paneled, 92 offered some kind of promotion on Cyber Monday. And of those 92 retailers, 84.8% specifically made those promotions about Cyber Monday.

3.5) DNVBs stay steady with Cyber Monday promotions

The trends differed among digitally native vertical brands, though. According to Digital Commerce 360 research, 85.0% of the 80 DNVBs in the Top 1000 ran promotions on Cyber Monday. While many brands were offering discounts, it’s a smaller share than the Top 1000 overall. Just 63% of DNVBs that offered promotions tied deals to the holidays, and many didn’t bother with decorating their websites.

4) Holiday online traffic data shows who shopped for what

With all these deals, online retailers enticed shoppers to browse the web for holiday gifts. Early results showed notable sales spikes in apparel, appliances, toys, and elsewhere. Data Digital Commerce 360 analyzed gives insights into who was doing holiday shopping during the Cyber 5, broken down by age and gender across different merchandise categories.

5) Amazon gains Cyber 5 traffic share from other top retailers

Ecommerce industry observers shouldn’t be surprised to hear that Amazon had the largest share of web traffic during the Cyber 5. And it wasn’t close. Amazon accounted for more than a quarter of all web traffic to Top 1000 retailers from Thanksgiving to Cyber Monday.

6) Consumers embrace buy now, pay later during Cyber 5

BNPL usage reached record levels on Cyber Monday, accounting for $940 million of the total $12.4 billion spent, according to Adobe. That’s a 42.5% increase year over year, on top of 85% it grew on Cyber Monday 2022. And with that increase in usage came changing habits.

7) Online holiday shoppers boost record overall Cyber 5 results

Holiday shoppers showed up in historic numbers for online and in-store purchases over the Cyber 5, according to the annual survey released by the National Retail Federation and Prosper Insights & Analytics. That surpassed NRF’s expectations of 182 million shoppers by more than 18 million as more shoppers took to the web this year. Online was the top destination for Cyber 5 shoppers, NRF found.

— Abbas Haleem, Associate Editor, Digital Commerce 360

Additional reporting from Digital Commerce 360 editors Mary Meisenzahl, Brian Warmoth, Mark Brohan and James Risley.

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Consumers embrace buy now, pay later during Cyber 5

Mary Meisenzahl — Thu, 30 Nov 2023 23:08:13 +0000

U.S. consumers spent about $38 billion online between Thanksgiving and Cyber Monday this year, and more of that spending than ever was facilitated using buy now, pay later (BNPL) services.

BNPL users also displayed some changing habits, using the payment method on carts that had 11% more items, on average, than last year.

The payment service was used for $8.3 billion in online orders between Nov. 1 and Nov. 27, according to Adobe, up 17% year over year. November 2023 is projected to be the biggest month to date for BNPL spending.

What is buy now, pay later (BNPL)?

BNPL is a short-term financing option offered on the online checkout page of some retailers. It allows shoppers to spread out the payment for a purchase over a specified period. Consumers apply for the financing option with whichever vendor the retailer uses during checkout. Then, customers pay the smaller payments over the course of several months and without an interest fee. Instead, retailers pay the BNPL vendor a service fee per transaction, which typically ranges from 2% to 8%. Many of the large vendors pay the merchant the full order amount right away. Then, they don’t have to wait for the customer to pay each installment to receive the payment.

BNPL loans can be more attractive to consumers than traditional credit cards because they generally do not charge interest over the period of the loan. Consumers can qualify for them without a hard credit check that could show up on a credit report. Shoppers can pay for the installments using a credit card, debit card or bank account.  

Which retailers use buy now, pay later?

54% of Digital Commerce 360’s ranking of the Top 1000 online retailers offer some version of this payment type. That’s up from 45.8% of Top 1000 retailers in 2022, 45.7% in 2021, and 28.2% in 2020. And the biggest retailers are joining in, with Amazon.com Inc. adding BNPL through vendor Affirm Inc. in 2021 and expanding it to other retailers through Amazon Pay this year. Walmart Inc. also uses Affirm, and Apple Inc. launched its own BNPL version in March. Amazon, Walmart, and Apple are the top three retailers, respectively, in the Top 1000.

While more than half of the Top 1000 retailers offer buy now, pay later, the top retailers differ in which  pay-in-installment vendor they offer. 18.3% of Top 1000 retailers offer PayPal credit, one of PayPal’s versions of BNPL, 14.7% offer Affirm, 13.3% offer Klarna, and 11.9% offer AfterPay, with other services coming in behind. 18.9% of retailers offer multiple BNPL vendors.

Jewelry, automotive parts, and apparel retailers are the most likely to offer BNPL, while food and beverage companies are the least likely, according to Top 1000 data. 

Other BNPL insights from Cyber 5

BNPL payments vendor Klarna said orders from U.S. consumers increased 29.5% on Black Friday over the previous year. Klarna customers were most likely to use the service to purchase consumer electronics, the vendor said in a Cyber Monday data report. Headphone purchases using Klarna were up 465.4% over the previous Monday, and computer monitors were up 276.9%.

BNPL vendor Zip said purchases on Cyber Monday using the service grew 21% year over year, and were up 82% over a typical shopping day. Zip recorded a spike in uses between 11 p.m. and midnight Eastern time, up 195% over an average day. 82% of purchases with Zip were made online, the vendor said. Black Friday sales also grew, up 26% over 2022 and 103% over an average shopping day. Like Klarna, Zip reported consumer electronics were the fastest-growing category, up 215%. That was followed by jewelry and accessories at 124%, and fashion at 76%.

Zip users were most likely to shop at Amazon and Walmart, but spent the most money at Best Buy, Newegg, Fashion Nova, and Shein, it shared in a report.

Web analytics firm Similarweb reported in a Nov. 28 release that traffic to BNPL services grew 32% year over year.

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Cyber weekend sales top $10 billion as retailers gear up for Cyber Monday

Mary Meisenzahl — Mon, 27 Nov 2023 17:30:26 +0000

Retailers have plenty to be grateful for this holiday season: Cyber Weekend online sales exceeded Black Friday ecommerce sales, according to Adobe Analytics.

U.S. consumers spent $10.3 billion on the Saturday and Sunday following Thanksgiving this year, an increase of 7.7% year over year. Shopping was split nearly evenly across the two days, with $5 billion spent on Saturday, Nov. 25, and $5.3 billion on Sunday, Nov. 26, increases of 8.1% and 6.4% year over year, respectively.

That puts Cyber Weekend slightly ahead of Black Friday’s single day total of $9.8 billion. And the shopping is far from over. Adobe predicts Cyber Monday sales to top Black Friday’s numbers. The firm projects between $12.0 billion and $12.4 billion in online spending on Cyber Monday, which would make it the largest online shopping day of all time.

“An uncertain demand environment pushed retailers to deliver big discounts this season, while also fortifying their ecommerce services with flexible payment methods, better personalization, and enhanced mobile functionality,” said Vivek Pandya, lead analyst at Adobe Digital Insights, in a statement. “Consumers have taken note and spent at record rates during the big shopping days, despite dealing with rising costs in other parts of their lives.”

Online sales and discounts by category

Consumer electronics recorded the highest increase in sales over the weekend, according to Adobe. Electronics sales were up 171% over the weekend compared to average daily sales in October.

Apparel (154% growth), appliances (129%), toys (122%), jewelry (113%), personal care products (90%) and furniture (84%) also recorded significant sales compared to a typical day. Toys were a popular purchase over the weekend, alongside sneakers, activity trackers, smart watches, and TVs, Adobe found. Matthew Katz, managing partner at global management consulting firm SSA & Company, says the beauty category is poised to take off this holiday season.

“There’s some concern that there doesn’t seem to be an ‘It’ product this year—even fashion seems a bit subdued. With Target and Kohl’s heavily invested in beauty, I think the beauty category is going to be a big winner this holiday season. It’s a gift both for others as well as for oneself: a genuinely no-guilt category,” Katz says.

The average discount over the weekend was 29% off retail price, according to ecommerce software vendor Salesforce. General apparel had the highest discounts, averaging 38% off, followed by healthy and beauty at 35% off and activewear (26% off).

However, Adobe says the best deals will likely appear on Cyber Monday for certain categories. Electronics are projected to peak at 30% off on the major sales day, and furniture will also be heavily discounted. Appliances and sporting goods will most likely see even lower prices later in the week.

Consumers embrace BNPL and mobile shopping

Sales from mobile devices continue to rule online shopping so far this Cyber 5 period (the five days from Thanksgiving through Black Friday). 54% of online sales over Cyber weekend were made via mobile, up from 52% last year, Adobe found. They represented $5.6 billion in online spending over the weekend, an increase of 12.7% year over year. Mobile traffic represented 82% of of total retail traffic over the weekend, Salesforce says.

Mobile shopping will likely play a lesser role on Cyber Monday, though, Adobe says. Typically, many consumers are back at work and using laptops by Monday, making that their shopping device of choice.

Buy now, pay later (BNPL) usage was also high over the weekend. Consumers used BNPL to pay for $760 million in online orders on Saturday and Sunday. That’s an increase of 20% over the same period in 2022. It’s a continuation of a trend documented throughout the year, particularly throughout this gift-buying season. BNPL usage since Nov. 1 is up 7% year over year to $96.6 billion in online spending, Adobe says.

Adobe predicts BNPL will drive $782 million in spending on Cyber Monday, an 18.8% increase year over year.

Consumers avoid stores, but they’re open to omnichannel shopping

So far, online growth is exceeding sales growth at brick-and-mortar stores. On Black Friday, online sales grew 8.5% compared to just 2.5% growth in overall retail, according to MasterCard SpendingPulse index. The growth in online shopping may have contributed to slower traffic in stores. “Overall, last Friday was not as frenzied as pre-COVID Black Fridays, but part of that was offset by the increase in digital shopping,” Katz says.

Consumers are willing to leave their homes for a good deal, though. 13.3% of online orders over the weekend used curbside pickup. That’s a slight decline from 15.6% last year, Adobe says. The vendor projects curbside pickup will peak in the days leading up to Christmas Eve, accounting for 35% to 40% of orders on Dec. 22 and Dec. 23.

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Online shoppers want more forms of digital payments

Mark Brohan — Fri, 27 Oct 2023 13:00:53 +0000

Online shoppers are in the mood for new forms of digital payment options. But how fast those changes should occur varies by age group, says new research from finance, procurement and customer service applications developer Esker.

41% of consumers expect retailers and other businesses to adopt new payment technologies once they have been proven and any operational issues resolved. Meanwhile, another 41% expected this adoption to occur within the first year of technology availability.

The panel of nearly 600 consumers finds that 36% of respondents want to adopt new technologies within the first year of availability, such as peer-to-peer payment applications. This percentage increased to 44% when considering the age group of 25-44.

The power of digital payments

Peer-to-peer payments are funds transferred directly from one person’s bank account, checking account, credit or debit card, or payment app, to another person’s bank account, or app.

Younger generations are more likely to let payment processes influence their choice of businesses, says Esker. 59% of Generation Z shoppers say they had opted not to purchase a product or service if they were not offered an online payment option.

Additionally, 33% of consumers switched service providers due to inconvenient or complicated online payment processes. That figure rises to 54% among 18- to 24-year-olds.

“Businesses must embrace online payment technologies that align with consumer preferences,” says Esker U.S. chief operating officer Steve Smith.

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Web shoppers will prioritize their holiday spending

Mark Brohan — Tue, 24 Oct 2023 14:21:06 +0000

The evidence continues to pile up that web shoppers will keep spending online this holiday shopping season.

But shoppers, both online and offline, do have limits, including how much they will spend and where they will spend it, according to new research from the International Council of Shopping Centers.

The survey of 1,007 consumers projects that about 204 million consumers (87%) will head to brick-and-mortar stores this holiday season. Meanwhile, three-quarters of respondents say they plan to make a purchase online and have the items shipped to them. Expected spending is evenly split between online and in-person shopping, with 41% of total expenditures expected to happen at a physical store, compared with 42% online, and 17% click and collect.

Consumers plan holiday spending differently

Consumers anticipate consolidating their purchases across fewer retailers this holiday season. They plan to purchase from an average of 2.4 different types of retailers, compared with 3.4 in 2022. Discount department stores remain the most popular stop for 63% of shoppers. Traditional department stores are the second-most popular destination (34%), followed by electronics stores (22%).

During those shopping trips, most consumers plan to pay with a debit (63%) or credit (50%) card. Nearly half (48%) expect to pay with cash, while 14% will leverage buy-now-pay-later options.

Gift cards remain the most popular category for purchases — an item that’s on the shopping list of 63% of respondents — followed by apparel and footwear (56%), and toys and games (49%). 45% of consumers plan to purchase food, like pre-packaged baskets and alcohol, while electronics and experiential purchases were cited by 41% and 22% of respondents, respectively.

79% of consumers plan to start shopping for the holidays earlier than they normally would. In fact, one in four already started their holiday shopping in August or earlier. Of the consumers who plan to shop earlier for the holidays, 51% do so for the early promotions.

“This year’s forecast shows the industry is balancing itself out after rapid growth over the last few years,” ICSC CEO Tom McGee.

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Ikea adds BNPL late in the game — why?

Gretchen Salois — Tue, 10 Oct 2023 12:45:05 +0000

Buy now, pay later (BNPL) allows consumers to pay for products or services in a series of interest-free installments. Housewares and home furnishings retailer Ikea added the payment option in September 2023.

“We know we’re a little late to the game with BNPL. But we really wanted to see how it was going to play out,” says Christine Briganti, financial services deployment project leader, Ikea

“After looking at BNPL, we’ve structured it in a thoughtful way to service a demographic at Ikea we weren’t serving properly,” Briganti says.

That demographic included consumers that don’t want an Ikea credit card or don’t qualify for one. Ikea already offers a private label Visa credit card that starts at $500.

“We wanted to make sure that the BNPL option wasn’t in direct competition with that,” she says.

Ikea uses Afterpay to offer customers the ability to pay using BNPL for purchases ranging from $40-$500.

Other retailers like Wayfair LLC began offering BNPL in 2016. Amazon.com Inc. in 2018 through Amazon Pay and then through Affirm in 2021, Walmart Inc. offered Affirm in 2019, and Target Corp. through Sezzle and Affirm in 2021.

“We know this is an inflationary time and coming out of this pandemic where people have lost jobs or taken jobs that pay less and they’re maxing out credit cards. We wanted to make sure that if you were not qualified for traditional credit, that this would help the consumer not overextend themselves,” Briganti says.

BNPL vs. credit cards

Unlike Afterpay, consumers that want to use a higher-amount-limit Ikea Visa must go through a traditional credit check and approval process. “Not everyone can qualify for a Visa card,” Briganti says.

“We had been approached by several vendors about offering a higher credit limit change. We might reevaluate in 2-5 years and bump it up,” Briganti says. “But for starting out, we have noticed quite a bit as default rates have gone up with higher limits that we did not want to risk the financial health of our consumers.”

The Ikea shopper is generally 20 to 40 years old, “and that demographic loves technology,” Briganti says. “So, we always wanted to bring BNPL to market. It just took us a while to evaluate what the rest of the market was doing.”

BNPL helps Ikea steer sales

With a lower limit, Briganti says BNPL helps the retailer “steer sales,” she says. “If you were going to buy a living room coffee table and you saw one for $100, but maybe there’s another for $200-$300, you might opt for the higher-priced table if you’re not paying cash for it upfront,” she says.

Jewelry, automotive parts, and apparel retailers most likely to offer BNPL

While more than half of the Top 1000 retailers offer BNPL, the top retailers differ in which  pay-in-installment vendor they offer. 18.3% of Top 1000 retailers offer PayPal credit, one of PayPal’s versions of BNPL, 14.7% offer Affirm, 13.3% offer Klarna, and 11.9% offer AfterPay, with other services coming in behind. 18.9% of retailers offer multiple BNPL vendors.

Jewelry, automotive parts, and apparel retailers are the most likely to offer BNPL. Food and beverage companies are the least likely, according to Top 1000 data.

Ikea is No. 7 in the Europe Database. The database ranks the region’s largest online retailers based on their web sales.

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Adobe forecasts online holiday spending will exceed $221 billion

Mary Meisenzahl — Thu, 05 Oct 2023 20:23:44 +0000

Retail analytics firm Adobe forecasts U.S. online holiday spending will reach $221.8 billion in 2023. That would put spending up 4.8% year over year from $211.7 billion in 2022. Adobe measures the holiday season between Nov. 1 and Dec. 31 based on online transactions.

Mobile shopping will be big in 2023

The Adobe holiday spending forecast predicts more than half of online spending (51.2%) will be made on mobile devices in 2023. That would be a significant increase from 44.88% last holiday season, according to Adobe data.

The analytics firm says mobile spending will hit a record of $113 billion this holiday season, up 13.7% year over year. Mobile holiday spending is projected to be highest on Thanksgiving and Christmas, when consumers are most likely to be spending time with friends and family, Adobe says.

Retailers will offer steep discounts

Adobe says holiday discounts will reach record levels this year, with sales up to 35% off listed prices.

The vendor predicts toys, electronics and apparel will see the highest discounts. For example, toys will peak at 35% off listed price, Adobe says, compared to 34% off in 2022. Electronics discounts will likely hit 30%, up from 25% in 2022, and 25% for apparel, up from 19%.

Cyber Week will be the time when consumers can find the biggest discounts, Adobe says. Cyber Week alone will drive $37.2 billion in online holiday spending, 16.8% of the total season, according to Adobe. That’s up 5.4% year over year. Adobe predicts Cyber Monday will be the single biggest shopping day of the season and the year, with $12 billion in spending.

“Despite an unpredictable economic environment, where consumers face several challenges including rising interest rates, we expect strong ecommerce growth this season on account of record discounts and flexible payment methods,” Patrick Brown, vice president of growth marketing at Adobe, said in a written statement.

BNPL keeps growing

Buy now, pay later (BNPL) is projected to be used as a payment method for more online spending than ever this holiday season. Adobe projects BNPL will be used for $17 billion in online spending, an increase of $2.5 billion and 16.9% over 2022.

November is slated to be the largest month of BNPL usage on record, with $9.3 billion in spending. Adobe predicts $782 million in spending with BNPL on Cyber Monday, surpassing the previous record of $658 million on the shopping holiday in 2022.

BNPL has already shown significant growth in 2023. As of October 2023, U.S. consumers spend $46.7 billion through the payment method, up 14.7% from the previous year. BNPL growth is greatest in the grocery, home and furniture and apparel categories, Adobe says.

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