E-commerce is helping retailers and the all-important holiday season is turning out to be great for them, with shoppers spending a record online this year. Retail sales increased once again this holiday season, driven by strong e-commerce sales.
An increasing number of Americans are shopping online, which has resulted in fewer people visiting physical stores. Online sales have been on the rise for the past few years, which has also been giving a boost to the retail sales during the holiday season.
Online shows the route
According to a report by Mastercard, e-commerce has been driving retail sales this year once again. Online sales accounted for 14.6% of the total retail sales this year. This reflects an 18.8% year-over-year increase during the all-important holiday season, which is counted from November 1 through Christmas Eve.
Steve Sadove, senior adviser, Mastercard, said, "E-commerce sales hit a record high this year with more people doing their holiday shopping online." Overall holiday retail sales increased 3.4%, excluding auto sales. The National Retail Federation had predicted holiday season sales to hit a record high and increase between 3.8% and 4.2%. This means an average annual increase of 3.7% over the past five years.
Retailers to end year on a high
The retail sector has been suffering for a while now. However, retailers bank on the holiday season, which generates almost 40% of the total annual retail sales. This year was no different with shoppers spending aggressively during the holiday season.
E-commerce once again drove majority of the sales. It was a challenging time for retailers this holiday season given that there were six fewer days between Thanksgiving and Christmas. This saw many retailers investing more on same-day delivery and lockers for store pick-up to make their online presence felt. The last such shortened holiday season was in 2013, when retailers struggled to deliver goods to shoppers in time.
Also, a lot of lot of people shopped online on Cyber Monday owing to inclement weather and heavy snowfall. Traffic at physical stored dropped 1.8%, while online sales grew 6.9%. Apparel retailers benefited the most, with online apparel sales jumping 17%. That said, the end of the year is finally turning out to be good for retailers, with all important shopping days like Thanksgiving, Cyber Monday and Black Friday sales hitting record high this year.