The Holiday Shopping Episode
4:46 min watch - In this episode of Two Curious Minds:
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In 2017 a record 6,700 retail stores closed their doors. For those of you keeping track at home, that’s a new record. It’s no secret that the traditional brick and mortar retail industry is struggling. But the holiday shopping season could help turnaround any retailer's year. Thirty percent of all retail purchases are made between Black Friday and Christmas. That's thirty short days for retail stores to hit their sales targets, or miss the mark. Pressure from online retailers like Amazon, who offer killer deals year-round and convenient shopping from the comfort of your own home, are causing consumers to think digital first. Can this holiday season help save traditional retailers, or is it too late?
Join us on our journey of discovery -- For this very special holiday episode of, Two Curious Minds!
Our Holiday shopping adventure kicked off in Irvine California, home to Orange County's premier shopping destination, the Irvine Spectrum. This year the Spectrum hopes to pull shoppers away from their computer screens with their over the top Black Friday Frenzy event. For the first time in Fratzke brothers history, we decided to join 164 million other shoppers and check out Black Friday. By now you get the Black Friday routine. Retailers advertise huge deals in hopes that it will attract customers to visit their stores and buy stuff, but for some retailers, it might be too late:
Have all closed hundreds of stores this year. Some have even filed for bankruptcy. All of these brands point to increased competition from online retailers as part of the problem. In a recent survey, 59% of holiday shoppers said they would be shopping online this year. And it showed, consumers spent $5 billion online in just 24 hours this year -- up 16.9% compared with Black Friday 2016.
Online versus In-Person Shopping
This year it's estimated that the average American will spend $967 on gifts and other holiday items, but where will they spend it? Online or in-person? Everyone we talked to said a majority of their holiday shopping would be done online this year, but the bad news for traditional brick and mortar retailers doesn't stop there.
A lot of consumers participate in what's called “Showrooming.” Showrooming is when a shopper checks out a product in person but plans to buy it online instead. Showrooming makes sense when you look at the data, 64% of consumers said they plan to use their smartphone to research a product or make a purchase this Christmas. Here’s an example: you’re standing in a bookstore, reading the first chapter of a book, you decide you like it, so you go online with your phone and buy it online instead.
So why do people love shopping online instead of in person? 94% of consumers say that free shipping is the most important factor in deciding where to shop. Only 47% said a convenient location was important. Those two stats help tell this Christmas shopping story. When free shipping is more important than location -- the writing's on the wall.
The real winners in retail will be the companies that can serve consumers in both e-commerce and at brick-and-mortar stores. Look at Amazon, they dominate the e-commerce world with the largest share of U.S. online sales at 43.5%, but what did they do? They bought Whole Foods so they could have a physical presence.
Now think of a traditional retailer like Walmart. They have the physical presence, and they’ve spent a lot of time dialing in their online strategy. As it stands today, Walmart has the 3rd highest share of online sales, just below eBay and Amazon.
Brands that ignore the importance of both channels, brick and mortar stores and e-commerce, will cease to exist.
Thanks for watching/reading this edition of Two Curious Minds. Make sure you subscribe to our channel because every bit helps. While you’re here, tell us what you think about online shopping in the comments below.
Until next time, we’ve been the Fratzke Brothers, and you’ve been awesome.
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