2009 Online Holiday Shopping Season Kick Off – A Retrospective and Some Perspective

The retailing community and the vendors that provide supporting roles, like RichRelevance, have spent the better part of this year gearing up for the make-or-break 24-hour marathon: Black Friday. While consumers haven’t completely abandoned the shopping mall experience, it’s clear that based on early results from the kick off of the holiday shopping season, the area where retailers witnessed the most promising growth across the board was through the online retail channel:

• More Online Shoppers: One-quarter of Americans shopping over the weekend (28.5%) were shopping online according to the National Retail Federation.

• The Gap is Closing Between Online/Offline AOV: Online shoppers spent 35 percent more on Black Friday web purchases than a year ago, with the average order value reaching $170.19, according to Coremetrics. Offline, the average spending slipped 8% to $343.31 per person from $372.57 a year ago according to the NRF.

• Shoppers Are Increasingly Purchasing More Items Online: According to Coremetrics, shoppers bought an average of 5.4 items per order, up 18% from 4.6 items in 2008.

• Early Shopping: Online retail spending for the first 27 days of the November-December holiday season was $10.57 billion marking a 3-percent increase versus the corresponding days last year, according to Coremetrics.

• Black Friday Increases Online: ComScore reported $595 million in online sales, representing an 11-percent increase versus Black Friday 2008.

Close to home, the {rr} team stood at the ready. Demands on performance started on Thanksgiving where sales generated by our personalized product recommendations increased 306 percent between Wednesday the 25th and Black Friday, the 27th. Nearly 40 percent of sales through our network of 40+ retailers was preceded by a click on a recommendation. It was evident that consumers were taking advantage of the personalized product recommendations – perhaps all whilst taking in a football game from the couch (giving new meaning to an “armchair quarterback!”)

All told, our system served more than one billion recommendations against 17.9 million unique sessions on Black Friday alone – a milestone as this was the total number of recommendations we served during the entire Thanksgiving/Black Friday weekend in 2008. This level of activity barely broke a sweat for our infrastructure: a cloud-based system architected on six geographically distributed data centers. At no time was our capacity above 10.5% and we averaged an astounding 56 ms in page load time across all our retailing partners. And while many retailer sites witnessed slowdowns on Black Friday, two of our largest customers, Wal-Mart and Sears, were noted by Keynote Competitive Research to be among the best performing sites on that day.

All these numbers are great but the question that remains is how the balance of the holiday shopping season will play out. While we cannot control what consumers do we can influence their shopping behavior as much as possible using the tools at our disposal – real-time site analytics, targeted email campaigns, great marketing and merchandising. As someone who spent the last decade in e-commerce, starting with Amazon, we can all benefit by taking a page from their playbook in constant obsession with personalizing for each customer across all points of interaction.