Brick-and-mortar retailers are having a bit of a panic attack this month. Why? Because retailers make up to 40% of their revenue in the last two months of the year—so if they were seeing flimsy sales and profits before, this is supposed to be the time where they play catch-up.
Except shoppers aren’t really feeling it this year. The National Retail Federation revealed earlier this month that for the first time since 2009, retail sales declined over Thanksgiving weekend. The NRF projected overall spending for the weekend to reach $57.4 billion, down from $59.1 billion in 2012.
Online sales, on the other hand, are having another banner year. Consumers spent a total of $5.3 billion online over Thanksgiving weekend, an increase of 22% over last year, when shoppers spent $4.3 billion online. Cyber Monday, the busiest online shopping day of the year, broke yet another record this year as shoppers spent $1.74 billion online, marking a record for the most dollars spent online in a single day.
All told, consumers are projected to spend $262.3 billion online in 2013 (excluding travel and event tickets), according to eMarketer. That’s up from $225.3 billion in 2012. That number includes mobile commerce as well.
Currently, e-commerce only accounts for one out of every 10 retail dollars spent, but it’s projected to grow significantly in the coming years. By 2017, eMarketer estimates that e-commerce spending will reach $440 billion. But this might be the last year we see an increase in the overall rate of e-commerce growth. E-commerce is expected to grow 16.4% this year, but that growth rate is slowing. Next year, eMarketer only expects e-commerce to grow by 14.6%, and then by 14.2% in 2015.
By comparison, the National Retail Federation expects overall retail to grow by 3.4%, down from the 4.2% growth rate seen in 2012.
Why is retail sales growth such a big ass deal? Because consumer spending accounts for some 70% of the U.S. GDP and is therefore a key driver of economic growth. (To be clear, that doesn't equate to retail. Consumer spending includes food, gasoline, transportation, housing, and medical care, among other things.) Consumers are expected to spend $3.1 trillion altogether on retail in 2013.
Despite the surprisingly sluggish Thanksgiving weekend spending, the National Retail Federation expects holiday spending to grow by 3.9% to $602 billion. Meanwhile, eMarketer expects online holiday spending to grow by 15.1% to $61.8 billion this year.
Mobile is adding a big push to sales. According to IBM Digital Analytics Benchmark’s calculations, mobile accounted for 17% of all online sales on Cyber Monday.
So what will be the top product categories for e-commerce this year? Once again, consumer electronics and computers top the list, with sales generating a projected $57.2 billion this year. That’s followed by apparel and accessories, which is expected to generate $44.6 billion. Content (books, music and video) is expected to rake in $23.2 billion.
E-commerce lord and master Amazon has seen shares skyrocket this year, reaching a record high earlier this month (immediately following Cyber Monday, actually) of $399. So close!