Amazon ranks No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database. It ranks the 100 largest such marketplaces by 2023 third-party GMV.

October sales can cannibalize holiday spending

Big Deal Days pull forward some consumer spending that would otherwise have waited until later in the season, says Neil Saunders, managing director at retail analysis firm Global Data. Some consumers also hold off on purchases and wait for the sale, he said.

45% of consumers said they bought products they’d been waiting to purchase on sale in a survey of 917 Amazon shoppers from consumer market research firm Numerator.

Because consumers plan other seasonal shopping with this sales event in mind, “it doesn’t necessarily increase sales enormously,” Saunders says. “I think because you’re offering discounts, you can get people to buy a little bit more on impulse. Perhaps they divert spending from other areas like travel, entertainment or eating out,” he says.

Many of the purchases made during the sale would still have happened without the sale, just at a later date.

Not all Big Deal Days shoppers plan to make purchases during the major shopping holidays coming up. 58% said they plan to shop on Black Friday, and 57% said they will shop on Cyber Monday, according to Numerator’s survey.

28% of consumers said they purchased holiday gifts during the sale, flat with the percentage from 2022’s Early Access sale. In both 2023 and 2022, 30% of shoppers told Numerator they completed at least half of their holiday shopping during the October sale.

Holiday spending starts earlier

Holiday spending was already moving up earlier in the year, and Amazon’s addition of a second Prime Day solidified the trend. 38% of shoppers planned to start holiday shopping as early as September in 2023, a 25% increase from 2022, according a study from shopping app LTK. LTK conducted the holiday survey on June 30, 2023, with 1,136 of consumers identified as Gen Z and Millennials. 

Sales and holiday-themed marketing events, such as Big Deal Days, push consumers to start shopping earlier in the season, says Kasi Socha, analyst at retail data research company Gartner. Consumers are trending toward shopping for holidays all year long, she says, and Gartner predicts 30% of consumers will shop for winter holiday gifts year-round by 2026.

“I do think that these earlier offers have made the holiday season a bit more complex in terms of shopping because it does put a dilemma on consumers as to whether to buy now, or to try and wait until later in the hope that the discounts might be deeper,” Saunders says.

Consumers are also more selective on spending discretionary income thanks to inflation and price increases, so they’re not necessarily jumping on any type of discount. Spreading out holiday purchases over a longer period can make them fit into a budget more easily.

“They have particular things that they want to buy; they have particular price points,” Saunders says.

Consumers are looking for sales on products that they’re already planning to buy in the holiday season. 60% of items purchased through Amazon sold for under $20 as of 1 p.m. ET, according to Numerator. Just 4% of purchases were more than $100.

Competing retailers like Walmart might not see huge gains from early holiday spending

Amazon’s competitors historically hold competing events with the retail giant’s prime sales. Walmart, for example, held its Holiday Kickoff sale during the same time period as Big Deal Days, and did not limit it just to Walmart+ members. In July, the first Walmart+ Week coincided with Amazon Prime Day in July. Both retailers held online sales across different categories of merchandise. Target held a comparable Circle Week the first week of October, and Costco held Member Savings Days. 

“While there may be a little bit of loss of market share from other retailers to Amazon, I feel that the big guys like Walmart and Target can certainly hold their own in this, and they’re pulling out the stops to take share from others in the market,” Saunders says.

Some retailers may see incremental gains in market share, but there are unlikely to be large changes, he added.

One-third of Amazon shoppers said they also plan to shop Walmart’s sale, and 27% said they’d made purchases during Target Circle Week, according to Numerator’s survey.

For Amazon, though, sales so far are well ahead of last October’s Prime Early Access Sale, Numerator analyst Amanda Schoenbauer says.

“Even if the event doesn’t top Prime Day highs, it still appears to be a highly lucrative sale for Amazon that we expect to see again in the future,” she says.

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Amazon is betting that Prime members will spend heavily on deeply discounted items. It looks to lure web shoppers in with deals that range from seasonal decor starting as low as $6 to invitation-only deals like 60% off 50-inch smart TVs and savings on brand names such as up to 50% off Sony products and 30% off Lego items.

But exactly what Prime members are looking to purchase and how much they will spend will vary widely by age, income, and other factors, says new research from market research company Numerator and industry survey.

Amazon is No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database. It ranks the 100 largest such marketplaces by 2023 third-party GMV.

Amazon Big Deal Days closely precede holiday sales period

Nearly one-third of all consumers are expected to shop online during Amazon Prime Big Deal Days. While those won’t be as big as the 37% of consumers that shopped and bought this summer during Amazon Prime days, Prime Deal Days will “bring a significant boost to ecommerce sales in general, “with the first day of the sale potentially surpassing Cyber Monday in online shopping,” Numerator says.

Other research firms also suggest that while Amazon Prime Big Deal Days will generate big business for Amazon and other big chain retailers this week, many budget-conscious shoppers will choose to shop later and closer to online retailing’s biggest days: Black Friday and Cyber Monday.

Nearly half (44%) of consumers who plan on shopping during the 2023 winter holiday season say they plan to do so during a preseason sales event like Amazon Prime Big Deal Days, says research firm Mintel.

Shoppers remain budget-conscious

But Black Friday and Cyber Monday remain popular (45%) as consumers’ budget-focused mindset continues, says Mintel.

“Over a quarter (28%) of winter holiday shoppers agree that it is even more critical to shop on Black Friday or Cyber Monday because of inflation/rising prices,” Mintel says. “When asked how inflation impacts their spending, 42% of winter holiday shoppers say they purchase fewer gifts, while a quarter (24%) say they switch to lower-priced retailers.”

Even with Amazon and other retailers pushing big deals and deep discounts this week, consumers may remain more budget-minded than in earlier years, Mintel says. Three in five (59%) consumers who plan to do winter holiday shopping in 2023 say they want to spend the least amount of money possible, says Mintel.

“Consumers will participate more in preseason shopping sales, such as Amazon Prime Day, to take advantage of the deals and discounts,” says Mintel retail and ecommerce analyst Brittany Steiger. “They remain value-conscious and look to spend as little as possible.”

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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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A prime example is buying flowers for Valentine’s Day, says Katie Hudson, content director at online flower retailer UrbanStems.

UrbanStems sells about five times its typical volume in the week leading up to Feb. 14, Hudson says. During this week, a large share of UrbanStems.com browsers are looking to buy and will convert on any page on UrbanStems.com, even the pages without the conversion-driving features the retailer added to help with year-round sales, like a countdown timer.

“The week of Valentine’s Day, the intent to purchase is so high that we’ve seen — and we’ve tested this a few times — we’ve seen people convert better on our normal shopping experience for that week because they don’t even need to know our story,” Hudson says.

But when online shoppers aren’t converting as well as retailers would like, merchants must determine what data they can use to guide shoppers to the right products. They also must identify improvements they can make to their site experience to lead shoppers to convert. Improving conversion rates is an ongoing process. Four retailers share how they’ve improved their web experience and marketing tactics to boost their conversion rates, such as by creating a faster checkout page and surfacing more engaging on-site search results.

64% of retailers said they improved their conversion rates in 2022 compared with 2021, according to a Digital Commerce 360 retailers survey of 73 online merchants in February 2023. Additionally, 22% maintained their conversion rates year over year, and just 14% had declining conversion rates. Most retailers surveyed had conversion rates of 1.51% or better.

Better than “normal.” Enhanced site tools are conversion drivers

UrbanStems is always monitoring its conversion rate, and it continually tests design features to improve conversion, Hudson says.

The “normal shopping experience” on UrbanStems.com is the baseline pages running on Salesforce’s ecommerce platform. UrbanStems also runs design feature experiments using web design vendor Zmags’ Fastr Frontend interface, which connects to the platform via an application programming interface.

The vendor allows Hudson to add new pages or custom-designed sections of pages to UrbanStems.com that aren’t limited to its ecommerce platform’s template, rather than submitting a ticket to the retailer’s web developers each time she wants or needs to make a change.

Some of those changes include adding a countdown timer, updating promo codes in real time, and the use of an inventory badge that indicates how many units of a product are available. Each change helped UrbanStems improve its conversion, Hudson says.

UrbanStems created a specific landing page with a countdown timer for Valentine’s Day for shoppers visiting the retailer after clicking on a Facebook or Instagram ad.

The UrbanStems website shows shoppers flower arrangements with the highest conversion rate first.

Flower retailer UrbanStems shows shoppers visiting from Facebook and Instagram marketing language for shoppers unfamiliar with the brand.

When UrbanStems tested a Zmags landing page versus its normal shopping product listing page, the Zmags landing page always had a higher conversion rate compared with the normal shopping page, Hudson says. Now, she tests one Zmags frontend page versus another to see how well different creatives lead shoppers to convert.

In addition to using Zmags, UrbanStems also uses Contentsquare, a digital experience analytics platform, to gather additional shopper data. Contentsquare offers a heat map that allows Hudson to see where shoppers are clicking on UrbanStems.com.

“Are people clicking more on this orange bouquet that’s $70, or are they clicking on this pink bouquet that’s $70?” Hudson says, adding that she tries “to get a sense of where people are gravitating. If we’re seeing a super-low clickthrough rate, we will update the creative in some way. Overall, we’re always monitoring conversion rate.”

Got a hunch? Time to test new features

Valentine’s Day accounts for a large chunk of annual revenue at UrbanStems. But outside of peak seasons, Hudson tests pages and market products based on hunches and trends.

One test Hudson conducted was based on delivery dates. Many of the products on UrbanStems.com are tied to a particular delivery date. Because of that, shoppers might see that certain bouquets are unavailable until a week or two after the date they browse the website. If a bouquet is unavailable, it automatically gets pushed down on the UrbanStems product listing page. But Hudson had a hunch that shoppers might not be as concerned with the delivery window. If that were true, the retailer could show top sellers at the top of the listing page regardless of the availability date, rather than expecting shoppers to scroll to the bottom of the page to find them.

“You might come to one of our landing pages and then see the peony bouquet, and then you can click it and be like, ‘Oh, I can’t get it until Feb. 21,’” Hudson says. “But what we tested was even if that was the case, we were driving a higher conversion on the landing pages where we were not tying our inventory to delivery date. It was allowing us to put the best-looking bouquets or the top-selling bouquets front and center.”

Displaying prices with discounts included spikes conversion

Wow Skin Science also added new features to its site to help with conversion. The personal care brand noticed shoppers were leaving at checkout after adding items to their carts, says Sudeep Bansal, vice president of growth.

After surveying shoppers, Bansal discovered shoppers expected their promotions to be applied to their cart before checking out. When they didn’t see the promotion applied before checkout, they would abandon their cart — and they wouldn’t return to it.

“So we introduced a widget in the cart where the offer that’s available for the customer is visible, loud and clear,” Bansal says.

“The customer could just apply that offer and move forward in the journey. We saw a significant delta in conversion rates for that,” Bansal says, declining to share the retailer’s conversion rate.

To further improve the customer experience, the site autofills a shopper’s address during the checkout process. It also provides easy navigation on the homepage so shoppers can get to the products they want quickly.

“One challenge we see is there’s too much information available on the internet today,” Bansal says. “When people come on our site, they get confused on what they want to buy. We have about 500 different SKUs listed on the site, and when the customer comes in, the customer doesn’t really know what is the right product for [them].”

Wow Skin Science alleviates this with its beauty quiz. It asks shoppers for information such as:

• Age
• Skin type
• What scent the shopper prefers
• What the shoppers’ concerns are

After finishing the quiz, shoppers receive a personalized suggestion of individual Wow Skin Science products to try as well as skincare kits. Conversion rate is higher on personalized product suggestions shoppers receive after taking the quiz, Bansal says. He attributes the increase in conversion to shoppers trusting that the suggested products will work for them. Shoppers are also given the option to automatically filter the website’s product listing page based on what the shopper filled out in the beauty quiz.

Don’t make it hard for a customer to give you money

Wrist Mafia also noticed shoppers were abandoning their shopping carts. It improved its conversion rate after optimizing its landing pages and improving checkout speed, says CEO and founder Johnny Brown. Wrist Mafia is a subscription-based retailer that allows customers to receive a new watch. The subscriptions it offers are monthly, every three months, bi-annually or annually.

Wrist Mafia’s previous interface, ReCharge, made shoppers leave the retailer’s Shopify-hosted site to complete the payment process. ReCharge had a separate processor and application built on top of Shopify, rather than an interface that integrates directly into the platform, Brown says. Shoppers couldn’t use Shop Pay or Google Autofill forms during checkout, which decreased conversion, Brown says, without sharing specifics.

“If you have to go through six pages to check out, you’ll lose most of those customers,” he says. “We did.”

Wrist Mafia’s customers can now check out in less than 10 seconds, he says, down from two to three minutes. That checkout speed improved after the retailer implemented subscription-management vendor Ordergroove’s interface in September 2022. Ordergroove helped reduce the number of pages shoppers had to navigate to subscribe by three pages, Brown says.

And to acquire new subscribers, Wrist Mafia heavily discounts the first watch in the subscription, Brown says. That discount for the first watch is the best available price other than during the Cyber 5. Cyber 5 refers to the period from Black Friday through Cyber Monday.

This conversion-driving tactic also helped Wrist Mafia grow to about 11,000 subscribers at its peak in early 2022, up from about 2,000 subscribers at the beginning of the pandemic.

Within three months of implementing Ordergroove, Wrist Mafia grew its subscriber base 63%. Its subscribers can pay monthly or prepay for three- or six-month subscriptions.

UrbanStems, Wrist Mafia and Wow Skin Science all share a similar theory in their approaches to improving their conversion rates. Make it easy on the shopper. The three merchants have improved their conversion by improving the shopper experience. And they did that by making it easy to find products and pay for them.

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This is part of Digital Commerce 360’s March 2023 Strategy Insights edition. Our members have access to all the articles in this month’s issue, Data-Driven Retail.

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Bad weather will spur an additional $13.5 billion in U.S. online spending this year, Adobe Inc. said in a report Wednesday. That’s up about 3% from last year. The study, the first of its kind by the software provider and its ecommerce research unit, is based on an assessment of past shopping patterns combined with data on rain, snow and wind compiled by The Weather Co., a unit of IBM Corp.

“A modestly rainy day can push more people to shop on their phones or computers,” Adobe said.

Using the findings to boost online sales further

The findings could help brands and retailers predict shopper behavior more accurately, Adobe says. The information could be a new tool as spending migrates online. The exact effects will depend on the exact weather conditions, and the impact is sprinkled throughout the year. But Adobe estimates the cumulative total of sales sparked by bad weather outweighs Cyber Monday, the largest online shopping day of the year, which generated $11.3 billion last year.

“We see this as having massive implications for brands across the country,” said Vivek Pandya, an analyst at Adobe. He added that reacting to weather can help companies fine tune their promotions and supply chains. “We always assume weather has some impact on spending levels and behavior. This has been really able to show the magnitude.”

Some of the gains occur when bad weather prompts shoppers to stay home, which has traditionally eroded brick-and-mortar stores’ revenue. But now, homebound consumers purchase goods with money they would have otherwise spent on services such as eating out, boosting ecommerce totals.

“It’s uncommon to see this kind of effect shine through the data so clearly,” said Costa Lasiy, another Adobe analyst.

Adobe concluded that:

• Rain provides the biggest online sales boost, accounting for $8.7 billion. The effect peaks when there’s rainfall of 0.8 to 1 inch (2.5 centimeters), which would typically mean three hours of heavy rain. And the shopping gains are particularly strong on weekends and in the fall.
• Wind is expected to lift online sales by $4.4 billion, but it only helps up to a point. Speeds of more than 25 miles (40 kilometers) an hour cause ecommerce to wane as the wind grabs people’s attention. There are also regional differences. Strong winds cause ecommerce to drop in Atlanta, while shoppers in Chicago keep spending through the same conditions.
• Snow accounts for a small boost, with geographic variations. In cities with low snow totals, such as Austin, Texas, and Charlotte, North Carolina, even a little drags down sales as consumers focus on the weather. In cities such as New York and Seattle, snow prompts people to stay home and shop more online.

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Ecommerce spending topped $3 billion a day on 38 occasions during the 2022 holiday season. Only 25 days topped $3 billion in digital sales during the 2021 season.

Adobe had reported earlier that online shopping during Cyber 5 — the period from Thanksgiving to Cyber Monday — grew 4% year over year to $35.27 billion.

Discounts attracted online shoppers

Across major ecommerce categories, discounts hit record highs this holiday season. Discounts in toys peaked at 34% off listed price (versus 19% in 2021), as well as electronics at 25% (vs. 8%), according to a statement from Adobe Inc. Discounts were also strong across other categories including:

• Computers at 20% (vs. 10%)
• Apparel at 19% (vs. 13%)
• Televisions at 17% (vs. 11%)
• Appliances at 16% (vs. 4%)
• Sporting goods at 10% (vs. 6%)
• Furniture at 8% (vs. 2%)

“At a time when consumers were dealing with elevated prices in areas such as food, gas, and rent, holiday discounts were strong enough to sustain discretionary spending through the entire season,” said Vivek Pandya, lead analyst at Adobe Digital Insights, in a written statement. “The big deals drew in consumers and drove volume, helping retailers who were challenged with oversupply issues, particularly in categories such as apparel, electronics, and toys.”

Inflation’s impact on ecommerce

Strong consumer spending online has been driven by net-new demand, and not simply higher prices. The Adobe Digital Price Index (DPI), which tracks ecommerce prices across 18 categories, shows prices online have been falling year over year since September 2022. Adobe figures are not adjusted for inflation, but if online inflation were factored in, there would still be growth in underlying consumer demand.

Toys drove online holiday sales

Online sales of toys jumped 206% compared to pre-season levels in October 2022. Top-selling toys this holiday season included Legos, Hot Wheels, Paw Patrol, LOL Surprise, Squishmallows, Bluey and Cocomelon.

Other categories with substantial jumps in online sales during the holiday period included video games (up 115%) and apparel/accessories (up 94%).

Subcategories that saw strong demand in online holiday shopping:

• Watches (up 108%)
• Baby toys (up 101%)
• Gift cards (up 98%)
• Cosmetics (up 90%)
• Outdoor grills (up 86%)
• Speakers (up 76%)
• Smart home products (up 67%)

Additional insights: Online holiday shopping

• Mobile shopping: This holiday season, 47% of online sales came through smartphones (up from 43% in 2021). Christmas Day (Dec. 25) set a new mobile record, driving the majority of online sales at 61% (up from 58%).

• Buy now, pay later (BNPL): In the holiday season overall, BNPL orders rose 4% when compared with 2021. However, revenue decreased 2%, indicating shoppers are increasingly using BNPL for smaller shopping carts.

• Curbside pickup: The fulfillment method was used in 21% of online orders this holiday season (for retailers that offer the service), down slightly from 23% in the year prior. From Dec. 22 to Dec. 23 (right before Christmas Eve), curbside pickup peaked at 42% of online orders, with anxious shoppers using the service to get gifts in time.

• Marketing channels: Paid search remained the biggest driver of sales for retailers this holiday season (29% of online sales attributable to that channel). Direct web visits (19%), organic search (17%), affiliates/partners (16%), and email (15%) were also major contributors. Revenue directly attributable to social media remained at less than 3% of total sales this season, but that share has grown 24% YoY.

Methodology

Adobe’s analysis covers more than 1 trillion visits to U.S. retail websites, 100 million SKUs, and 18 product categories. Adobe Analytics is part of Adobe Experience Cloud, which is used by more than 85% of the top 100 internet retailers in the U.S. listed in the Digital Commerce 360 Top 500 Report.

2022 Top 500 Report

Analysis of North America’s leading 500 online retailers. Includes over 100 charts, rankings by 2021 web sales, benchmarking data, growth analyses by category and merchant type, and an executive overview on the current state of ecommerce. 

View Details

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It was that kind of year. Neither earth-shattering nor dismal. Neither ground-breaking nor a return to the norm.

We got the first indications of this in January. The COVID-19 pandemic wasn’t over, but the retail industry was pretty eager to act as if it was. The National Retail Federation planned a return to the real world for its Big Show. But just days before attendees were due to arrive, coronavirus cases spiked in New York and the keynote speaker — Honest Co. founder, actor and celebrity Jessica Alba canceled. Still, the show must go on, as actors say. The Big Show did come to New York. But not many attendees did.

There was another indication back in January that 2022 would be less than remarkable. The big business story in retail that month was that Kim Kardashian’s underwear label Skims had doubled its valuation to $3.2 billion in nine months. That suggested innovation in 2022 would involve attaching a celebrity’s name to a version of an actual innovation from two decades earlier.

By February, there was a throw-the-spaghetti-against-the-wall-and-see-what-sticks air about the entire retail world. Target Corp. offered Starbucks beverages as part of its curbside pickup. Peloton, Home Depot, Wish.com and Shipt all decided to try new CEOs, and Amazon laborers — who hadn’t had much luck working with the giants of organized labor — decided to organize themselves.

Then, on Feb. 24, Russia invaded Ukraine.

In the following weeks, the retail world behaved admirably. Toy companies became symbols of the resistance, while major companies around the globe cut ties to the Russian economy. In the meantime, there were other ominous signs for ecommerce. A global supply chain crisis was poised to worsen. And inflation for the year ending March 2022 hit 8.5% — the largest 12-month increase since 1981.

By April, the bad news had everyone in ecommerce worried that things were falling apart. Everyone seemed to be losing money and/or going deeper into debt. Buy-now-pay-later options grew popular with shoppers and retailers. Amazon.com Inc., No. 1 in Digital Commerce 360’s Top 1000, posted a $3.8 billion loss. Bed Bath & Beyond said its net sales fell 22%. Young adults borrowed money and engaged in crypto speculation, and Etsy sellers went on strike.

April showers are supposed to give way to May flowers. But in 2022 … not so much. The bad news continued. Surplus inventory levels soared. Ecommerce growth continued to slow. Wayfair Inc., No. 7 in Digital Commerce 360’s Top 1000, announced a hiring freeze. EBay’s sales fell and Target’s earnings plummeted. In the meantime, the spaghetti-against-the wall craze continued as Amazon started subleasing warehouse space while opening a clothing store, just as Walmart announced plans for delivery by drone.

In June, things grew darker. Bed Bath & Beyond’s CEO stepped down as sales fell further. So too did the CEO of The RealReal, No. 40 in the ranking of Digital Commerce 360 Top 100 Online Marketplaces. Meanwhile, Apple and PayPal both made it easier for shoppers to go deeper in debt.

July was supposed to be a time of great excitement in ecommerce, as Amazon held its Prime Day sale. But shoppers were underwhelmed. As if in response to the disappointment, Amazon announced a drop in ecommerce sales (albeit for the quarter before Prime Day), Shopify slashed its workforce, and soaring inflation pushed consumers to amass BNPL debt to pay for groceries.

In August, things grew both darker and brighter. Best Buy, No. 6 in the 2022 Digital Commerce 360 Top 1000, said U.S. online sales dropped 14.7%, while Macy’s said its Q2 online sales fell 5% and multiple retailers struggled to unload excess inventory. By contrast, Walmart said its online sales rose 12% in the second quarter, albeit largely because of inflation. Overall ecommerce numbers grew, but at a pace that was well below what the industry had grown accustomed to. U.S. ecommerce spending in Q2 marked its fourth straight quarter of single-digit growth following the 45%-50% jumps during the first year of the pandemic, according to a Digital Commerce 360 analysis of U.S. Department of Commerce figures.

The industry responded once more by throwing pasta against the wall. Peloton said it would sell on the Amazon marketplace, and Walmart added streaming video to its membership program.

In September, things turned macabre. Bed Bath & Beyond’s chief financial officer died by suicide. Shortly before that, the world learned that Chewy founder and activist investor Ryan Cohen — who had driven Bed Bath & Beyond shares higher during the meme stock craze — had sold his entire stake in the retailer. Shares fell 40% in the wake of Cohen’s action. Unsurprisingly, Bed Bath & Beyond soon announced it had another dismal quarter.

By now, the pattern was clear. Times are tough; pasta must be thrown. So Amazon announced it would have another Prime Day sale. Meanwhile, Kanye West severed ties with the Gap, suggesting that in 2022 true innovation might mean removing a celebrity’s name from someone else’s innovation.

In October, the ecommerce world watched as that second Prime Day — dubbed the Amazon Prime Early Access sale, in a sign that in 2022 true innovation might mean changing the name of an earlier innovation — fizzled.

Meanwhile, in a particularly disturbing development, online prices for food hit a new record high. Then, in a move that no one thinks would help those prices fall, The Kroger Co. said it had agreed to buy rival Albertsons Cos. Inc. for $24.6 billion.

As October ended, Digital Commerce 360 warned that “online retailers again will have a tough go of it this season, trying to convince shoppers who are contending with inflation and recession fears not to skimp on their gift lists.”

November, of course, is when the hopes and fears of all of ecommerce converge in the Cyber 5 period. Early in the month, there were some pieces of bad news that suggested Cyber 5 results might prove disappointing. Alibaba Group Holding Ltd. decided not to disclose full sales results for its signature Singles’ Day shopping festival for the first time, after forecasts that the figure may suffer a decline unprecedented in the event’s 14-year history. Alibaba owns and operates Taobao and Tmall, which hold the No. 1 and No. 2 spots in the ranking for Digital Commerce 360 Online Marketplaces. And Singles’ Day is the world’s largest shopping festival.

Meanwhile, Amazon said it planned to cut about 10,000 jobs — the largest ever headcount reduction at the ecommerce giant as it braces for slower growth and a possible recession.

Yet December — like 2022 itself — saw the release of news that was both good and bad. Cyber 5 results, the effects of inflation, struggles over supply chain and inventory levels, all proved to be neither earth-shattering nor dismal. Neither ground-breaking nor a return to the norm.

Early in December, the industry learned that web sales grew 4% to reach $35.27 billion in the Cyber 5, or the five-day period of Thanksgiving through Cyber Monday, according to Adobe Analytics. Amazon and Walmart were the big winners. That news came just days after the U.S. Commerce Department said the value of overall retail purchases dropped 0.6% in November — the largest decline in 11 months.

Also in December came the piece of news that most perfectly summed up the entirety of 2022 in retail. Celebrity Justin Bieber blasted H&M for what he called the “trash” of the all-new Justin Bieber-themed merchandise sold by H&M, suggesting that the biggest innovation of 2022 involved attaching a celebrity’s name to innovations they don’t like.

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92% of Poshmark marketplace members are open to receiving secondhand gifts — but only 33% of people would shop secondhand for their gift-giving needs today, according to the 2022 Poshmark Trend Report: Holiday Edition. Research company Morning Consult conducted a survey based on Poshmark’s 80 million members comparing Sept. 11-18, 2022, with the same period in 2021.

Steven Tristan Young, chief marketing officer, Poshmark

“There is a gap between what we think our friends and family are open to receiving versus what they actually want,” Young said. “A great way to overcome that is to talk about secondhand gifting with loved ones.”

Younger shoppers are more open to secondhand gifts, according to the report. 55% of Gen Z consumers said they are likely to buy secondhand gifts for their friends and loved ones this holiday season.

Consumer perception of gifting pre-owned merchandise is changing. Secondhand merchants are working to make it easier to shop for used products online. Poshmark launched a sale for the first time during the Cyber 5 period, and online consignment store ThredUp debuted a secondhand holiday collection for the first time.

Plus, apparel merchant Patagonia reported record web traffic when it promoted its secondhand collection on Cyber Monday. Browser extension Beni continues to add resale merchants to its client roster as demand for an easier way to search grows. And luxury goods reseller Rebag said shopper demand is booming for hard-to-find brands. But, while resale continues to grow as an online category, a lingering reluctance to gift used merchandise continues.

Resale’s lower price point appeals to a budget-conscious consumer

Currently, buying used is not a top choice for consumers. 9% of survey respondents said they shop secondhand for apparel, accessories or shoes online on sites like Poshmark, ThredUp, The RealReal and others, according to a Digital Commerce 360 and Bizrate Insights survey which compared 1,064 online apparel shoppers in Sept. 2022 and 1,049 respondents in May 2021. That’s up 1 percentage point compared with 2021 when 8% said they shopped for secondhand apparel online.

But the reluctance to buy secondhand is changing, says Liza Amlani, principal and founder of The Merchant Life, a retail consultancy. Consumers are spending but want to stretch their dollar and spend less overall, she says.

“Resale is becoming more of a giftable option due to price point accessibility,” Amlani says.

Consumers are also increasingly interested in sustainable products, especially younger consumers who are already shopping and selling on Poshmark or ThredUp, Amlani says.

43% of shoppers noted sustainability as a deciding factor in what they buy, according to luxury goods resale marketplace The RealReal’s 2022 Luxury Resale Report, which measured data from 28 million of its shoppers between January and June this year compared with the same period in 2021.

Resale is growing in popularity both in the U.S. and worldwide, according to the 2022 ThredUp resale report. ThredUp projects total U.S. secondhand sales, which include resale, traditional thrift and donations, will more than double by 2026, reaching $82 billion, according to the report. The report is based on a survey of 2,500 U.S. consumers in January 2022. Resale alone is expected to reach $51 billion by 2026.

In 2021, resale sales grew 58% year over year, the highest in five years, according to the report.

Secondhand Sunday and secondhand fashion lines

Poshmark launched the event Secondhand Sunday on Nov. 27, 2022, to encourage shoppers to buy secondhand products. This was the Sunday of Thanksgiving weekend. Poshmark created a separate landing page on its website. It included a video, resale statistics, Poshmark seller profiles, and links directing shoppers to resources. A Poshmark Instagram post noted holiday promotional dates, the holiday trend report, and an explanation of how the reselling process works.

Poshmark launched the event Secondhand Sunday on Nov. 27, 2022, to encourage shoppers to buy secondhand products.

Poshmark recorded a 29.7% increase in the number of listings sold for vintage items between Nov. 24-27, 2022, compared with Nov. 25-28, 2021. The number of toy listings increased 50.3% during the same timeframe year over year.

According to Morning Consult data, vintage items, books, home items, jewelry/watches, furniture, and luxury items are top categories consumers are open to receiving as secondhand gifts, Young said. Men are more open to receiving resale electronics, while secondhand shoes are popular among younger shoppers, he said.

Resale for the holidays

While Poshmark does not ask shoppers if something is a gift, Young said the merchant does pay attention to categories that are known for being popular gift items, such as handbags, jewelry and toys.

“When we see notable increases in these ‘gift-friendly’ categories, we attribute some of that to holiday gift shopping,” Young said.

In 2022, handbags and vintage item listings increased 12.2% during the Thanksgiving through Sunday holiday weekend. Used book listings also increased 12.8% year over year, Young said.

ThredUp promoted its holiday Zero Waste Daniel Full Circle collection, which is made entirely of secondhand 1990s-inspired clothing. The resale marketplace featured actress Fran Drescher to bring the “trash-to-treasure” collection, promoting gift-giving on a budget. Prices start at $10. Most items fall into a $20-$60 range and as high as $600 for items like coats. ThredUp did not disclose how the sale performed.

An easier way to search resale

Another way to promote online resale shopping is to make it easier for shoppers to find used products, says Beni CEO and cofounder Sarah Pinner. Demand is growing for startup Beni’s browser plugin, which shows shoppers resale products in real time based on the consumer’s web browser search, she says.

Sarah Pinner, cofounder and CEO, Beni

“I think [the concept of resale] is hitting a bit of a tipping point where there’s less stigma around shopping secondhand for the holidays,” Pinner says.

Currently, approximately 4,000 consumers use Beni to shop for secondhand goods online. The web browser extension is available for desktop Safari and Google Chrome. The plugin is also available for Safari on mobile devices.

If a consumer has the Beni plugin on her web browser and she is looking for a black dress on any apparel site, like Macys.com, Beni will display similar secondhand options at the top of the webpage from more than 30 resale sites. If a shopper clicks on one of the items, she is then redirected to that reseller. Beni earns an undisclosed commission on each sale.

“Our goal is to build [Beni] together with the resale marketplaces that have done a lot of the heavy lifting to get all this amazing inventory online,” Pinner says. “Our goal is to make buying resale as easy as buying new.”

By simplifying the resale product search process, Beni hopes to normalize shopping for secondhand merchandise, Pinner says.

Patagonia joins Beni

In December, Patagonia began its pilot test run with Beni. Beni sells used products from the retailer’s online Worn Wear store.

Asha Agrawal, head of corporate development, Patagonia

“We’re going to see if [selling through Beni] is a way to bring awareness to our reused goods,” says Asha Agrawal, head of corporate development at Patagonia.

The outdoor apparel and goods retailer is looking at different ways to market its secondhand products beyond using the Patagonia brand, such as via the Beni platform, Agrawal says.

But it’s also using the power of its well-established Patagonia brand. Patagonia typically refrains from promoting its brand during the holidays. But on Cyber Monday, Patagonia.com redirected shoppers to the retailer’s resale Worn Wear website. Patagonia offered shoppers a 20% discount on anything purchased through its resale online store.

The event was a success, Agrawal says. Cyber Monday 2022 was the Worn Wear website’s second most popular web traffic day since the Worn Wear online store launched in 2020. In 2020, Patagonia.com shoppers could click on a button located on Patagonia’s main website landing page that led to the Worn Wear store. 2022’s strategy automatically redirected web traffic to Patagonia.com to www.wornwear.patagonia.com.

This year, 70% of all Worn Wear Cyber Monday online sales were from first-time customers, Agrawal says.

Resale is an opportunity to buy hard-to-find products

Shoppers on the hunt for “unicorn” items — sold out, hard-to-find luxury handbags or accessories — can turn to Rebag, a luxury reseller of handbags and accessories. In this case, resale doesn’t always mean reduced price.

Charles Gorra, founder and CEO, Rebag

The reseller prepared for the holidays earlier this year and launched its 2022 gift suite in late October instead of November, said Charles Gorra, founder and CEO of Rebag.

“Given that each item in Rebag’s inventory is unique, and many styles are limited edition, sold out in the primary market or generally difficult to obtain, we typically see shoppers looking to procure gifts early on,” Gorra said, without revealing more.

Rebag’s holiday Gift Suite gives shoppers options

Rebag’s 2022 holiday Gift Suite gives shoppers a range of categories to choose from. This includes “investment pieces” like the Hermes Constance Bag Epsom 24, a used handbag in “great” condition for $15,170. The retail price for the new product was $11,400 in 2022.

Shoppers also have the option to buy and sell in one transaction through Rebag’s Trade program. Rebag sellers can bank the money from sold items to use toward other Rebag purchases.

Shoppers search Rebag for rare items like Telfar-brand handbags. These can cost $200-$320 when purchased new. Certain styles can cost more than $900 on resale sites for coveted styles like the Telfar Round Circle Bag. These bags have an average value retention of 195% because demand outweighs supply, Gorra said. These items appreciate about twice as much as their original retail price because they are in high demand.

“With limited drops, it can be next to impossible to score a Telfar bag on the primary market in the size and color you want,” Gorra said.

While not currently mainstream, resale growth will continue. As more brands launch into resale, consumers will have more opportunities to shop secondhand. Resale merchants hope that by appealing to consumers’ waning budgets and increased interest in sustainability, the stigma associated with secondhand shopping will dissipate and become commonplace.

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Vera Bradley typically hires seasonal employees in mid-November, with the last day of their two-week training on Black Friday, says Susan Campbell, director of customer experience. But in 2022, it brought in its 18 seasonal agents two weeks earlier, at the start of November, she says.

Even starting earlier, the retailer had challenges with finding qualified candidates who would want to stay until the end of the holiday season.

“You might find they are fantastic, but they might decide after two days of training that the job isn’t for them,” says Campbell about a situation the retailer faced. “It’s definitely a different world than it has been in previous years.”

In addition to industry-wide staffing shortages, the other challenge Vera Bradley has for retaining customer service agents over the holiday season is that it doesn’t have the budget to offer a “stay bonus,” Campbell says. This is extra compensation some merchants offer to seasonal employees who stay until the end of the holiday season. And so, the merchant has to get creative, she says.

Through its customer service software Nice LTD., it uses a gamification program in which agents can earn points for various tasks. For example, representatives earn points if they fill out their time cards promptly, for attendance or having the highest CSAT (customer satisfaction) rating of the day.

Employees can redeem points for $5-$50 gift cards to Target, Starbucks or Vera Bradley or other Vera Bradley products. This is a great motivator, Campbell says, as employees like to use these as stocking stuffers.

This program also keeps employees engaged with their job, she says. Overall, the merchant finds that agents with the highest CSAT score often correlates to the agents with the most points in the program, Campbell says.

Vera Bradley also motivates seasonal employees with the prospect of a full-time position. The merchant typically has 50 full-time customer service agents it employs as well as 20 “overflow agents,” which also represent its brand, to handle even more inquiries. It currently has a few open positions for full-time employment.

Customer service trends for the 2022 holiday season

During the 2022 holiday season, more consumers have texted in their customer service needs than average, Campbell says.

The volume of inquires Vera Bradley has received from SMS increased more than 100% year over year during the 2022 Cyber 5.

For all of 2022 through Dec. 12, 13% of Vera Bradley’s customer service contacts are from SMS/texting. This is up from 10% of all contacts from SMS in 2021. Campbell says the merchant could finish the year with 15% of contacts from text because it’s been trending so high during the holiday season.

As of Dec. 12, 24% of customer service inquires for 2022 were from email, 23% from live chat, 33% from phone calls, 5% from social media and the remaining percentage from other categories.

Campbell attributes the increase in SMS customer service requests to an increase in younger consumers shopping with the brand. Still, the brand skews older. 46.9% of traffic to its website in 2021 was from shoppers ages 45 and older. That compares with 37.0% on average for all merchants in the Digital Commerce 360 Top 1000, according to data from web measurement vendor SimilarWeb in the Top500Guide.com. Vera Bradley is No. 272 in Top 1000.

Campbell says the No. 1 reason shoppers call customer service is to place an order. When a limited edition product arrives, such as its Christmas ornaments with the year on it, shoppers want to ensure they get the product before it sells out, she says.

Vera Bradley’s customer service channel options and features

Vera Bradley initially launched text as a method to contact customer service in 2018, as it was looking for ways to improve its customer service experience. The brand knew that shoppers don’t want to wait on hold to talk to an agent.

Vera Bradley already had a 1-800 number for customer service and it enabled that number to receive texts. The merchant immediately started receiving texts for customer service help, without it marketing the feature as an option. That meant shoppers had already been trying to text the merchant, but these shoppers were not getting any response because the number was not set up to receive texts and Vera Bradley had no idea.

“You have to be where your customer wants to be,” Campbell says. “The customer is evolving whether you are paying attention or not.”

Other ways Vera Bradley works to keep its call hold time low is to put as much information on the website as possible so shoppers can look for answers themselves, Campbell says.

“A lot of self-service options have helped us tremendously,” Campbell says. “Shoppers will say, ‘I looked on the website, but I didn’t see it.’ They are definitely using the website first, and we are like the second option.’”

And shoppers ask detailed questions. For example, shoppers ask about dimensions of specific pockets to see if their size phone or water bottle will fit. They’ll also ask how many pieces of paper a binder will fit.

A customer service agent responds to an exact dimension request for a water bottle.

To help shoppers, every few days, Vera Bradley creates a ticket for the web team to add these specific questions to the question-and-answer section on product detail pages so other shoppers will know the answer.

Enhanced customer service tools at Vera Bradley

Vera Bradley also allows its VIP shoppers to jump the call queue when they call customer service. For shoppers who spend a high dollar value with the retailer, the Nice In Contact customer service platform can flag those inbound calls and put them to the top of the list.

It also works to reduce call wait times by offering shoppers who call in on a cellphone (as opposed to a landline) the option to switch to live chat. While the shopper is waiting, an automated voice will tell the shopper her current wait time. But if she presses 1, she could immediately chat with one of the available agents. Because Vera Bradley’s agents typically work on three chats at once, there is typically little wait for live chat, she says.

During the year’s slow periods, such as the summer months, Vera Bradley has its agents make “Happy Birthday” calls to its shoppers.

It started these calls on a whim, but it turns out to be a winning initiative, Campbell says. Some of its agents really enjoy doing these calls and will volunteer for them, she says. Shoppers also respond positively and enjoy hearing the message, she says. The merchant also sends a 25% off promotional code via email on shoppers’ birthdays. Those coupons have a 9.6% redemption rate, which is “way higher” than its average redemption rate, Campbell says, without revealing more.

“When a new customer comes to the brand, you want to make sure they are taken care of to the best of your ability,” Campbell says. “You want them to remember that great experience — when it’s your daughter’s birthday or your mom’s birthday — so they are coming back to your brand for those occasions as well.”

And many shoppers do remember. 22% of online shoppers say a past experience with a retailer is one the most important factors when deciding where to shop online for the holiday season, according to a Digital Commerce 360/Bizrate Insights survey of 1,088 online shoppers in September 2022.

Net promoter score improves

Campbell says all these features have helped improve Vera Bradley’s Net Promoter Score, or the number shoppers give when asked, “On a scale of 1 to 10, how likely they are to recommend Vera Bradley to a friend?” While she wouldn’t reveal the actual number, she says it improved by 3.1 points year over year in 2022.

The customer service platform’s features and tools also keep its employees happy, Campbell says. Managers can easily pull reports on how their employees are performing, whereas previously they would have had to ask IT for this request. Agents can also see their customer service rating and how many queries they are responding to in real time and see how it compares to their peers. This real-time data helps create a fun, competitive atmosphere, she says.

After last year’s holiday season, Vera Bradley “took a pulse” on the satisfaction level of its company employees with an engagement score. This metric is sometimes called an E-Sat and measures employees’ engagement level with their job, if they are planning to stay with the company and if they see value in their work. The customer service team E-Sat score improved by five points year over year, which Campbell says was huge.

The post How Vera Bradley motivates seasonal customer service agents appeared first on Digital Commerce 360.

The retailer typically does not promote its products during the Cyber 5 holiday shopping period. That changed in 2022. Patagonia promoted Worn Wear, its online secondhand store, on Cyber Monday. 

Patagonia has historically eschewed promoting its merchandise during the Cyber 5 period spanning Thanksgiving through Cyber Monday. Marketing is typically limited to its in-store repair services on Black Friday, Agrawal says.

“We’ve been anti-consumerist in that way,” Agrawal says. “But we chose to participate in Cyber Monday to say if you’re going to buy something, we will reward you for buying [used].”

On Cyber Monday (Nov. 28 this year), Patagonia.com redirected shoppers to the retailer’s Worn Wear website. Patagonia enticed shoppers with a 20% discount on anything purchased through its resale online store. 

The event was a success, Agrawal says. Cyber Monday 2022 was the Worn Wear website’s second most popular web traffic day since the Worn Wear online store launched in 2020. In 2020, Patagonia.com shoppers could click on a button located on Patagonia’s main website landing page that led to the Worn Wear store. 2022’s strategy automatically redirected web traffic to Patagonia.com to www.wornwear.patagonia.com.

This year, 70% of all Worn Wear Cyber Monday online sales were from first-time customers, Agrawal says. 

Patagonia ranks No. 205 in the Top 1000, Digital Commerce 360’s database of the largest e-retailers in North America.

Patagonia learns how shoppers search for second-hand merchandise

The retailer is tracking how many new customers are buying from its Worn Wear online store and how many will come back. That will be a long-term process, Agrawal says, as the retailer hopes consumers don’t need to buy new items for years. 

“We’re not trying to have customers buy something every few months or even seasonally,” Agrawal says. 

The goal, Agrawal says, is to have customers hold on to gear longer than they might with other resale programs. The average time that someone starts to sell something back to Patagonia is about five to seven years of use, she says. 

Some questions Agrawal says Patagonia reviews include: How long are customers keeping our garments? What can we do to make sure they’re keeping it in good repair during that time? How many new customers are we getting? 

Worn Wear items influence future product design

Agrawal says Patagonia also tries to understand what resale categories people are gravitating toward and why, versus which categories are less in demand.

“It’s fascinating data,” she says. Some items, like Patagonia outerwear jackets and rain gear, resell well, she says. Customers also “can’t get enough” of Patagonia’s bags, especially its black full bag.

“[These items] don’t stay very long on the website. But there are others that just don’t resell as well,” Agrawal says, without highlighting which ones. “We have to think about how to continue to be a responsible business. We want to build things that can have multiple owners — or, if it’s one owner that can [use] it throughout their whole lifetime, and hopefully, generationally after that.”

Patagonia aims to track what items are resold and how old those items are when they’re resold to Patagonia’s Worn Wear online store. If a product is repeatedly sent back for resale, that brings up questions to the design team, Agrawal says.

If a garment/product is returned well before the average five- to seven-year cycle, Agrawal says Patagonia might change the product’s design, or stop producing it altogether. 

“We decide whether we will no longer make that SKU if it really only sells once since that’s not part of our brand value,” she says. “Or we wonder if we [designed] it a different way, whether it would be better for resale later.”

Based on this data, Patagonia alters its plans for future products.

“Bringing back that data to product design and actually thinking about circularity in different ways from design to resale and repair [is helpful],” Agrawal says.

Patagonia promotes gear repair

The same goes for repair requests. If certain items are frequently returned for repairs, the retailer reassesses what problems could be rectified during product design. Items sent in for repairs are completed at Patagonia’s Reno, Nevada, warehouse.

In September 2022, Patagonia founder Yvon Chouinard announced the company’s new ownership to two entities: Patagonia Purposes Trust and Holdfast Collective. Profit not reinvested back into Patagonia will be distributed as dividends to protect the planet, according to a release.

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