The tech web is awash in coverage of the kickoff to the holiday shopping season in the U.S. this week. Predictably, ecommerce sales are up strongly year over year, with lots of interesting detail about sales patterns between different device platforms. But that’s not the interesting news. What many found surprising, though probably shouldn’t have, was that total retail sales over the long weekend were actually down somewhat this year. The National Retail Federation reported an 11% drop, others less. The drop, of course, is all from in-store sales, which took it on the chin as shoppers simply didn’t show up for the “door buster” sales.
In many ways, the trend towards shopping online has had a tremendous, historic leveling effect for retail (and most other industries). After all, companies are now all equally discoverable on the web or via app. But while this evolution has demolished some of the old empires (ex. Radio Shack, Staples), the reason why is because ecommerce enhances the premium of a powerful brand and great customer experience, and strongly links the two together. Some companies have started with the first and developed the second (ex. Walmart, Target), while others have done the opposite (ex. Amazon). Interestingly, both Walmart and Target are reportedly doing just fine over the holiday shopping weekend.
The onset of the holiday shopping season, and the flurry of coverage surrounding it, provide a great example of how this process is playing out. The web’s asymmetry and winner-take-all markets are fracturing the traditional model of marketing, selling, and customer acquisition, and in the process creating a lot of new winners – as well as solidifying some of the old ones.