Nick Sciple: Let's pivot into our main topic for today, which is talking a little bit about
what's going on in logistics, and putting that into context with what's going on with holiday sales.
We're seeing store visits down about 1.7% according to ShopperTrak data.
Digital sales, however, were up 23.6% on Black Friday.
Consumers spent more than $26.61 billion online between November 21st and November 26th,
according to Adobe Systems.
How have retailers and logistics infrastructure absorbed this spike in demand for the holiday season,
particularly online spending? Dan Kline: They've tried to flatten the season out.
If you remember, it used to be Black Friday. That was the day. People lined up at stores.
Then, it became Thanksgiving. Now, starting November 1st, you were starting to see sales.
So, I wouldn't think that much about the store traffic being down.
We don't have hard numbers, but sales were actually up.
The people who went to stores were more likely to be buying a TV or a refrigerator or something
you actually wanted to see.
In terms of online, they're trying to funnel you into certain items.
If you look at Amazon, who breaks down some of what they sold, all of their top sellers,
like nine of 10, were Amazon items. They know how many they have.
They're pushing you to those. They're heavily discounting them to get you to make decisions.
They're slimming down the merchandise that you can easily find on sale, so they have
a lot of whatever it is you're buying. The days of shortages have gone away.
Nobody's punching each other at a Walmart over a TV anymore -- well, not nobody, [laughs]
but very few people are doing it. Sciple: You're right, Dan.
We've seen some trends of spreading out promotions. In the past, it had been all front-loaded on Black Friday.
Now, we're seeing online spending on the Wednesday before Thanksgiving was up 31%.
It was up 28% on Thanksgiving itself.
You compare that to what we think of as the big shopping day, Black Friday was only up 23.6%.
Cyber Monday was only up about 20%.
We're really seeing this nudge towards consumers, spreading out the holiday purchases
so we're not getting everything front-loaded in one period the really stretched our infrastructure.
Kline: And some of it's purely mechanical.
Amazon has, for the last few years, had 100 million Prime subscribers, people that could
just hit a button and order. Walmart is sort of in the beginning stages.
When they went to free shipping, a little over a year ago, I don't remember the exact date,
that captured data for them. That was more people putting credit cards on file.
Target offered free shipping through the holiday season.
There are more digital retailers you can buy from easily. All three of those have my data.
eBay has my data. Probably a number of specialty places.
The hesitation to shop online on the holidays was, "Well, I see it on my phone,
but do I want to sit here and type in my credit card number, my address, all that?"
Now, that's really become easy.
Sometimes you can do it with Apple Pay and with other automated payment methods.
And that's taken away one of the major barriers.
People who used to use their phone as a shopping tool, as a catalog, are completing the sale now.
And that's taking people out of stores, which is a good thing if you're in line at a store,
not a great thing if you're waiting for something to be delivered via a truck.
Sciple: Sure. It's like we talked about in the last show.
It's just it's much more complicated to deliver dozens of shipments to individual homes than
it is to deliver one big, massive shipment to one store.
Another trend we're seeing, we mentioned spreading out these promotions.
We're also seeing a little bit of nudging towards these pick-up in store delivery from store options.
Again, Dan, that's what you were talking about, the same trend we were talking about.
It's much easier to deliver a big chunk of goods to one place and then distribute from there
than it is to do a thousand different individual one or two-box shipments.
Kline: And let's call this a nascent technology, the pick-up in store.
I live in two different places, so I'm in a number of different Walmarts and Targets.
They've redone the Walmart and Target where we are in Davenport, Florida.
When you walk in there, it's like a doctor's office. You enter your barcode, and it shows you your number.
If you go to the one in West Palm Beach, which just has the pick-up tower, it's utter chaos.
Nobody knows what's going on. Your item might not be there.
I told you, we ordered something in store, that was physically in the store, and it took five days to get it.
I had to leave, obviously, I didn't stay there for five days.
I had to go back and get it. These things are developing, and they're becoming more the norm.
People are becoming more comfortable with them.
But there were a lot of bumps in that process this year.
Sciple: Yeah, it's something that's still developing.
Like you mentioned before the show, we talked about how these traditional retailers,
the Walmarts and the Targets of the world, have struggled a little bit more than some of the
online-only retailers integrating this new omnichannel system.
Maybe that's because, as we mentioned, they're used to this legacy regime of
getting all their goods shipped to their store, and that supply chain mechanism.
That transition has been a little bit of a bumpy ride.
Kline: Putting a TV on a shelf is a lot easier than looking at the TV in the warehouse and going,
"Well, Nick wants one. He's going to come in in a couple of hours.
Dan wants one, but please bring it to his house.
And these three other people probably will buy it off the shelf."
It's more complicated now than it once was.
I think you also have to look at, this is maybe year two of this being a technology of people using it at all.
Amazon, in terms of its pure delivery model, is a few years ahead of where Walmart and Target are.
There were growing pains this year.
Anybody who's ordered has gotten weird boxes, orders that come early and late.
You guys at the office sent me eight days of Hanukkah gifts spaced out over eight days,
and four of them showed up on the same day. [laughs] So, we're seeing some problems.
But, really, not as bad as I expected.