From Seeking Alpha:
In our opinion, multiple early data points support the thesis that Amazon dominated the 2016 holiday spending season. Most crucially, we point investors to the Census Bureau’s Advance Monthly Retail Report released on Friday, 1/13. While December Retail Sales fell short of expectations, they confirmed a 2016 sales shift trend which is bullish for Amazon and bearish for department stores like Wal-Mart and Target. Investors have become accustomed to non-store retailers putting up the biggest growth numbers in the Census Bureau’s monthly reports, but that growth rate has been slowing. In 2010, non-store retailers saw a 14% increase in sales in the important holiday shopping months of October, November, and December. In the same time frame the following year, sales were up 13%. That slowed to 11% in 2012, 8% in 2013, and 7% in both 2014 and 2015.
The multi-year downtrend in non-store retailers’ growth rate, though, broke this year, and in significant fashion. In October, November, and December, non-store retailers’ YoY growth rate jumped to 13%. That is the strongest holiday sales growth the segment has experienced since 2010, and is additionally impressive considering how much larger the sales base is today than it was in 2010.
. . . .
Not by coincidence, department stores saw an acceleration in their sales decline rate this year in the holiday shopping season. Department stores have been in decline for several years, but the declines have been predictable and marginal. Since 2010, sales at department stores have fallen between 1% and 3% per year in October, November, and December. That trend broke this year, and in equally significant fashion, as losses expanded to nearly 8%.
. . . .
This is the macro backdrop to poor holiday sales updates from Big Box department stores like Macy’s, Kohl’s, and J.C. Penney. It is also coupled with data from Slice Intelligence, which reported a near-40% market share for Amazon in the rapidly expanding e-commerce market, and First Data, which reported that online sales grew to account for 21.3% of all holiday spending in 2016 (up from 15.4% in 2015), while department stores saw sales decline 4.8%.
Link to the rest at Seeking Alpha
I go to a physical store for clothes, when I need them. I’ve had bad luck buying clothes online. Shoes too. And most groceries. The idea of grocery delivery is great until the reality of living in a rural area hits you in the face. I’d rather drive six hours to the nearest Costco and make a day of shopping every few months than depend on our local UPS or USPS to get anything to me before the apocalypse hit.
I have not been to The Mall (like Immortals, apparently There Can be Only One) in years. I don’t wear teenager clothes, I don’t wear fashion clothes, I don’t “hang out,” and neither my budget not my waistline encourage visits to the Food Court. I do try to shop local when the item is available and my budget allows, but for clothes, most books, and “odd stuff” I use the ‘Net, especially Flea-bay, the ‘Zon, and a few other places. Groceries are all local, aside from odd spices.
I buy fresh/perishable food (meat, produce, half-and-half, etc.) at the grocery store. And I buy Sodastream gas refills at Staples because that’s the only place I can get them. Otherwise, I buy everything possible from Amazon and have it shipped to my UPS box a block away.
Which is also why I’d make good use of an Amazon locker if it were conveniently located for me. One of those might even tip the scales to the point where I’d consider getting rid of the UPS box.
Gift-wise, I have it very easy. I don’t give or receive them. (Even my wife and I don’t exchange them, really.) And if I need to give one, an Amazon card does the trick. If someone has a problem with that, they don’t deserve another gift from me.
I’ve said it many a time: if most of the retail sector had to depend on someone with my buying habits, the world would be awash in red ink.
I like Walmart. I’m fine with “cheap crap” for a lot of items, and it’s far cheaper for food than the other grocery store I often visit.
There are two bricks ‘n mortar stores I visit about every two or three months: Lowes and Bed, Bath & Beyond (in fact, BB&B is on my schedule for today). Everything else: Amazon.
I stopped shopping in physical stores a long time before online became a thing. I shopped from catalogs instead.
Department stores always have that gauntlet of perfume and makeup counters at the very front which make me wish for a gas mask trying to get past them. I’m not allergic to perfumes like someone else I know, but hate the miasma of various scents mixed together in what feels like a toxic cloud. Not to mention the sales people popping up in front of me offering samples and makeovers when I’m trying to get through that area as quickly as possible and having to take a breath to say no.
Walmart just isn’t worth it. Their stuff is cheap crap and food is not any less expensive than a regular grocery store. I’ll go to Costco, groceries, farmers markets, and thrift stores, but otherwise it’s online only. Maybe shoes and Home Depot.
Woodfield these days just wears me out. In addition, I’m tired of seeing nothing but stores that sell teenagers’ clothes.
Z Gallerie. 🙂
Dan
The switch to teen-only clothing was JCP’s big mistake a few years go. And even when I was a teen and at my anorexic skinniest, I was still a size 12. Heaven forbid, they carry anything over a 16 these days for middle-age moms.
The only reason I go into b&m stores is to make sure clothes and shoes fit my still-growing teen son.
Those guys lost me when they remodeled the northgate store making winding pathways and covering every surface with mirrors. I actually got lost trying to get out, and I’m someone who never gets lost. Made me very angry and I’ve never gone back.
“The Experience Economy.”
We like strolling in and out of the shops on Michigan Av in Chicago during nice weather, (and cease fires).
We like store hopping at Woodfield in Schaumburg, or the Oak Brook Mall.
I like relaxing in the women’s fashion store, sipping something soothing, watching my wife try on new clothes.
Buying stuff quick…Zon. Shopping on a lazy afternoon…brick and mortar.
Dan
Michigan Avenue is a must-visit for me whenever I’m in Chicago.
I’m trying to think of another location anywhere that’s as compelling for me, however, and none come to mind.
For us, it was down to: did the physical store actually have the desired gift item. For many things we wanted to give, the answer was no. Or they had one but the box had been opened and resealed so many times, I wondered if it actually contained smelly sweat socks. Or the desired size was out of stock. Or we asked the staff who “didn’t know” if the item would be back in stock later, and apparently didn’t care (Target). Ten minutes later we found that item in a different place in the store, without help.
Don’t blame Amazon that I did about 70% of my Christmas shopping there. Look to the board in your own eye first, retailers.
Same problem here. There were a number of things I’d have bought from stores, but those items were ‘online only’ or just out-of-stock locally. Which eliminated any benefit of buying from the local store.
It might be regional, but the floor space of the local Wal-Mart is probably 50% clothing. Most of it faux-gangbanger or designer-working-class. The local K-Mart is similar, except maybe 75% of its floor space is clothing. In both cases, almost entirely made in some tiny foreign country. I imagine the profit margin on a $30 clothing item is pretty good.
I’ve done nothing but shop online (vs Dept Stores) for 10-15 years. I think I’ve been in a department store fewer than 20-30 times in the last 15 years.
If you throw in chain specialty stores, like Fry’s or Staples, it’s almost as bad.
My physical store visits are down to groceries, home repairs, gardening, and a few similar categories which are a bit more resistant or require in-store help.
I did all my holiday shopping online this year. I didn’t have to park, fight crowds, drive to multiple places looking for an item out of stock in other places, blind browse, or wait in lines. This was not out of any animus toward brick-and-mortar, but a simple calculation of ROI.
I went to Sears for the first time in years (to return a Christmas gift from a relative) and the Sears location nearest me looked like it was a tatty throwback to another era (probably was last renovated when I was a kid, or earlier). If that’s how department stores are, I’ll stick to online shopping.