All eyes turned to Cyber Week as economists and retail experts projected historic numbers in purchases, shipments, and retail revenue. The consumer-spendathon also took on outsized importance this year given its potential to provide a springboard for the overall economy. In years past, sluggish Cyber Week numbers have been a precursor to an economic slowdown. Conversely, record-shattering spending during Cyber Week has helped kickstart the economy in previous cycles.
Now that the dust has settled, it appears that despite an onslaught of special offers, discounts and incentives provided by national retailers in the past six weeks to compete with Amazon’s Prime Day, Cyber Week’s traditional allure was too much for consumers to pass up. Here’s a quick “By The Numbers” recap of Cyber Week:
Cyber Week Domestic Spending ($106.5 Billion, Up 27.7% YoY)
Cyber Week Shopper Participation (186 Million, Up 22% YoY)
Black Friday ($8 Billion, Up 21.6% YoY)
Small Business Saturday ($4.7 Billion, Up 30.2% YoY)
Cyber Monday ($10.8 Billion, Up 15.1% YoY)
Smartphones Accounted For 37% of all Cyber Monday Sales
Savvy Retailers Providing Flexible Options
The migration from traditional in-store shopping to an online experience is far from new. For the past fifteen years consumer reports have tracked a steady 1.5% to 2.5% year-over-year increase in online shopping volume. During this year’s Cyber Week, those marginal annual increases were completely obliterated as shoppers took their business in droves online. According to RetailNext, a leading data provider of in-store analytics, traffic numbers for brick and mortar stores were down 42.3% for the weekend (Friday through Sunday). Yet 22% more shoppers participated in Cyber Week 2020 than in the previous year. While this tectonic shift from in-person to online was predicted, retailers that offered hybrid shopping models actually fared considerably better than those without in-person options.
Revolution ROI reported on Wednesday that “US retailers offering BOPIS and curbside pickup increased digital revenue by 29% compared to 20% for retailers without these options.”
In a competitive online landscape, differentiators like flexible pickup options are becoming increasingly important. Both the USPS and leading domestic shippers have warned that the second half of December will be fraught with shipping delays. As a result, shoppers are seeking out retailers with in-person and curbside pickup options as a means of circumventing costly and potentially delayed shipping options. “Throughout the remainder of the holiday season, we expect to see record sales continue and curbside pickup to gain even more momentum as shoppers avoid crowds and potential shipping delays,” said Taylor Schreiner, a director at Adobe Digital Insights.
Attachment Rates Soar, Small Business Saturday Shines
Clyde’s internal data revealed two promising trends within the warranty space. That first was that overall attachment rates soared during Cyber Week, experiencing a 134% year-over-year increase. The attachment rate is simply the percentage of product sales transactions that include a service contract at the point of sale.
Our data also found that Small Business Saturday, once considered the plucky underdog of Cyber Week, accounted for 22% of all warranties sold. That figure was second only to Cyber Monday, which accounted for 27% of contracts sold during the week.
In the lead up to Cyber Week, industry analysts stressed the importance of free shipping. According to CNBC, nearly 40% of all “abandoned carts” were traced back to consumers' unwillingness to pay for shipping costs. Similarly, The NPD Group, an international retail tracking leader, indicated in their annual Holiday Shopping Season Report that “41% of consumers cited free shipping as something that would influence where they shop for holiday gifts, surpassing special sale price as the top influencer for the first time.” These tangible cost-savings may also explain an increased willingness by consumers to purchase warranties. With Cyber Week now in the books, Clyde's internal data reveals the potential connection between free shipping and increased protection plan spending. As a company, Clyde sold seven times more warranties on purchases offering free shipping than those that did not.
Our data team will continue to monitor trends throughout the holiday, specifically new consumer trends that may impact attachment rates and warranty length preferences. Be sure to check back to our website for blogs, webinars and podcasts discussing these topics in the coming weeks.