GS Logo
The Green Sheet, Inc

Please Log in

A Thing
View Archives

View PDF of this issue

Care to Share?


Table of Contents

Lead Story

Turbulence expected for 1099-K reporting, be prepared

News

Industry Update

Washington takes a second look at Durbin

Big card brands, big banks hit with more antitrust suits

CEOs advise wait and see at ETA forum

Update feeds need for more PTS guidance

Features

Legislative update, November 2011

Five key lessons e-commerce merchants can learn from the 2010 holiday season

Michael Duffy
Chase Paymentech Solutions LLC

Research Rundown

Give, inspire and flourish

Selling Prepaid

Prepaid in brief

Union Privilege makes savings a plus

Holiday gift cards get personal

Views

ISOs and the new frontier of payments

Brandes Elitch
CrossCheck Inc.

Education

Street SmartsSM:
Agent training - more than taking a test

Bill Pirtle
C3ET Credit Card Consortia for Education & Training Inc.

When big money meets small ISOs

Adam Atlas
Attorney at Law

Country-specific alternative payments

Caroline Hometh
RocketPay LLC

Visa to eliminate PCI DSS requirements with EMV - not

Linda Grimm
Linda Grimm Consulting

How does a credit card salesperson learn to sell POS?

Jerry Cibley
United Bank Card Inc.

PR and press release basics

Peggy Bekavac Olson
Strategic Marketing

Managing infrastructure in a virtual world

Tim Cranny
Panoptic Security Inc.

Caution: Assumptions ahead

Jeff Fortney
Clearent LLC

Company Profile

POS Portal Inc.

New Products

TIN matching simplified

TIN Matching Service
SecurityMetrics Inc.

Authenticate and process with one touch

OneTouch Mobile Payment
Admeris Payment Systems Inc.

Inspiration

Choose to be grateful

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

November 14, 2011  •  Issue 11:11:01

previous next

Five key lessons e-commerce merchants can learn from the 2010 holiday season

By Michael Duffy

Editor's Note: This article was first published in an October 2011 email bulletin sent to a select group of Chase Paymentech Solutions LLC contacts; reprinted with permission. Chase Card Services. All rights reserved.

The term "Happy Holidays" has been somewhat of an oxymoron to retailers over the past few years. As the economy tumbled in recent years, holiday retail fell right along with it. Even e-commerce retail, where double-digit growth rates had been the norm, saw a dramatic decline in growth rates.

Online retailers, however, have returned to growth much faster than their brick and-mortar counterparts, seeing modest year-over-year increases. The 2010 e-commerce holiday shopping season finally brought with it a return to pre-recession growth rates, according to the 2010 Chase Paymentech Cyber Holiday Pulse Index (http://pulse.chasepaymentech.com). For the full season, year-over-year transactions rose 38 percent, sales grew 24 percent and average ticket declined 10 percent.

The Chase Paymentech Pulse Index presents year-over-year trends, providing historical context to holiday shopping statistics and identifying emerging online shopping trends.

The Pulse Index tracks millions of payment transactions daily throughout the holiday season, taken from a sample of 50 of the top U.S. retail websites as ranked by Internet Retailer magazine. Unlike similar data sources, the Pulse Index data reflects empirical merchant purchase data - it is not a consumer sample, a survey or an estimate.

Armed with this data, as we look to the 2011 holidays, there are some clear lessons that merchants should take away from the 2010 season.

Lesson one: Holiday shopping starts early

In early November, it was apparent that 2010 was going to have a different shopping season than the past two years. Early season transaction counts were trending much higher than in 2009, and year-over-year sales growth was consistently above 20 percent.

At peak season, the Pulse Index data clearly indicated that online shopping no longer begins on Black Friday. Thanks to the 24/7 reality of e-commerce, consumers began their shopping early, going online to take advantage of Black Friday deals before the physical stores had opened. More than ever, multichannel merchants took advantage of their online capabilities to extend shopping hours, and consumers clearly responded.

Lesson two: Cyber Monday matters, but don't ignore the rest of the week

The spending did not stop as shoppers returned to work. This season, Cyber Monday was the busiest single e-commerce day of the year, and by extension, in history. And the shopping fervor continued through the week, with data indicating record transaction and sales volumes for a single week.

Lesson three: Cyber Week is big, but the following weeks are bigger

The next week, beginning on December 5th, instead of showing the sharp spike of another Cyber Monday, the Pulse Index revealed that e-commerce shoppers logged on and made purchases all week long. And as we have seen in previous years, the following week, beginning on the 12th, fared even better, as buyers began to face shipping deadlines.

Also, with Christmas falling on a Saturday this year, the week of the 19th had an additional day or two for procrastinators to squeeze in a last-minute purchase without having to opt for overnight delivery. The end result was a record season for Pulse e-commerce merchants, with strong growth in transactions and sales volume.

Lesson four: Average ticket declines are not necessarily a bad thing

Average ticket size fell for a third straight year. Unlike previous years, however, the reasons for the decline were clear. First, lower prices for big-ticket electronics such as televisions and the expanded availability of lower cost computers such as tablets and netbooks pushed transaction values down.

Second, the rise of digital media, particularly music downloads and e-books, meant large numbers of relatively low value transactions. Mass market/variety retailers, many of which also do substantial business in electronics and media, saw impressively large gains in transactions and sales volume despite lower average tickets.

Lesson five: Vertical markets matter

Looking deeper into the Pulse data, we can see that there were some sharp differences among vertical markets. Apparel and shoe merchants had a good season, with strong average ticket growth. Toy sellers also challenged the lower average ticket trend, with overall sales growth of more than 25 percent.

Only the gift and jewelry sector indicated a decline in transactions but still managed a small increase in sales.

Taking the lessons into 2011

It's clear that many of the Pulse Index insights can be leveraged throughout the year. The weekly cycle of e-commerce has been true for years, and merchants can leverage peak weekday traffic and make efforts to drive sales on otherwise slow weekends.

The success of multichannel strategies may be replicated during other promotional periods, whether it's a holiday or back-to-school time. And the growth of digital media could have ripple effects across the retail landscape.

In the meantime, Chase Paymentech will continue to help merchants keep a finger on the pulse of e-commerce.

With more than two decades of payments industry experience, Michael Duffy leads Chase Paymentech Solutions LLC as President and Chief Executive Officer. He can be reached through John T. Murray, j.t.murray@jpmchase.com.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

previous next

Spotlight Innovators:

USAePay | Impact Paysystems | Electronic Merchant Systems | Inovio