IT Briefcase Exclusive Interview with IBM: How Major Snow Storms Effect Shopping Trends

With successive record breaking blizzards burying the Northeast in over 100 inches of snow this winter, many readers might expect retail sales to be buried as well. But according to IBM Digital Analytics Benchmark, which analyzes and delivers real-time shopping data, we’d all be wrong – retail sales actually spiked in a recent period of “climate commerce.” In fact, online shopping in the Northeast increased by more than 20 percent during the two major storms that hit the region on February 2 and 9.

Just one week later, those same snowed in consumers headed online for their Valentine’s Day shopping. During the whiteout week leading up to the big day IBM recorded a 10.2 percent increase in online shopping over the same period in 2014. With consumers being more attached to their smart phones and tablets than ever before – these recent events only further emphasized that fact that retailers must embrace a multi-channel customer engagement strategy.

In this interview, Jay Henderson, Director, Product Strategy, IBM Commerce, speaks with IT Briefcase on how trends such as extreme weather and holiday shopping impact online commerce and what it means for retailers.

• Q. Earlier in the month, IBM looked at consumer shopping trends during two heavy snow storms in the Northeast. What were some key findings from this round of data analysis?

As we saw over the 2014 holiday season, online shopping continues to sky rocket – especially when you’re buried under seven feet of snow! IBM’s Digital Analytics Benchmark examined online shopping activity during two recent snow storms that hit the Northeast on February 2 and 9, which we then compared to activity on Monday, January 26, when snowfall didn’t occur.

On these days, the Northeast accounted for 24.6 and 24.2 percent of all online sales in the U.S., an increase of over 20 percent from January 26 respectively. We also saw a noticeable bump in mobile sales, up almost 20 percent across the country on these two days, likely spurred by those Northeast shoppers who ditched their shovels for shopping.

• Q. Are there any takeaways for retailers from this snow day data?

Yes! The weather has a huge impact on consumer behavior, not only determining what people buy, but whether they venture into stores or opt for online channels. With global m-commerce sales forecasted to reach $626 billion by 2018, retailers have more opportunity than ever to engage with customers no matter where they are. Businesses that have a proven omni-channel presence and powerful analytics can now present personalized and consistent offers to their customers whether they are warming up in their homes or venturing out to the store. The vendors that master this will remain relevant to their customers, maximize their brand exposure and drive online sales even during periods of extreme weather conditions.

• Q. Valentine’s Day is another high-volume shopping period for most of us – were there any noticeable trends compared to last year?

Online shopping for the v-day increased more than 10 percent year-over-year. We also continued to see strong growth in the mobile space, especially for industries like jewelry where just over 35 percent of online sales came from smartphones and tablets. That’s an increase of more than 50 percent – and a lot of sparkly valentines.

It’s worth noting that these numbers were likely aided by recent snow storms, which had many people surfing on their tablets from the couch in the week leading up to Valentine’s Day. However, I think it’s safe to say that the biggest driver was the retailer’s ability to meet the needs of last minute lovers this year, many of who were scrambling for gifts while on the go on their mobile device. By delivering targeted, personalized deals across all customer touchpoints, including mobile, retailers made it easy for even the busiest guy or gal to find that perfect gift at the 11^th hour.

• Q. So e-commerce is the go-to shopping method, but are consumers showing signs of shopping more on mobile devices like smartphones and tablets, or are online sales still largely made using laptops?

Mobile commerce is steadily growing – this Valentine’s Day alone mobile traffic accounted for 46.5 percent of all online traffic, up 26.5 percent compared to the same period last year. Interestingly, although we are still seeing the ‘smartphones browse, tablets buy’ trend, where the data shows more consumers will use their phone to browse but ultimately turn to their tablet to make the purchase, this year the gap between smartphone and tablet sales was much smaller. Tablets drove nearly 12.5 percent of all online sales and smartphones accounted for 10.7 percent.

What this tells us is that the gap between the two devices may be closing. With the ease of use and growing size of screens, it makes sense that smartphones are becoming the fan favorite for online shopping. On top of that, we see more and more retailers introducing easy to use mobile shopping apps in a strategic move to deliver consistent experiences across devices. As a result, a customer’s journey is becoming seamless from in store to laptop to mobile, encouraging them to tap purchase buttons.

• Q. So what do these numbers mean for retailers? For customers?  

Whether it’s mobile browsing at the gym, window shopping on their lunch break, or crashing on the couch with their tablets, retailers need to understand that their consumers are constantly looking for the best deals. This presents a huge opportunity for retailers to dig in to their existing customer relationships and give their consumers what they’re asking for – a continuous, personalized experience.

The smartest marketers are listening to their customers and investing time and resources into provide the best engagement. This was especially visible in the week leading up to Valentine’s Day when retailers showed the love to their online channels. Looking forward, with the increase of customers can expect to spend less time bargain hunting and more time bargain buying.

Jay Henderson, Strategy Director, IBM Commerce

Jay leads product strategy within the IBM ExperienceOne group. His team is responsible for market analysis, customer insight, and industry marketing functions.