As we close the books on October, it’s time for the next Accertify Holiday Tracker!
As a reminder, every October we release bi-monthly synopses of what we are seeing in eCommerce compared to last year and against a backdrop of broader macroeconomic trends. Because we are trusted to protect 40% of Digital Commerce 360’s Top 100 merchants1, The Top 10 airlines in the US*, 8 of the Top 10 global airlines* and leading entertainment and iGaming properties*, we have unique insights to transaction volumes across the world’s marquee brands. If you missed the first Accertify Holiday Tracker — read it here.
So…here it goes. For this post, we’ll evaluate October 16 – October 31 across retail, travel, entertainment, and iGaming industries globally comparing 2022 to 2021. Given the COVID-19 pandemic is approaching three full years, we’ve decided to drop comparisons back to 2019 for this year’s posts.
The retail industry appears to be one in transition and still searching for “normal”. The coronavirus pandemic accelerated not only online shopping and new behaviors but also fueled growth in capital expenditures – things like fulfillment, warehouses and logistics networks to meet insatiable demand. Add in stubborn inflation and successive rate increases by the Federal Reserve and it just feels unsettled.
Adobe recently revised their online holiday sales expectations to 2.5%, the smallest growth since 20152. In addition to these challenges, many retailers during the pandemic introduced favorable refund and return policies to make shopping online easier and more flexible. That too may be changing. According to the National Retail Federation (NRF), retailers expect 17% of their customers to return merchandise (valued at $761B) with fraud accounting for 10% of the returns3. As a result, some retailers are shortening the return window, instituting a fee for online orders returned by mail, or simply offering store credit for returns instead of cash back4.
Alas, it’s not all doom and gloom. The consumer is resilient and will indeed continue to spend. I haven’t done my holiday shopping yet and chances are you may not have either. From an Accertify perspective, we saw a 2.4% decline YoY in this October time period. Interestingly, if we segment the volume, we saw YoY gains for omnichannel retailers whereas online only retailers were down YoY. I think that omnichannel trend may prove to be an important differentiator this holiday season and even going forward into 2023 – the ability to offer the consumer choice, convenience, instant gratification, and a good deal. Sounds so 2019. Maybe that’s the new “normal”?
If we turn our attention to travel, we continue to see strong demand with volumes up almost 8% YoY. As Scott Kelly, United Airlines CEO, noted in their most recent earnings call, “Aviation uniquely is still in the recovery phase”5. It’s hard not to think but is travel experiencing what retail did in late 2020 and 2021? Crazy, pent up, short-term demand that will lead to a pullback in the future? The answer may be no. In contrast to retail, travel’s growth has been more restrained. Areas like pilot and staff shortages, airline capacity, airport restrictions, and other factors may indicate demand is still growing. It may also signal that typical peak and non-peak periods may be a thing of the past with demand being consistent year-round.
In the entertainment industry, we saw volumes skyrocket up 75% YoY as consumers prioritize spend on live events, particularly concerts. I can certainly attest to this behavior in my own household with my oldest daughter plunking down her hard-earned summer money to see Harry Styles in concert in Chicago. I’m pretty sure she would have seen more shows if she could have gotten tickets but with supply tight and demand high, the prices were formidable. In the end, as a high school senior, with all the challenges over the past few years, I’m glad she got to experience a traditional “rite of passage”.
As I noted in the first Holiday Tracker, we segmented out a new core industry for us this year, iGaming and Sports Betting (this is the reason you don’t see a comparison to 2021). The ability to fund a digital wallet and place wagers directly from your mobile device have added convenience, spontaneity, and excitement. As the major sportsbooks improve operating efficiencies, launch in new states, and employ robust fraud controls, the growth should continue.
Finally, like last year, we can see the sustained October ramp in volume to start the holiday season. Collectively, across all industries globally, we saw volumes in this time period increase 12.1% compared to last year.
1: Based on annual web sales as reported to: https://www.digitalcommerce360.com/about-our-databases/