The Holiday Shopping Showdown: E-commerce vs. In-Store Experiences
The day after Thanksgiving is widely known as Black Friday. It marks the unofficial start of the holiday shopping season.
The term “Black Friday” was first popularized by Philadelphia newspapers in the 1970s — around the same time Kmart introduced planograms — to mark the beginning of holiday shopping.
By the 1980s, companies had fully embraced Black Friday, launching annual deals and discounts to attract shoppers to their stores.
Just two decades later, however, the rise of the internet set the stage for an entirely new kind of shopping, marking a transformative shift in retail strategy that would redefine the holiday gift-getting season.
Cyber Monday and Beyond: E-Commerce Deal Days and the New In-Store Challenge
Cyber Monday was coined by the National Retail Federation in 2005. Its origins come from a press release titled “Cyber Monday” Quickly Becoming One of the Biggest Online Shopping Days of the Year.
The New York Times quickly jumped on the trend, writing an article titled Ready, Aim, Shop:
“Hence the catchy Cyber Monday, so called because millions of productive Americans, fresh off a weekend at the mall, are expected to return to work and their high-speed internet connections…and spend the day buying what they liked in all those stores.”
And that’s exactly what consumers did.
In 2010, Cyber Monday sales surged past $1 billion for the first time, solidifying its status as the largest online shopping day in the US.
(According to sources, Cyber Monday 2023 was the biggest day for online shopping in the US on record, reaching a total of $12.3 billion in sales.)
Cyber Monday undoubtedly changed the retail landscape forever, leaving big-box stores wondering how they were to compete during the holiday rush.
However, a handful of e-commerce companies reshaped this holiday retail strategy by creating branded deal days in Q4.
A textbook example is Amazon’s highly anticipated Prime Big Deal Days.
Consumers could get these twice-a-year deals (now in July and October) if they subscribed to Amazon Prime.
This ensured brand loyalty, increased sales for subscriptions and products, and cemented Amazon as a go-to destination for holiday shopping.
Big-Box Retailers’ Response: Exclusive In-Store and Omnichannel Sales Events
Noting Amazon’s success with branded sales events, brick-and-mortar retailers created their own holiday sales events, focusing on three major occasions: Black Friday, Cyber Monday, and last-minute gift-giving in December.
Big-box retailers took a few notes:
- Strategically time the sales within the peak shopping season between October and December.
- Create exclusivity by offering discounts either only in stores or to members only (through a free customer loyalty program or a paid subscription).
- Develop an omnichannel sales event with the holiday shopping trifecta: their own apps, their online marketplace, and in-stores.
This spawned several popular holiday shopping deals, including:
- Target Circle Week in October (expanded into daily and weekly deals beginning in November, plus an Early Black Friday Sale)
- Kohl’s 3 Days of Deals in October
- Walmart’s Holiday Deals Event in October
- Big Lots’ Black Friday Fridays from October to December
- Best Buy Black Friday + Apple Black Friday at Best Buy
This omnichannel strategy paid off, allowing brick-and-mortar retailers to compete with e-commerce giants, like Amazon and eBay, during their peak sales season.
This strategy also drove foot traffic back to big-box stores during a crucial shopping period, a revenue opportunity that doesn’t exist for e-commerce companies.
The Future of Holiday Shopping: Why Brick-and-Mortar Stores Will Win the Holiday Shopping War
Physical retailers have an omnichannel opportunity.
There are few things consumers love more than convenience.
Whether that’s mass product availability, quick customer service, or — arguably the most important convenience — their preferred way to shop without sacrificing the aforementioned luxuries.
The foundation of big-box retailers is their established presence of stores, which e-commerce companies can’t compete with. (One Door wrote about Amazon’s attempt here.)
Complemented by a branded app and online marketplace, these retailers, unlike e-commerce companies, can develop a truly omnichannel shopping experience (and prioritize convenience) during a busy season.
Brick-and-mortar stores are adapting to generational shopping preferences.
It’s no secret that Gen Z and Gen Alpha are internet-first generations, which gives e-commerce a leg up with younger, trendier demographics.
However, Kelly Pederson, partner and PwC Global Retail Leader, spoke to Retail Dive and dispelled rumors, mentioning that Gen Z consumers actually enjoy brick-and-mortar shopping.
It’s all thanks to nostalgia.
(One Door talks about how the power of nostalgia keeps some legacy brands afloat here.)
Citing a report from ICSC, which claims 97% of Gen Z consumers shop in physical stores, Simon Property Group, which owns nearly 200 malls in the US, launched a Gen Z advertising campaign called “Meet Me @themall”.
The campaign is headlined by mall-loving Gen Z influencers and leverages the generation’s nostalgia for the 80s and 90s.
Consumers are wary of supply chain and shipping delays, especially for time-sensitive purchases.
Consumers are concerned about getting gifts on time during a condensed holiday shopping period and with slowed delivery times.
In fact, 65% of consumers are worried about supply chain delays. Their solutions?
- They’re shopping earlier in hopes of meeting deadlines for holiday meals, gifts, and travel (hence retailers promoting holiday shopping at the beginning of October).
- They’re shopping in stores to avoid high shipping costs, package delays, checkout inconveniences, and price hesitation, according to this study.
Visual Merchandising is the Secret Weapon for Holiday Retail Success
Effective visual merchandising is a powerful strategy for creating memorable, engaging in-store experiences — and it gives physical stores the edge they need against e-commerce during the holiday shopping season.
Visual merchandising creates an immersive shopping experience. Unlike online shopping, which is limited to screens, visual merchandising offers shoppers a multi-sensory experience.
Thoughtful displays, holiday themes, and strategic lighting draw customers in and encourage them to slow down and explore the store.
This immersive experience creates a festive atmosphere that can’t be replicated online, enticing shoppers to discover gift options they may not have thought of before.
Clever visual merchandising can maximize sales. By strategically placing items in high-traffic areas or alongside complementary products, retailers can increase impulse buys and cross-selling opportunities.
When shoppers see items displayed in attractive, inspiring ways, they’re more likely to make spontaneous purchases.
For example, a well-placed display of holiday stocking stuffers near checkout counters can encourage last-minute gift additions.
Visual merchandising aids brand recall and shareability. Eye-catching displays don’t just create an engaging experience in the moment. They’re also memorable enough to capture and share.
Holiday-themed displays, creative product arrangements, or interactive setups can encourage customers to take photos and share them on social media. This increases the appeal of “can’t-miss” holiday moments and amplifies the store’s reach through user-generated content.
When customers share their shopping experience, it extends the store’s visibility beyond its physical location. This helps attract new shoppers and increase brand recall.
If you’re looking for the best of both retail strategies, bridging the gap between e-commerce and in-store shopping this holiday, download our guide:
Scaling E-commerce to Retail: 5 Ways to Improve Store Performance and Drive Revenue
Learn how to optimize your approach this holiday season and give shoppers a reason to choose your brand, no matter how they shop.