Anuj Nayar, Senior Director of Global Initiatives, PayPal
Since $1 in every $6 of ecommerce flows through PayPal, we have a unique perspective and can identify shopping trends before others in the industry. One trend we’ve recently noticed is particularly interesting. 2012 marked the first year that we saw the beginning of the holiday shopping season kick off on Sept 30th—a full month before Halloween. But Thanksgiving came super early that year (on November 22nd). What surprised us is that Sept 30th marked the beginning of the shopping season in 2013 too, even though that year Thanksgiving came late (on November 28th). Our early data indicates that 2014 is following the same trend.
We’ve analyzed PayPal’s year-on-year data, and found that 2014’s US holiday shopping season has already kicked off. According to our data, the US holiday shopping season began sometime between 6 PM to 7 PM PDT, on September 30. We’ve noticed that on the day the shopping season begins, there’s typically a big spike in payment transactions. For example, last year, payment transactions nationwide grew by 62.81% on September 30th.
The “Holiday Creep” as so many refer to it, annoys some, but not all – a recent study saw that 12 percent of millennials (those ages 18 to 29) said they either "like" or "love" all the early holiday marketing/merchandising (CNBC). With approximately 25 percent of our customers falling into the millennial age range, we aren’t surprised by this trend.
As retailers compete more fiercely each year for holiday shopping dollars, young and savvy shoppers recognize that prices for some gifts are often lowest in September and October – not Black Friday (WSJ). But the most interesting data actually involves people shopping from their mobile device, a trend that has been growing in recent years. According to our data, Wednesday, October 1, was PayPal’s largest mobile shopping day in the US this year, with peak shopping happening during the lunch hour, 11 AM to 1 PM PT.
This year, the total payment volume on mobile (mTPV) spiked on September 30 and October 1, representing a 26.1% and 27.4% increase over the average daily mTPV for 2014. This is up from a 15.4% and 20.4% increase over the average daily mTPV for 2013 over those two days.
So if you’re a merchant and you’ve missed the start of the shopping season, is all lost? Of course not. You still have plenty of time to stock up for other people’s stocking stuffers. The key for most small businesses is to manage the cash flow for your inventory and PayPal can help you out here too. We launched PayPal Working Capital (PPWC) to help small businesses do exactly that. We will give you a cash advance that you can pay off over time as a percentage of your sales. Since launching PPWC in September 2013, we’ve lent $200M to more than 20,000 US small businesses, and in June, we expanded the service to businesses across the UK. Since June (and just in time for the holidays) 48 percent of businesses who are taking advantage of PPWC are using the funds to build inventory to prepare for the busy holiday shopping season.
I joked last year that the holidays have now eaten Halloween. If the last three years of data are any indication, the holidays have fully digested Halloween and are now making a play for Labor Day. And that offers savvy shoppers a great opportunity, whether buying from local or international merchants, in-store, online or on mobile.
We will be back later in the quarter with more PayPal data on this year’s Holiday shopping trends. Until then, happy shopping!