By Jasmine Glasheen, Off Price Retailing Magazine
Retailers made their numbers during the final hour of the 2016 holiday season. Last-minute holiday customers were holding out for savings, making Friday, December 23rd (two days before Christmas) the biggest shopping day of the year. The National Retail Federation reported 22.3% of last-minute holiday shoppers listed “waiting for the best deals on holiday merchandise” as their reason for procrastinating. This reflects a common holding pattern in retail: although retailers want to maintain margins, customers won’t buy until prices drop.
Online and off-price stores led the pack in 2016 holiday sales growth. “Discount and outlet segments generally (made) up for soft department stores performance,” said Bridget Johns, Head of Marketing and Customer Experience at RetailNext.
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Declining department stores had trouble keeping up with the breakneck growth of the off-price sector. Discount stores and outlets were destinations for 47.1% of holiday shoppers, compared to the 50.9% of shoppers who visited department stores. Of course, department store customers also were cruising for deals — NRF reported 73.3% of holiday customers chose “sales or discounts” as their primary motivator when shopping.
Widespread smartphone technology adoption is creating an ever-increasing level of transparency within the retail industry. Mobile device shoppers use their smartphones to hunt for the best value. In fact, Women’s Wear Daily reports that 52% of Millennial smartphone shoppers use their phones to compare prices, and 37% of Millennials use technology to access digital discounts or coupons. In other words, Millennial-minded shoppers know there are deals to be had and they are willing to do a little legwork to maximize their savings.
Omnichannel sales growth reflects a shift towards discounting, since online holiday shoppers used omnichannel to seek out the best value. International online purchases were timed around retailer sales.
The 2016 holiday customer exodus towards creative and value-based retail shows no signs of breaking speed as we embark on Valentine’s Day, the first big shopping holiday of the new year. As Moody’s VP and Senior Analyst, Christina Boni told CNBC, “We expect the shift of purchases to alternative channels such as online and the off-price channel to continue in 2017.”
Jasmine Glasheen, Editor of Off-Price Retailing Magazine, loves to wax poetic on the retail industry and hunt for deals. When she’s not writing, you’ll find her comparing kombucha prices at Whole Foods.
