Holiday 2019 Predictions: Retailers Have High Expectations Despite Shortened Selling Season

Losing six days between Thanksgiving and Christmas isn’t putting a damper on holiday spending plans: the average shopper is planning to spend $1,047.83 this holiday season, up 4% from 2018, according to the National Retail Federation (NRF). Sales during November and December are expected to rise between 2.8% and 4.2% over last year, reaching between $727.9 billion and $730.7 billion.

“With Black Friday weekend and approaching deadlines, holiday shopping gets more intense as we get further into the season, but the number of days between Thanksgiving and Christmas simply isn’t as important as it used to be,” said Katherine Cullen, Senior Director of Industry and Consumer Insights at NRF in an interview with Retail TouchPoints. “Consumers have been starting their shopping earlier for years now, and retailers have responded by offering deals and promotions sooner. Our research shows that more than a third of shoppers start by Halloween, so the timeframe of the holiday season keeps expanding.”

Digital revenue in particular is expected to be even more robust. E-Commerce will see 13% year-over-year growth, fueling total sales of $13 billion between Nov. 1 and December 31, according to Salesforce, while Coresight Research projects that slightly more than 23% of all nonfood retail sales will move online this holiday season. Mobile dominated in 2018, driving 66% of online traffic, and that isn’t likely to change this year: a survey by GroundTruth found that 84% of respondents will rely on their phones to research, compare prices and check product reviews.

Despite the ongoing digital wave, brick-and-mortar is far from obsolete: 90% of shoppers will make purchases from a physical store, according to the International Council of Shopping Centers (ICSC). The divide between physical and online sales will continue to vary by product type, with areas like food and clothing still dominated by brick-and-mortar trips, while electronics and media sales continue to migrate online, according to Periscope by McKinsey.


Black Friday Still Dominates, But Don’t Neglect Other Shopping Holidays

A late Thanksgiving means retailers are going to launch their promotions earlier rather than wait for Black Friday. Digital revenue on the Tuesday and Wednesday before Thanksgiving is expected to grow 19% year-over-year, according to Salesforce. As a result, 50% of the season’s digital revenue will be collected by the end of Cyber Week, the same as in 2018.

The days leading up to Thanksgiving will, unsurprisingly, be fruitful for grocery stores, but beauty retailers also can expect a 10% spike in traffic, due to shoppers making sure they look nice on the holiday, according to GroundTruth. On Thanksgiving Day itself, a 34% increase in foot traffic at big-box stores is expected, and nearby retailers can take advantage of this situation with targeted, well-timed promotions.

“The holidays are busy for everyone, and retailers can take advantage of those last minute trips to the supermarket for butter or wine or cranberry sauce by using a strategic location strategy,” said Dan Silver, VP of Marketing at GroundTruth in an interview with Retail TouchPoints. “That way, they can retarget shoppers with last minute promotions or specials to increase visits.”

Even though many consumers will be shopping ahead of Thanksgiving week, 60% of consumers plan to shop on Black Friday and 50% on Cyber Monday, according to Periscope. However, Deloitte found that Cyber Monday may be pulling ahead of the traditional “winner,” Black Friday. Shoppers across all age cohorts say they plan to shop on Cyber Monday at higher rates than Black Friday:

  • Gen Z: 65% plan to shop on Cyber Monday, 58% on Black Friday;
  • Millennials: 61% on Cyber Monday, 54% on Black Friday;
  • Gen X: 49% on Cyber Monday, 39% on Black Friday; and
  • Baby Boomers: 44% on Cyber Monday, 37% on Black Friday.

Retailers should also keep an eye on Green Monday, the second Monday of December, which is the month’s biggest online shopping day, according to Yes Marketing. The holiday is not one-size-fits-all — only 6.9% of brands used the event in their marketing emails last year — but it presents a golden opportunity for smaller retailers that can’t always offer free or expedited shipping. A discounted or free shipping promotion on Green Monday can capitalize on the day’s increased traffic, while still ensuring customers receive their orders well before Christmas.

High Spenders Lean Toward E-Commerce While Omnichannel Is Universal

Retailers will want to make sure they target higher-income consumers with their marketing, as households with annual incomes of $100,000 or more will account for 65% of all holiday sales, according to Deloitte. This demographic also is expected to spend a larger share online:

  • Less than $50,000: 54% online, 42% in-store;
  • $50,000 to $99,000: 57% online, 37% in-store; and
  • $100,000 or more: 61% online, 34% in-store.

However, consumer demographics aren’t the only thing influencing the choice between online and in-store shopping, according to Periscope. For instance, while 55% of beauty shoppers plan to buy online, 71% will visit a store. Toys are almost evenly split, at 67% online and 64% in-store, while 72% of shoppers looking for gift cards will visit a store, compared to 42% buying them online.

Omnichannel shopping will be particularly important for customers who want to ensure they receive their last-minute purchases in time: retailers that offer BOPIS are expected to see 28% higher e-Commerce revenue in the last five days of the season compared to those who don’t, according to Salesforce. These store visits also present an opportunity for retailers to encourage additional last-minute shopping.

“Over 60% of consumers plan to buy online and pick up in-store,” said Stephanie Cegielski, VP of Public Relations at ICSC in an interview with Retail TouchPoints. “The convergence of digital and physical experience results in incremental sales for brands, with over 80% of consumers likely to make an additional purchase. Making the experience seamless and effortless is a major part of that, and these tactics combine to meet the consumer’s many disparate needs.”

Stores also provide a potential remedy to the inevitable post-holiday spike in returns: 77% of consumers plan to return a portion of their gifts, while 20% expect to return more than half, according to a survey by Oracle. A majority (65%) of shoppers intend to return gifts to the store, which gives retailers an opportunity to engage customers and boost post-holiday sales. A properly trained and equipped associate can turn a refund into an exchange, or even upsell a more expensive product that better fits the shopper’s needs.

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