While the final figures won’t be in until mid-January, the National Retail Federation is confident that holiday sales growth will hit or surpass the rate it predicted back in October, driven by favorable (read cold) weather, economic factors and pent-up demand.
At that time, the NRF predicted total U.S. retail sales in November and December, excluding autos, gas and restaurants, would grow 3.6% to $655.8 billion, significantly higher than the 10-year average of 2.5%.
“People want to go out and take advantage of these incredible discounts retailers have been offering throughout the holiday season,” said Bill Thorne, the NRF’s senior vice president for communications and public affairs, in a radio interview with WGN radio in Chicago. “There are also more shopping days, not only Black Friday and Cyber Monday but Super Saturday continues to grow as well. Also today is an important day as shoppers take advantage of after-Christmas sales. All of that adds up we think to a very strong holiday shopping season for retailers.”
While ecommerce continues to grow rapidly, with online sales 15% higher in November than in the previous year, Thorne said stores are still proving popular, even with digitally native millennials.
“People still like the store experience,” and it’s not just an age thing,” he said. “If you look at the polls, millennials still like to hang out at malls and have that experience. While online continues to grow, it won’t have a major impact on people’s desire people to go to stores and see, touch and feel products. They do a lot of good research online, then go out and decide whether they want to buy it at the price point they want. It’s a constant evolution.”
Creating a strong omnichannel experience, including investing in the online component, is what will continue to separate winners from losers during peak season, Thorne said.
“Those who have talked to consumers to determine what they want, how they want it and when they want to get it are the ones that are going to have repeat customers,” he said. “The biggest problem is when people don’t have (a good experience) online they’ll fill their cart, leave it and not come back. Retailers that have really prioritized making that a good experience, then bring them into the store for an even better experience, are the winners.”
Pulling Out All the Stops at the End
In the mad dash at the end of the season retailers reached deep into their trick bag, with some like Macy’s and Kohl’s staying open around the clock through Christmas Eve, while many offered steep discounting to pull in the procrastinators, according to a report in Fox Business. Others like Toys ‘R Us pulled more inventory into stores than previously to meet last-minute demand after shipping deadlines passed. Amazon did its part by letting Prime Now members place orders as late as 9:45 p.m. in select markets in order to receive their delivery before midnight struck on Christmas Eve.
Taking a slightly different tack, Walmart closed at 6 p.m. on Christmas Eve, two hours earlier than in previous years as it gave associates a break. This may have been in response to bad PR related to the big-box giant opening its doors at 6 p.m. on Thanksgiving Day.
The U.S. Postal Service even had some drivers making deliveries on Christmas Day, about as last-minute as you can be. Shoppers had mail packages by 5 p.m. Friday via Express Delivery to guarantee a Christmas delivery.
In a sign of the shifting dynamics of the retail industry, November and December now account for 21% of store sales in the U.S., down from a high of 25%, and are expected to continue dropping as ecommerce grows and retailers look to meet consumer demand for deals all year round, according to an Associated Press account.