[ The now classic John Lewis holiday ad ]
Since many retailers can receive between 20 – 40 percent of their sales during the holidays, tracking sales forecasts from Thanksgiving through the New Year is an important effort. This season, the early reports are positive but not overly different than last year.
The National Retail Federation is projecting that holiday sales will rise about 4 percent over last year to $602 billion. This is close to the percentage gain we saw last season versus 2011. Overall this year, some things will be different, while others will feel very similar.
First, the season is starting earlier than normal. According to Nielsen nearly one quarter of US consumers report to have already started their holiday shopping. Additionally, this year’s Cyber Monday is projected to be the biggest shopping day in history pulling in $2.27 billion. As for Thanksgiving, with many more retailers opening on that holiday, spending on turkey day should be up 21 percent versus last year. (If that trend continues, Thanksgiving spending could surpass Black Friday within five years.)
But alas, at our heart we’re also a bunch of procrastinators. That same Nielsen survey has 60 percent of people saying they’re “going to wait a bit” to start shopping. So we have a long season, plan your marketing schedules accordingly.
Second, we’re in-line with last season’s number of gifts as, on average, each person buys about thirteen presents for people. Per Deloitte’s Annual Holiday Survey, a mere six years ago we were buying double that amount. Ironically, we have more “friends” than ever, with 36 percent of people saying social media will play a role in their purchase decisions, but our gift haul has leveled off.
[ click to enlarge ]
This same Deloitte survey has also penned down expected spending on gifts at $421, which is up 9 percent over last season. This is good news and is tied to an overall increase in consumer confidence.
What’s important to note is the prominence of mobile this season. Not only has smartphone adoption crossed 50 percent there is a marked spending difference with those using multiple devices for their shopping.
One area to watch is the teen retail segment who is expecting a slow down. Abercrombie & Fitch was slow last quarter and said that younger shoppers “aren’t spending what they used to” driving their stock down 11 percent. This rippled across other retailers as American Eagle, Aeropostale, and Buckle all experienced a share sell off. Not what you want going into Q4.
So the holiday season will be long and slightly up, with consumers using online more to buy about the same number of gifts they did last year.
According to MSNBC, the most improved state for business is also the one with some of the finest outdoor recreation…
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