What does the strong 2016 Christmas foretell for retail in 2017?
Initial reports suggest that the 2016 Christmas selling season was one for the record books. Now the question becomes, will consumers continue to spend freely in the year ahead?
Consumers spent an average of $711 on gifts and other items for the season, according to a post-holiday survey by the International Council of Shopping Centers (ICSC). That figure was four percent higher than the number projected by the ICSC back in October.
“Consumer confidence continued to improve into December and we saw this optimism reflected in the holiday spending numbers,” said Tom McGee, president and CEO of ICSC. “The strong holiday shopping season suggests a positive environment for retail sales overall.”
The research firm, Conlumino, said sales increased 3.8 percent for the season, the biggest improvement since 2011, reported USA Today. Online sellers had a lot to smile about with sales jumping 17.1 percent. Sales made in stores improved 2.6 percent.
The ICSC survey found that retailers with a mix of online and physical stores were well positioned to take advantage of consumer shopping trends this holiday season. Seventy percent of total dollar purchases were made in retailers with both a physical and online presence. Ninety-one percent of shoppers visited a store, the same percentage as 2015.
“The convergence of physical and digital continues to be important as consumers have come to expect an integrated experience allowing them to buy products through a variety of channels,” said Mr. McGee. “The survey data proves that omnichannel retailers are the real winners this season as they offer purchasing options that satisfy the shopping behaviors of all generations.”
While the retail industry as a whole did well over the holidays, there are sure to be losers with department stores and specialty apparel outlets among them.
Steven Barr, retail consumer leader for PwC, told USA Today that he expected to see “significant numbers” of stores closing in 2017.
The shift of business from stores to online will continue to pressure retailers on how best to manage their physical assets.
“The retail store is not dead,” said Mr. Barr, “but the retail store of the past is dead.”
- Holiday Spending Up, Surpassing Intentions – International Council of Shopping Centers/Business Wire
- Expect more store closings despite big holiday sales – USA Today
- Will retailers find gold or coal in their holiday stockings? – RetailWire
DISCUSSION QUESTIONS: What key insights should retailers take away from the 2016 Christmas shopping season? How do you expect retailers to translate these insights into actions in 2017?