What are the takeaways from the best holiday season in six years?
According to Mastercard SpendingPulse, holiday sales in the U.S. from Nov. 1 through Dec. 24 expanded 5.1 percent, the strongest growth rate in the last six years. The gains were led by a 19.1 percent hike in online sales, but also helped by a recovery in some key categories.
Apparel sales improved 7.9 percent, the category’s best year-over-year gain since 2010, while home improvement climbed 9.0 percent. Electronics and appliance sales dipped 0.7 percent. Mastercard monitors spending both in stores and online via all forms of payment.
Reports earlier in the selling season from NRF, Adobe and others also signaled strength this holiday season.
Apparel sellers are improving their performance through better inventory management and efforts to instill more freshness into offerings, according to analysts. Investments in digital by Walmart and others are similarly boosting online and overall omnichannel efforts. Adobe last week predicted BOPIS-related sales increased 47 percent over the holiday from a year ago, while mobile spending soared 57 percent.
Taylor Schreiner, director, Adobe Digital Insights, said in a statement, “Retailers who can offer the easiest shopping experience, whether through excellent use of data to anticipate shoppers’ needs or by providing an option for picking up products at brick-and-mortar stores, are the ones people are flocking to.”
But much of the improvement is being attributed to external factors. Improving consumer confidence supported by stronger employment, improved wages and tax cuts are offsetting concerns over stock-market gyrations, a potentially slowing economy and the partial government shutdown.
“The reality is the consumer felt comfortable enough to splurge and we’re hearing more and more it’s for items for themselves,” Bob Phibbs, CEO of The Retail Doctor and a BrainTrust panelist, told USA Today.
Also on Tuesday, Amazon said it generated a “record-breaking holiday season,” selling “millions more” Echo Dot and other Amazon Devices and signing up “tens of millions” to free Prime trials worldwide.
Amazon may be grabbing much of the online gains. Edison Trends, which tracks the market share of online retailers, reported that Amazon took 81 percent of online sales against other big-box retailers from Dec. 1 to Dec. 19.
- Mastercard SpendingPulse: U.S. Retail Sales Grew 5.1 Percent This Holiday Season – Mastercard
- November retail sales increase 5 percent over 2017, putting holiday spending on track to meet NRF forecast – NRF
- NRF forecasts holiday sales will increase between 4.3 and 4.8 percent – NRF
- U.S. Holiday Retail Sales Are Strongest in Years, Early Data Show – Wall Street Journal
- Retail is having its best holiday season in 6 years – CNBC
- Bigger paychecks and cheap gas drive best holiday shopping season in six years – CNN
- Holiday cheer hits retail, with strongest seasonal sales in 6 years – USA Today
DISCUSSION QUESTIONS: Do you see more external than internal factors driving the healthier growth rates this holiday-selling season? What encourages you and worries you most about the 2018 retail holiday season? Does the favorable performance indicate that retail has smartly adjusted to the digital disruption of recent years?