Get Shopping!

November 25, 2019

US holiday retail sales (November 1st to December 31st) are forecast to top $1 trillion this year: the first-ever trillion-dollar holiday season. Cyber Monday alone is forecast to surpass $10 billion in online sales and is expected to be the biggest online shopping day in US history. Other big retail sales days this holiday season include Black Friday, Thanksgiving, and “Cyber Tuesday.”

There are a few large variables that could cause holiday retail sales to drop below the $1 trillion mark. With Turkey Day falling so late this year we have six fewer days between Thanksgiving and Christmas than in 2018. Rising tariffs and stock market volatility also present a challenge for the season’s spending growth potential. However, consumer confidence remains healthy, unemployment remains low, and the S&P 500 is up over 24% for the year.  

Major e-commerce platforms will once again dominate the online shopping landscape this season. Online retailers with $1 billion or more in annual sales include Amazon, Walmart and Target. 62% of U.S. households now have Amazon Prime accounts! The on-line Big Three generally experience a 65 percent boost in sales during the holiday shopping season. Moreover, customers are responding to improvements in the mobile versions of their online stores which make shopping by smartphone more intuitive and streamlined. In fact, smartphone transactions will account for 36 percent of all online sales this holiday season, up 20 percent year-over-year. Baby products, toys, and alcohol are popular items that shoppers order on their smartphones. For larger purchases requiring more research, such as furniture orders or tech gadgets, shoppers tend to use their desktops.

Despite the long forecast demise of brick and mortar stores, they still make up 86.6% of holiday sales! In-store sales for the 2019 holiday season are projected to increase by 2.5% to $872.25 billion. One reason physical stores have an advantage over online stores is they have the unique ability to continue selling products late into the holiday season. In the unlikely event that you are late in buying a gift for a loved one, you can still run to a local store and have the present wrapped as you watch. The last-minute alternative online is overnight delivery, but this can get expensive and a little unreliable

Ecommerce also cannot beat a brick and mortar store in terms of physicality. It is just more reassuring to go into a store to see and touch the product. Upselling is also far more effective in brick and mortar stores. People tend to spend more than they intended when they go out to shop. Retail stores craftily position products near the cash register to facilitate impulse purchases as shoppers wait to check-out. In-store staff also push product sales, which cannot be achieved by online retailers. 

We’re hoping the market holds up a little better than last December and that retail sales can reach the $1 trillion mark this holiday season. Wishing you all a Happy Thanksgiving!

Dan Hall