The ’75 Days of Christmas’ Could Bode Well for Retailers
Mastercard SpendingPulse is calling this year’s holiday shopping season “The 75 Days of Christmas.” And the Purchase, N.Y.-based company, which reports on national retail sales across all payment types in select markets around the world, expects retail sales (excluding automotive and gas) to grow 2.4% this holiday season when compared to last year.
According to Mastercard SpendingPulse, the holiday shopping season kicked off Oct. 11 this year and will last through Dec. 24. Of course, that happened because of the COVID-19 pandemic, as retailers began promoting holiday sales early to offset crowded stores and take advantage of booming e-commerce sales.
Some results are already in: Mastercard SpendingPulse reports that overall retail sales (excluding automotive and gas) grew 8.3% during the week of Oct. 11 compared to the same week in 2019, with e-commerce sales increasing 66.5%.
“This year may look different than years past, but I’m optimistic as the sales outlook is far better than economists might have expected earlier in the year. To put it in perspective, the 2008 recession saw holiday season declines of -3.5%, so this could be a happy holiday indeed,” said Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Inc.
Here’s what else Mastercard SpendingPulse is expecting this holiday season as part of its ongoing insight series, “Mastercard’s Recovery Insights: The Evolving Consumer,” which looks at changing consumer habits, and what that means for retailers:
• Online, anytime points to record e-commerce highs: Online sales growth has fueled retail through the pandemic. With social distancing measures in place and health concerns running high, e-commerce’s share of overall retail sales is expected to jump from about 14% in 2019 to over 20% in 2020.
• ‘Tis the season — earlier than ever: While Black Friday used to kick off the official countdown to the holidays, shopping started much earlier this year. Cyber deals began being offered in October with major e-commerce promotions serving as important milestones. It will continue into November with Singles Day in China and extend through the season.
• Shopping local, shopping small. With mobility impacted by the pandemic, and many consumers still working remotely and children attending school virtually or on a limited in-person basis, many consumers turned to their neighborhood stores and suppliers. This shrinking “retail radius” is also contributing to the shift to e-commerce.
• Travelers remain grounded: With international travel restricted, many families will be staying home or traveling locally this holiday season. This will have a ripple effect, impacting larger cities as well as the luxury stores and hospitality companies that cater to overseas tourists.
• Reimagining brick-and-mortar stores with a focus on the omnichannel experience: Caution and convenience remain top of mind for many consumers, and retailers are responding accordingly. Buy online, pick up in store as well as technologies like contactless will remain important as retailers establish innovative ways to allow this type of low-contact experience.