Posted by Alex Jackson on January 04, 2019
Congratulations internet and brick & mortar retailers, you just wrapped up a pretty phenomenal holiday season. Just how good was it? Well, the numbers according to Mastercard are about $850 Billion in retail sales from November 1st to December 24th Christmas Eve. This represents a 5.1% increase over last year marking the fastest growth in sales in over six years. When you dig a bit deeper, there are some interesting takeaways from this holiday season that warrant closer inspection.
Apparel had a banner season- As a category, apparel certainly put its best foot forward this holiday season. According to data reported by Mastercard, the category saw an 8% increase in sales over 2017 during the same holiday period noted earlier November 1st to December 24th. What was driving the big boost to the category this year? A few factors which included one we discussed in a previous article the self-gifting phenomena. Yes, it’s real and consumers really spent quite a bit this year to keep themselves happy this holiday season. Other contributing factors included an early onset of cold weather and many retailers just keeping their shelves filled with just enough stuff and offering fewer discounts than in previous years.
Click and collect was big this season- There was an awful lot of last-minute holiday shopping this season and consumers unwilling to pay exorbitant fees for last minute holiday shipping instead opted to pickup in-store in record numbers. According to Adobe Analytics in-store pickup rose over 47% this season. Big box retailers like Best Buy, Kohl’s and Target benefited the most from the click and collect sales model as these companies have been quite successful in creating a user-friendly experience. As any consumer who remembers attempting an in-store pick up a few years ago will remember, most store locations had no dedicated pickup point you simply wandered in with your receipt and hoped you could find someone that was willing to help you. Now that’s changed pickup points are permanent locations and they make it fast and painless. This is one very important way that traditional brick and mortar retail has a leg up on the internet only retailers. Why wait a day or two for shipping and have to pay extra for last minute shipping costs when you can simply drive down to your local Target to pick it up?
Signs point to continued strong sales post-holiday season - Consumer confidence going into the holiday season this year was at record highs. This was driven in part by increasing wages and record low unemployment. The consumer was also given an early holiday present this year in the form of lower fuel costs. Extra disposable income in their pockets translated into increased spending this holiday season. As 2019 dawns these low fuel costs are expected to remain, and many consumers will soon be benefiting in the form of their tax returns. A confident consumer with a job and increased disposable income not to mention a tax return check coming soon is likely to keep on the spending roll that they went on this past holiday season.
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