Although Americans are starting to shop for their holiday gifts earlier in the year, that doesn’t mean that they’re finishing earlier. The National Retail Federation estimated that 155.7 million people would head to stores on Dec. 17th, the last Saturday before Christmas (compared to 99 million shoppers over the Thanksgiving weekend).
Although the real figure is somewhat lower—in part because of poor weather conditions over the northern and central regions of the U.S.—retailers’ competitive (yet cautious) promotional pricing meant that 2016 might be the best holiday season for sales in a decade, according to Customer Growth Partners (CGP). In particular, growth in consumer confidence, income, low gasoline prices, food price deflation, and record stock prices were expected to contribute to an increase in retail sales.
According to WWD however, even though foot traffic was healthy on Super Saturday, shoppers didn’t bite unless there were sizable discounts. Apparel and fashion retailers pegged 3–4% as a realistic growth figure, conforming to the NRF projection that holiday sales would increase 3.6% in 2016. CGP observed that softline products in particular were being promoted at 40–50% off. But thanks to that, the NPD reported that apparel performed the best of the five industries it tracks on Super Saturday—those industries are apparel, toys, technology, athletic footwear, and prestige fragrances.
NPD’s Chief Industry Analyst, Marshal Cohen, noted that “discounts have been too readily available this holiday season to offset declines compared to last year”; dollar sales were 11% lower in the week ending Dec. 17th compared to 2015. Although most discounts in the 50% range were planned for Black Friday, CPG noted that those on the Super Saturday weekend seemed to be unplanned. Given that retailers were careful to maintain clean inventories and plan promotions throughout the holiday season to avoid this very problem, the real issue seems to be a distorted projection of rising consumer sentiment.
Even though department stores like Macy’s and discounters like Wal-Mart had some of the most dramatic price cuts in pricing (in their own history) this season, sales were strongest at off-price retailers like TJX and Century 21. Macy’s, Kohl’s, Sears, JCPenny, and Nordstrom all reported lower-than-expected sales for the months of Nov. and Dec. 2016.
While brick and mortar sales were weak, ComScore reports that desktop sales jumped 12% to $63.1 billion—when smartphone and tablet sales are factored in, the company expects the total online commerce figure to rise somewhere between 16–19%. In particular, Free Shipping Day on Dec. 16th was said to contribute $22 million in sales. In contrast, Adobe estimates that 2016 online mobile sales totaled $91.7 billion, up 11% from 2015. Mobile shopping made up 31% of sales, with 21% on smartphones and 10% on mobile. Either way, online shopping was king—Amazon claimed it had its “best ever” holiday season, shipping over 1 billion items worldwide.
Figures on returns aren’t out yet, but are expected to cut into retailers’ Q4 margins, especially for online purchases with free returns. There is still some hope for 2016 ledgers; although Christmas Eve wasn’t counted as Super Saturday this year because it’s a holiday, retailers like Wal-Mart, Target, Kohl’s, and Toys ‘R’ Us were open for business into the evening. According to the NRF, last-minute shoppers planned to purchase their gifts online (52%) as well as in department stores (42%), discount stores (27%), clothing or accessories stores (21%), electronics stores (18%), local/small businesses (14%), and grocery/supermarket stores (13%).