As of Thursday, December 28, 2017
It may be the best holiday season for retailers in years. That was the conclusion of one of the first surveys of the holiday 2017 sales season.
A day after Christmas, Mastercard SpendingPulse found that holiday sales inched up 4.9 percent and online shopping jumped 18.1 percent.
It was the largest year-over-year increase since 2011, according to the group, which bases its findings from sales activity on the Mastercard payments network. The survey found that specialty apparel and department stores saw moderate gains in sales.
Leading trade group National Retail Federation is scheduled to release its final numbers on holiday sales in early January. But Matthew Shay, the NRF’s president and chief executive officer, predicted sales would be on the high end, or even exceed, the trade group’s initial forecast of a 3.6 percent to 4 percent rise over the 2016 holiday season. “Sales and traffic were up across the board, from online and luxury retailers to department and discount stores, from Main Street to mega stores and everything in between,” Shay said.
In October, the NRF was optimistic about strong holiday business based on the nation’s low 4.1 percent unemployment rate and a good economy. Consumer confidence was high, and there was more time for the shopping season. This year saw one more day for shopping compared to last year because Christmas fell on a Monday.
Several Los Angeles–area mall managers said that retail traffic at their properties during the recent holiday season was even or slightly higher than last year. But e-commerce continues to change traffic patterns, said Susan Vance, marketing and sponsorship director at the Beverly Center in Los Angeles.
“As omni-channel retail becomes more prevalent, we are seeing a new consumer-shopping pattern emerge. Customers who have researched their potential purchases, gifts and trends online are coming into stores to make their final purchase, which we saw reflected in this year’s traffic,” Vance said.
The busiest shopping days of the season were forecast to be the first day of the holiday shopping season, Nov. 24, also known as Black Friday, and Dec. 23, nicknamed Super Saturday. Other busy days were Dec. 16, the third Saturday of December, as well as the day after Christmas, according to ShopperTrak, a market-research company that measures retail traffic.
At South Coast Plaza in Costa Mesa, Calif., heavy retail traffic on Super Saturday was deemed to be the same as the first wave of shopping on Black Friday, according to the retail center.
If traffic seemed moderate at malls, business was still relatively good at many of these traditional retail centers, said Jeff Van Sinderen, a retail analyst at B. Riley & Co. “[Shoppers] were going with the intention to make purchases,” he said. “They were making fewer trips, spending less time walking around, scoping things out and spending more time making purchases when they were at bricks-and-mortar retailers.”
The 2017 holiday season was marked by retailers gaining a new comfort and flexibility in dealing with a new market increasingly dominated by e-commerce and omni-channel retail.
In 2015, many traditional retailers were stunned by heavy competition from online sites. Before that season started, they ordered too much inventory. Because shopping sites claimed a much larger market share of purchases, many retailers found themselves having to put a lot of goods on sale, which hurt margins, Van Sinderen said.
Since 2015, retailers have worked with leaner inventories. “If you look at a two-year comparison, I think this season’s overall results will be substantially healthier than they were two years ago,” Van Sinderen said. “We’re beginning to see light at the end of the tunnel in terms of businesses being better positioned and supply being better balanced with demand in apparel.”
He estimated that retailers’ promotions and discounts for this holiday season were even with last year.
While retailers have learned how to better roll with the punches of a new economy, turbulence remains ahead. “We’re seeing signs of stabilization,” Van Sinderen said. “But more stores will close. More bankruptcies will happen. It is a multiyear process that is playing out.”
This holiday season was not dominated by one fashion trend, said Mercedes Gonzalez, director of Global Purchasing Companies, a New York City–based fashion strategy and brand development agency. But some trends stood out.
“Everyone was looking for luxury fabrics—cashmere or cashmere blends,” she said. In the freezing Northeast, flannel-lined leggings have been popular, she said.
Another popular trend was gifts involving charity. “People were looking for things with an ethical story behind them. There was novelty added, but people were seeking it this year,” Gonzalez said. “Price wasn’t an issue this year; it was quality and story. It can’t be mass-produced.”