Holiday shopping season may be nearly finished, but the deals will keep coming

December 26, 2017

By Joe Taschler | Milwaukee Journal Sentinel

Even though the holiday season is drawing to a close, there will be plenty of deals available between now and New Year’s Day, retail market watchers say.

“For shoppers and retailers alike, Christmas Day isn’t necessarily the finish line,” Ray Hartjen, marketing director at RetailNext, a retail analytics company, based in San Jose, Calif., said in an email. “Retailers will be looking to move inventory, particularly in fashion and specialty apparel, as the spring season is right around the corner.”

The potential for more deals comes as Americans supplied a final flurry of spending to give retailers their best holiday season sales since 2011, according to one measure released Tuesday.

U.S. year-end holiday retail sales rose 4.9% compared with the same period last year, a welcome gift to U.S. retailers amid new signs of consumer confidence, according to the sales report issued by Mastercard SpendingPulse.

The findings were based on aggregate sales activity in the Mastercard payments network, along with survey based-estimates for other forms of payment, including cash and checks, Mastercard said. The report excludes auto sales.

Consumer spending makes up about 70% of U.S. economic activity and a huge portion of that shopping takes place during the holidays.

“Overall, this year was a big win for retail,” Sarah Quinlan, senior vice president of market insights, Mastercard, said in a statement issued with the report. “The strong U.S. economy was a contributing factor, but we also have to recognize that retailers who tried new strategies to engage holiday shoppers were the beneficiaries of this sales increase.”

Some of the top performing retailers for the season include Menomonee Falls-based Kohl’s Corp., said Burt Flickinger III, managing director of Strategic Resource Group, a retail and consumer industry consulting firm in New York City.

“Kohl’s has had a phenomenal season,” Flickinger said. “Kohl’s epitomizes the best quality at very competitive prices with good service and that’s what the customer wants.”

Among Flickinger’s other top performers this holiday season are Macy’s, Meijer and J.C. Penney, he said.
And, while retailers will be looking to unload inventory at year’s end, there will also be plenty of deals on new items, Flickinger said.

“It is built into their plan,” Flickinger said. “Previously it wasn’t, but sales were so strong in November that they adjusted the plan for January, February, March and calendar year 2018 to have a lot of new merchandise.”

Although the Mastercard report showed the 2017 holiday shopping season from Nov. 1 to Dec. 24 overall was a winner for retailers, the results differed by category.

Shoppers sent sales of electronics and appliances up 7.5%, the strongest growth in the past 10 years. Sales of home furniture and furnishings grew 5.1%. Jewelry sales rose 5.9%, largely driven by last-minute sales.

Heavy early-season promotions worked, with the first three weeks of November delivering significant sales increases.

Shoppers continued spending late into the holiday season, making Saturday second only to Black Friday in terms of single-day spending, according to the Mastercard report.

The results delivered a financial boost to retailers during a year in which dozens of retail companies sought bankruptcy protection as they attempted to cope with shifting consumer tastes and a continuing shift to e-commerce transactions.

Online retail shopping increased 18.1%.

Amazon reported record global shopping, with more than 4 million people starting Amazon Prime free trials or paid memberships in one week alone during the holiday season.

Amazon said in a statement on Tuesday that more than 1,400 electronics products were ordered per second on a mobile device this holiday season.

In October, the National Retail Federation forecasted holiday retail sales to increase between 3.6% and 4% for a total of $678.75 billion to $682 billion. On Tuesday, NRF President and CEO Matthew Shay predicted the industry group’s final data due in early January would meet or exceed the forecast.

“Retail is absolutely not dead,” STORES Magazine editor Susan Reda said in an NRF podcast. “It’s not collapsing, it’s not vanishing, it’s alive and well … in the middle of this transformation.”

Meanwhile, retailers this week will also be dealing with an onslaught of returns, especially in the online sector.

“American shoppers have trained themselves to order way more than they expect to keep, particularly in clothing,” Hartjen said. “A good 30% of online apparel and shoe orders are going to be returned in the next week or two, and brands will be pushing to move that inventory yet once again.”