ShopperTrak on Thursday estimated that November and December 2013 retail sales increased 2.7 percent to $265.9 billion and foot traffic decreased 14.6 percent compared with the corresponding 2012 period. The strongest sales days were Nov. 29 (Black Friday), Dec. 21, Dec. 23, Dec. 14 and Dec. 22, in that order. Black Friday also was the top traffic day, followed by Dec. 21, Dec. 23, Dec. 22 and Dec. 14, consecutively. The National Retail Federation will announce its results on Tuesday.
“It was a very volatile holiday” in terms of weather, said Scott Bernhardt, president of Planalytics, which provides business weather intelligence for retail firms.
November was the coldest on record since 2000 in the U.S. and the coldest in Canada since 2006. Early snowfall in the South and the Rockies, late tornado outbreaks in the Midwest and rain and snow delays for travelers in the Northeast kept consumers home and away from stores, he said.
Thanksgiving (Nov. 28) was the coldest in more than 50 years in some U.S. markets, and December had periods of record cold followed by record warmth.
Then, there was the severe cold snap in the U.S. and southern Canada that began on Sunday, sending bone-chilling temperatures below the freezing mark. “We can’t ignore it,” Bernhardt said during a Webinar on Thursday. “It had such a major impact on the economy. About 150 million to 200 million people were affected by these events.” Planalytics estimated $5 billion in lost business on Monday and Tuesday.
Regionally, the Northeast, South and West were up 1.9, 3.2 and 5.1 percent, respectively. Sales in the Midwest were flat. Traffic in the Midwest, Northeast, South and West was down 17.1, 15.8, 14.2 and 12.1 percent, respectively. In the first quarter of 2014, ShopperTrak estimates retail sales to increase 2.8 percent and traffic to be down 9 percent.
Sales in apparel and accessories increased 3.5 percent, while traffic decreased 0.6 percent. Sales at electronics and wireless stores rose 4.8 percent, though traffic was down 12.9 percent year-over-year.
The company monitors consumer behavior from its 60,000 traffic-counting devices installed at malls, in common areas and at the main entrances of stores, which feed information to ShopperTrak nightly, according to the firm’s founder, Bill Martin.
Holiday 2013, with six fewer shopping days than last year’s period, snow and ice storms impacting business and rampant promoting industrywide, has been difficult to read, though Martin saw some clear trends. He noted that on each visit to the mall, the average shopper took in three to three-and-a-half stores, whereas in 2007, they took in four-and-a-half to five stores. Traffic is down due to shopping on the Internet or researching on the Internet before visiting malls so shoppers know more precisely where to shop to find what they want.
Kristin Drake, manager of client services at Planalytics, drew a connection between the weather and the increase in online sales. “Historically, when you’re looking at significant traffic-limiting events, especially leading up to a holiday period, we’ve seen that people will shift purchasing from traditional brick-and-mortar to an online purchase,” she said. “You can fulfill the need to get the gift prior to the holiday. We saw a lot of that this year because the storms were so frequent. People started to panic a little.”
According to NRF and ShopperTrak, total spending for the Black Friday weekend is estimated at $57.4 billion, a 2.8 percent drop versus last year.
Meanwhile, online sales for the holiday period rose 10.3 percent and mobile sales jumped 46 percent, accounting for 15 percent of all digital sales. Sales on Thanksgiving Day and Black Friday grew nearly 20 percent. Cyber Monday (Dec. 2) sales topped $2.29 billion, making it the biggest online shopping day in history. Social media drove more than $140 million in sales, according to Adobe Digital Index.
“Those walking into stores are now high-value clients,” Martin told WWD. “They’ve chosen your store after doing research online. With reduced traffic in the mall, there’s a higher associate-to-shopper ratio,” meaning service should be better.
Martin also said that last holiday, consumers took a longer-than-normal break from shopping after Thanksgiving weekend and didn’t resume holiday shopping until about a week before Christmas. Martin advised that for next year, retailers could intensify promotions in early December to try to capture sales earlier, and might then find less of a need to offer as many extensive markdowns at the end of the season.
“Retailers were pressured to offer deep discounts and promotions in the final week before Christmas to finish the holiday on a positive note,” Martin said. “In the future, retailers who promote throughout the season will be more successful than those who take a hiatus in the week or two after Thanksgiving.”
Much of the online growth was driven by e-commerce campaigns, Planalytics said. Consumers received 38 e-mails a week during the holiday period, compared with 25 for the rest of the year. The final weekend before Christmas saw a 37 percent jump in e-commerce sales over last year. But the increase in orders brought delivery challenges for shipping companies, and some purchases didn’t arrive by Dec. 25.
Martin characterized retailing as experiencing decelerating growth but still moving along as the economy continues to improve.