Early retail sales results on the still-in-progress 2019 holiday season spell a good outcome living up to expectations.
On Thursday, Amazon said it had its best Christmas ever, and the Mastercard SpendingPulse Holiday report indicated that holiday sales increased 3.4 percent and online sales alone grew 18.8 percent from Nov. 1 through Dec. 24 compared with 2018. Mastercard’s figures excludes auto sales.
The week between Christmas and New Year’s is one of the biggest volume periods of the year, some say the third or fourth largest, next to the two weeks leading up to Christmas and the Black Friday-Cyber Monday stretch.
Retailers are expecting big business through New Year’s and the week after, with stores and brands really ramping up on the discounting on Thursday, often up to 50, 60 and 70 percent on many items. There were plenty of “sale on sales” offerings with an extra 20 to 30 percent off already discounted merchandise and a plethora of clearance events. Ross Stores launched its year-end clearance; Kate Spade was up to 65 percent off. Shopbop was 70 percent off, and Joe Fresh had a “Boxing Week” clearance for up to 50 percent off.
“E-commerce sales hit a record high this year with more people doing their holiday shopping online,” said Steve Sadove, senior adviser for Mastercard and former chief executive officer and chairman of Saks Inc. “Due to a later than usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices.”
Jeff Bezos, Amazon founder and ceo, said in a statement, “This holiday season has been better than ever thanks to our customers and employees all around the world.”
Amazon didn’t give any specific numbers, but said shoppers across the globe purchased billions of items online, including tens of millions of Amazon devices and millions of fashion and beauty products in the U.S.
In U.S.-based Amazon stores, the most popular departments were fashion, home and beauty. The most popular fashion brands included Carhartt, Amazon Essentials, Adidas and Champion. Cold-weather shoes, apparel and accessories from Columbia, Calvin Klein, Alo Yoga, Goodthreads and Daily Ritual also sold well. Other best-sellers were the puffy Orolay women’s down jacket and Haus Laboratories by Lady Gaga beauty products. Items delivered same day or in one day quadrupled in number from 2018, Amazon said.
MasterCard reported 3.4 percent holiday retail sales gain represents “a very strong number — and the Internet went gangbusters being up 18 percent,” said Sadove.
Some other retail experts and trade organizations see holiday sales at approximately 4 or 5 percent ahead.
Sadove said the holiday business was better than he originally thought it would be, noting that it started with a strong Thanksgiving period, followed by a lull in early December, but business “came back very strong. Last Saturday and Monday were big days. When you put it together, it was a very solid season.”
Retailers were up against six fewer days between Thanksgiving and Christmas compared with last year as Thanksgiving was on Nov. 28 this year. However Sadove said, “I don’t think it made much of a difference. People had a certain [amount of] money to spend, and either they spread out the shopping or rushed to do it in the end.”
While the Internet was “a massive factor…you still have 85 percent of commerce being done in brick-and-mortar stores,” Sadove said. “The real winners were those that did a good job of offering omnichannel experiences.”
He emphasized that this week and next are important for retailers as people return gifts and redeem gift cards factoring big into sales and profitability. Precisely how retailers fared for holiday 2019 won’t be known until they release fourth-quarter figures in February and March.
According to Mastercard, from Nov. 1 to Dec. 24:
* Total apparel gained just 1 percent.
* Jewelry experienced 1.8 percent growth in total retail sales.
* Department stores saw an overall sales decline of 1.8 percent.
* Electronics and appliances were up 4.6 percent, while furniture and home furnishings grew 1.3 percent.
Holiday e-commerce sales comprised 14.6 percent of total retail.
Looking at year-over-year e-commerce growth by category, MasterCard said specialty apparel rose 17 percent; jewelry was up 8.8 percent; electronics rose 10.7 percent, and department stores rose 6.9 percent.
E-commerce accounted for 15.4 percent of Black Friday sales and 24.5 percent of Cyber Monday sales.
According to research from Cowen Inc., traffic in stores in the U.S. decreased 10.7 percent in week three of December and is expected to be down 7 to 9 percent in the fourth week of December, with online sales making up for some of the decline in store visits.
According to Planalytics, which forecasts the weather and helps retailers plan their businesses based on the predictions, for this week ending Dec. 28, it will be mostly dry for large portions of the U.S. Next week, ending Jan. 4, is forecast to be colder than last year in the Northeast but warmer in the West, and wet conditions return from the Southwest to the Northeast leading up to New Year’s Eve and New Year’s Day, which will include rain for many and snow for some, potentially shifting post-Christmas purchasing from in-store to online.