2019 Holiday Sales Wrap-up

The 2019 holiday shopping season exhibited mixed results, with online revenues growing substantially but brick-and-mortar sales showing meager or negative growth.

The entire holiday season — November 1 through December 31 — saw a modest total increase in overall revenues. MasterCard SpendingPulse, which records figures from November 1 through December 24, reported a total U.S. retail sales increase of 3.4 percent compared to 2018, with online sales growing 18.8 percent.

MasterCard reported that holiday ecommerce sales accounted for 14.6 percent of total retail spending. Apparel was the highest performing ecommerce sales category, with online sales growing 17 percent over last year, according to MasterCard. However, the overall sales increase for apparel was only 1 percent, meaning brick-and-mortar sales in this category under-performed.

The Numbers

Salesforce estimated total global holiday sales at $723 billion.

The Holiday Recap Report from Adobe Analytics reported online spending in the U.S. totaled $142.5 billion, representing 13.1 percent growth year-over-year for November 1 through December 31.

Additional U.S. data from Adobe:

• Average daily online revenue exceeded $2.3 billion for the holiday season, up from $2.1 billion in 2018, representing 13 percent year-over-year growth.

• Each day exceeded $1 billion in online sales except for Christmas Eve at $850 million. Even Christmas day saw online sales of $1.1 billion, demonstrating that gifts do not necessarily have to arrive on time and people may be shopping for themselves on that day. Sixty-seven percent of all visits and 48 percent of revenue came from smartphones on Christmas day.

• Smartphones accounted for 58 percent of traffic to websites and 84 percent of the holiday season’s ecommerce growth.

• Purchases via smartphones accounted for a record-breaking $50 billion in sales, an increase of 14 percent over 2018.

• Revenue from smartphones was 36 percent of the season’s total sales.

• Consumer electronics has the lowest share of the revenue from smartphones at 18 percent.

• Conversely, smartphones accounted for 45 percent of apparel and footwear sales and 46 percent of jewelry and cosmetic sales.

• Large ecommerce vendors (over $1 billion in annual revenue) did better than small vendors (less than $50 million annually) this holiday, with a 65 percent increase in sales over last year. Small merchants experienced a 35 percent upturn.

BOPIS

Adobe says that BOPIS — buy online pick up in-store — increased 35 percent over last year, with consumers using this option most frequently during the seven days just before Christmas. Salesforce calculated that retailers that offered BOPIS saw 56 percent more active digital users during the final five days of the season.

Consulting firm Kurt Salmon Accenture Strategy found that the average processing time for pick-ups declined by 30 percent from 2018, down to 2.5 hours. Eighty-eight percent of orders were processed on time, beating the 72 percent in 2018.

Kurt Salmon’s managing director Steve Osburn stated, “BOPUS is the real bright spot this year. Historically it was a difficult transaction for the customer, whereas now retailers have built ease and convenience into the experience by placing kiosks at the front of the store and allocating parking spaces.”

More physical retailers will likely join the BOPIS movement as it draws shoppers, who would otherwise just buy online, into stores. BOPIS will become a key differentiator for brick-and-mortar success.

Brick-and-mortar

The results for brick-and-mortar retailers were dismal. MasterCard SpendingPulse estimated that department stores experienced an overall sales decline of 1.8 percent while their online sales grew 6.9 percent. Here’s a snapshot.

• J.C. Penney’s comparable-store sales declined 7.5 percent from last year for the nine weeks ending January 4.

• Kohl’s reported that November to December comparable-store sales declined by .2 percent from 2018.

• L Brands, which owns Victoria’s Secret and Bath and Body Works among other brands, said comparable-store sales for the nine weeks ended January 4 declined 3 percent.

• Macy’s reported that comparable-store sales fell 0.7 percent from 2018 during the nine-week holiday period ended Jan. 4.

• Target saw a small increase, just 1.4 percent at physical stores and digital channels.

Those results will likely cause serious concerns for mall chains in 2020. Christmas holiday sales frequently comprise over 50 percent of annual sales for retailers. Presumably, we will soon see announcements for a substantial number of store closings. Macy’s has already announced the closing of 29 stores in 2020 while Pier 1 Imports will close 450 stores. Chico’s and the Gap have both announced they will close over 200 stores.