Learning from the Hiccups of Holiday 2015

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\"RRThe 2015 holiday season was all over the map, but at the end of the day, they spent well, to the tune of a 7.9 percent gain over last year, according to MasterCard SpendingPulse. That number exceeded pre-holiday predictions of between 3.5.to 5 percent increases, leaving retailers to consider what went well (mobile shopping) and what needed work (in-store pickup), and how to better counter Mother Nature next year.

Overall, Retail Metrics\’ Ken Perkins, founder and president, said early reports were encouraging. \”For example, the numbers from Francesca\’s were solid,\” Perkins said. The retailer last week raised fourth-quarter guidance, which included an expected high-single digit increase in comp-store sales, versus an earlier prediction of mid-single digit increases. \”L Brands was up 8 percent, Children\’s Place comps increased 7 percent. Even JC Penney saw a 3.9 percent gain. The one fly in the ointment was Macy\’s.\”

Macy\’s recently announced plans to cut 4,500 jobs, mostly store employee positions, due to a 4.7 percent decline in holiday sales. Terry Lundgren, CEO, said four-fifths of the sales declines were related to a drop in demand for winter coats, sweaters and boots, and accessories like hats and gloves due to higher than normal temperatures.

 

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\”Shoppers aren\’t as concerned with Black Friday as they used to be because deals are offered all season,\” Perkins says. What we\’re seeing is a holiday shopping season that\’s morphed into a big turnout over Black Friday weekend, then there\’s a long lull until Super Saturday right before Christmas.\”

 

Going forward, this could mean retailers will time their mobile, online, and in-store promotions differently, depending on the month, week, or even the day during the season.

Black Friday

Before Holiday 2015 kicked off, 44 percent of shoppers planned to buy gifts in-store on Black Friday, while 47 percent said they would shop online, according to the Monitorâ„¢ data. Consumers expected their next biggest days for shopping in-store would be Small Business Saturday (16 percent), after Christmas (16 percent, down significantly from 25 percent in 2013 and 2012) and on Thanksgiving Day (13 percent).

Cyber Monday

Meanwhile, nearly half of all shoppers planned to buy online during Cyber Monday, along with 23 percent who planned to take advantage of national free shipping days, 17 percent who planned to buy on Thanksgiving Day, and 15 percent who planned to shop online after Christmas.

Mobile

The dramatic rise in mobile shopping was the biggest change of the 2015 holiday season. Mobile accounted for 18 percent of total holiday spend, up from 14 percent in 2014. Two-thirds of U.S. adults own a smartphone, according to Pew Research Center, and these consumers have become more comfortable with the idea and process of m-commerce. \”Retailers are building their mobile platforms with strong customer engagement strategies in mind, allowing their shoppers to easily \’click and buy\’ or research in-store availability,\” says the NRF\’s Vicki Cantrell, senior vice president and Shop.org\’s executive director, in an announcement about m-commerce. Smartphone sales grew 53 percent in 2015, accounting for 17 percent of total online sales for the year, versus 14 percent for tablets. \”For today\’s consumer, this is all just a part of modern-day shopping; though for retailers, it\’s a constant balance of where and how much to invest into the mobile experience and infrastructure.\”

Of course, all the online buying meant in-store traffic was lighter. RetailNext reported a significant 8.3 percent drop in foot traffic since last year. Perkins expects flat or slightly lower traffic to continue next holiday unless a bigger push is made to attract shoppers to malls and shopping centers — especially at the end of the holiday cycle when consumers are concerned online orders might not arrive on time.

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