The slumping economy in 2008 significantly dampened retail Christmas sales, which tallied about $245 billion, some 2.8% less than the previous year. With the economy on the mend, sales may be a bit better this time around.
Although the traditional starting date for holiday shopping is the Thanksgiving weekend, many people have been taking advantage of whatever bargains they have encountered over the past few months. Most shoppers begin serious browsing in October and start opening their wallets in early November.
Holiday sales, generally defined as purchases made in November and December, represent 25% to 30% of total yearly revenues for most retailers. The weekend that begins with Black Friday generates about 10% of holiday sales, with the weekend prior to Christmas accounting for some 30%.
While bad weather kept many shoppers home last weekend, expenditures and traffic totals were still up over 2008. For the first official 2009 Christmas shopping weekend (Thanksgiving through Sunday), spending amounted to around $41.2 billion, an increase of 0.5% above last year. During this period, a total of approximately 195 million people either visited stores or searched for their desired items online, an increase of 23 million over this timeframe last year. Also, gift cards may be on the way back as almost eight out of every ten people are planning to give them.
Although many retailers were hoping for more, the amount does indicate that American shoppers are becoming more willing to spend. With consumer spending typically responsible for some 70% of the economy, that is certainly a move in the right direction.
Another direction apparent in consumers’ shopping patterns is the drift toward thrift. Employment challenges are likely contributing to a drop in per person spending, which was down more than 8.0% from $373.00 last year to $343.00. Less expensive items were also highly favored by shoppers last weekend.
Bargains now seem to be the name of the game and retailers are resorting to myriad discounts to lure buyers. Early morning door-buster sales were a popular feature of the Thanksgiving weekend, and there are signs that the discount approach may become the blueprint for the future. Shoppers accustomed to reduced prices may become more hesitant in the future to pay full price. In fact, some analysts suggest that about 86% of consumers may refrain from making purchases unless tempted with a discount, and that a quarter of shoppers may demand steep price reductions before opening their wallets.
Yet another distinct and growing pattern is shopping via the Internet. Online retailers reported an 11% jump on Black Friday, and on Cyber Monday, the e-retailers’ version of Black Friday, sales were estimated to have risen by 14% over 2008. Additionally, e-shoppers typically bought 30% more items per order compared to last year. Moreover, consumers who plan to expend at least 30% of their holiday shopping budgets online are expected to buy twice as much as individuals who purchase primarily in brick-and-mortar sites.
According to Akamai, an Internet monitoring firm, an average of about 4.2 million consumers across North America visited shopping Web sites per minute on Monday. The National Retail Federation estimated that 96.5 million Americans anticipated shopping online that day compared with 85 million on Cyber Monday 2008.
Although it is difficult to predict the total dollars to be spent during the 2009 holiday, indications are that people are currently much more willing to fill their shopping carts, whether physical or virtual, compared to this time last year. A clearer picture will soon emerge as 69% of consumers say they plan to make the bulk of their purchases by December 7.
Fortunately, for busy folks and procrastinators (or worse, busy procrastinators) there are still three weeks before we have to make our final choices.