Holiday sales grew 5.1 percent this year to more than $850 billion, the highest in 6 years according to the Mastercard Spending Pulse report which tracks retail spending across all payment types, including cash and check, between Nov. 1 and Dec. 24. Big deal? For some retailers, the holiday season can represent as much as 30 percent of annual sales.
What drove the record increase?
Consumer confidence is high with low gas prices, unemployment and tax rates.
Results are still being tabulated, but compared to last year:
- Online sales jumped 19.1 percent.
- Home improvement increased by 9%.
- Apparel sales were up 7.9% — the category’s strongest holiday sales since 2010.
- Electronics and appliances dropped slightly declining 0.7%.
Demographic Data to Behold
While the percentage of men and women that shop for Christmas is fairly equal, men tend to spend more for the holidays with an average outlay of over $725 compared to $609 for women. Gen Xers (consumers 37-53) account for highest spending with an average of $782. Millennials (22-36) spend the second most during the holidays with an average of $609. Baby boomers (54-72) spend the least with an average of $576.
Mostly Good Tidings
- 46% of all holiday shopping occurs online.
- Consumers will spend more than $5 million on their pets for Christmas.
- The busiest shopping day is the Saturday before Christmas, not Black Friday.
- Retailers lose more than $3 billion a year due to return fraud with the highest rate being the return of stolen merchandise.
Eat, Drink & Play Carey
According to Amazon, Alexa set more than 100 million timers over the holidays. Eggnog and Moscow mules were the most-requested drink recipes on Alexa, and the No. 1 holiday requested song was “All I Want for Christmas Is You” by Mariah Carey.
2019 Outlook – Fear Not
Consumer confidence is key to continued economic growth. Jitters on Wall Street may impact consumer confidence, but the reality is unemployment is still low and wages are rising. For companies, higher wages means higher costs, plus there is the potential impact of tariffs and rising interest rates. But…
Be Joyful & Triumphant
Remember millions of consumers will spend billions every day. Demand keeps growing. If economic growth slows a bit, category managers need to fight a little harder for more market share. Our advice: Don’t become myopic. Keep a proper perspective – your brand is just one of many choices. Watch your competitors. See what’s working. Connect the dots. Find the hidden opportunities and have a wondrous and prosperous New Year!