Friday, November 6, 2020
Mastercard is predicting 2.4 percent growth in retail sales (excluding gas and automotive sales) over the year-end 2019 holiday shopping season, while Adobe Analytics expects online holiday sales to shatter all previous records, jumping 33 percent over last year.
Retailers and consumers, alike, are gearing up for a longer than usual holiday shopping season that appears to have already begun. Mastercard has dubbed it "the 75 Days of Christmas," with the kick-off in mid-October by many online retailers. According to Mastercard SpendingPulse, which measures overall consumer spending across payment types, retail sales grew 8.3 percent the week of October 11; ecommerce sales rose 66.5 percent that week.
Adobe said it expects Cyber Week (the surge in online shopping that typically occurs Thanksgiving through the following Monday) this year will give way to two Cyber Months: November and December. Online sales will surpass $2 billion each day between Nov. 1 and Nov. 21, and increase to at least $3 billion a day after that, according to Adobe forecasts.
Americans' online shopping this holiday season will total $189 billion, registering "two years' growth in one season," Adobe predicted. Smaller online retailers could be the biggest beneficiaries, with a 107 percent boost to revenues, compared to a predicted 84 percent boost to revenues among the largest online retailers.
Mastercard said its data points to a similar trend. "With mobility impacted by the pandemic, and many consumers still working remotely and children attending school virtually or on a limited in-person basis, many consumers turned to their neighborhood stores and suppliers," Mastercard said. "This shrinking 'retail radius' is also contributing to the shift in eCommerce,"
Adobe said its analytics suggests better than half of all American consumers (51 percent) plan to support small and local retailers on Small Business Saturday, the Saturday following Thanksgiving; 38 percent plan to shop at local retailers' online stores throughout the year-end holiday season.
By the time the books are closed on 2020, the ecommerce share of overall retail sales will jump to 20 percent for the year compared to 14 percent in 2019, Mastercard added.
The one overarching trend described by both Mastercard and Adobe is that caution and convenience remain top of mind for many consumers, and retailers are responding accordingly.
One result is that buy online with pickup at stores or curbside options have become ever more important. Adobe predicts a 40 percent uptick in these orders this holiday season compared with 2019. And as people panic-buy the week before Christmas, those orders are expected to reach 50 percent of all orders at retailers offering this option, Adobe said.
"This year may look different than years past, but I'm optimistic as the sales outlook is far better than economists might have expected earlier in the year," said Steve Sadove, senior advisor at Mastercard. For example, Sadove noted that the holiday shopping season in 2008, at the start of the Great Recession, retail sales fell 3.5 percent compared to the previous year.
Year-end holiday sales typically account for about 19 percent of total yearly retail sales, according to the National Retail Federation. The NRF has not yet published predictions for holiday spending this year, but in 2019, it said U.S. retailers rang up just over $729 billion in sales during the holiday season.
The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.