Thursday, November 19, 2020
Fifty-nine percent of consumers had begun their holiday shopping as of early November, according to a survey fielded by the National Retail Federation and Prosper Insights & Analytics. This follows strong retail sales gains in October, despite the economic uncertainties brought on by the COVID-19 pandemic. Overall, retail sales were up 10.6 percent last month compared to October 2019, according to NRF. And for the first 10 months of the year retail sales were up 6.4 percent over the same period in 2019.
"Consumers have proven their resilience and willingness to spend as we head into the heart of the holiday season, and retailers continue to demonstrate their commitment and ability to ensure safe shopping environments for their customers and associates, with deep discounts, robust inventory and great experiences whether in-store or online," said Matthew Shay, president and CEO at NRF.
When it comes to in-store sales, retailers are taking many steps to protect the health and safety of customers, from regularly disinfecting POS devices to offering contactless payment options. About two thirds of 300 retailers surveyed in October by the payment gateway company NMI said they are disinfecting POS devices either after every customer (41 percent) or every 30 minutes (26 percent). On average, the majority of merchants (78 percent) expect to spend $300 or less a week keeping POS areas in their stores hygienic during the holiday shopping season, NMI found.
Fifty-seven percent of surveyed merchants have invested in contactless payment technologies, 35 percent now offer pay-in-app capabilities, and 26% have implemented digital receipts, NMI reported.
Among 1,000 consumers surveyed by NMI in October, 53 percent said they use contactless payments often for in-store purchases. Sixty-two percent of consumers expect to spend the same or more than they did during the 2019 holiday season, according to NMI. Just 38 percent expect to spend less.
"The holiday shopping season has traditionally kicked off during Thanksgiving week, but it's clear that a combination of factors has led nearly half of consumers to begin shopping in October or earlier this year," said Shannon Wu-Lebron, senior director of retail at TransUnion.
TransUnion's 2020 Consumer Holiday Shopping Report reveals a strong preference for online shopping experiences, with better than three out of four consumers surveyed indicating they plan to do the majority of their holiday shopping online. This compares to 57 percent who said the same last year. The TransUnion report is based on a survey of just over 2,600 adults conducted in late October.
TransUnion also reports that for the first time since it began polling consumers on holiday shopping plans, three years ago, more consumers are planning to conduct online shopping using mobile phones rather than laptops or tablets: 78 percent.
While convenience is important to consumers, security remains an ever-present concern, the TransUnion survey revealed. For example, 58 percent said they viewed additional identity validation steps during check-out as a positive. And half said they'd be more willing to make an online purchase from a merchant that provided two-factor authentication rather than just user name and password.
"As the pandemic progresses, it's clear that this is going to be an unusual holiday shopping season. However, some things do not change. Consumers continually want to have more convenient interactions with retailers without forgoing security," Wu-Lebron said. "With more and more online shopping choices, it's critical for retailers to meet these ever-growing consumer needs," she added.
The NRF-Prosper report offers some insights on some of the items consumers will be purchasing this holiday season.
Clothing and accessories are the most popular gift items, with 54 percent of consumers surveyed planning to gift these items. Nearly half (49 percent) said they'd be buying gift cards/certificates. Consumers plan to purchase between three and four gift cards, for an average spend of $163 per consumer, NRF said. Total gift card spend should top $27 billion, according to NRF calculations. Other popular gifts this year include books and other media (on the purchase lists of 34 percent of consumers) and food/candy (28 percent), the NRF said.
When it comes to paying for their purchases, credit cards remain the top choice, with 42 percent of consumers saying this is their preferred way to pay for holiday shopping, according to the NRF-Prosper data. But debit cards run a close second, being preferred by 41 percent.
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