2019's U.S. Holiday Sales Could Reach $1 Trillion
The Thanksgiving holiday has symbolized a lot of different things over the years. For me, it’s always been a family holiday. I’m sure that’s the case for a lot of people who celebrate the holiday — a day where families get together to spend time and share a meal together, something that becomes rare as families grow and get older. This is an important holiday for me because I like cooking and I love spending time with my family.
But Thanksgiving is also a symbol of something else: the beginning of the biggest shopping season in the U.S.
As the holidays approach, consumers are searching for the best deals and bargains — to get "more bang for their buck." Admit it. You love a good deal.
Buying something on sale and saving your money so you can buy more or set more money aside is ideal. That’s why Black Friday and Cyber Monday have become such highly anticipated shopping events.
If consumers go out on Black Friday and spend a lot, that’s good news for retail stores. More spending from consumers means stronger numbers for the retail industry. Black Friday sales have been an indication of how the rest of the shopping season will go.
If there are strong numbers on Black Friday, then investors can expect a profitable rest of the shopping season. This can help boost retail stocks. On the other side, if a company reports disappointing sales, then that could have investors skeptical about the company’s future, and its stock could begin to fall.
2019’s Holiday Could Be One of the Biggest Ever
According to the National Retail Federation (NRF), 2018 accounted for 165 million people shopping in stores or online during the period from Thanksgiving through Cyber Monday. Those people spent an average of $313.29 over the five-day period.
NRF also reported that in 2018, 25% of those people shopped online only and 21% shopped in stores only, and 54% shopped both online and in stores.
The NRF made predictions for this year’s holiday retail sales, estimating the period between November and December to increase between 3.8% and 4.2% compared to 2018. This holiday season is expected to be the first trillion-dollar holiday season.
ShopperTrak data for this year’s Black Friday sales are reporting that brick-and-mortar store sales decreased by 6.2% after shopping on Thanksgiving Day rose 2.3%.
It looks like this year more people were shopping online for Black Friday. Adobe Analytics reported $7.4 billion of online Black Friday spending. This is one of the largest online Black Friday totals ever.
The senior director of global retail consulting for ShopperTrak said:
There is no longer one way to shop on Thanksgiving Day and Black Friday. Black Friday continues to remain the busiest shopping day of the year by a long shot.
Shopping online during this retail holiday hasn’t been a new concept. Especially with the craziness of past Black Fridays, shopping online has become an easier and safer way to shop on this massive shopping holiday.
Department stores like Macy’s (NYSE: M) and Kohl’s have already been reporting declining traffic in their stores, and this year’s decrease in physical shopping at these stores is a big reality check for these companies.
Either they’ll have to focus more on selling products online in a better way or work harder at increasing traffic to their physical stores. There is still time to make an impact on sales this holiday season, but if they’re unable to do so, then there will be some problems ahead for department stores like Macy’s and Kohl’s.
ShopperTrak’s data indicates that eight of the 10 predicted busiest shopping days of the year are still to come as the December holidays arrive. Cyber Monday, which happened on December 2, is expected to break records as the biggest online sales day ever — Adobe Analytics estimates Cyber Monday to bring in an estimated $9.4 billion.
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Smartphone Sales Are Rapidly Increasing
Not only have online sales gone up this Black Friday weekend, but mobile orders have also seen an increase. $2.9 billion of Black Friday sales happened on smartphones. Mobile sales have been increasing faster than web-based purchases through computers. This could change the way retailers approach the next holiday season, focusing more on how to attract mobile users.
Over the weekend, I was getting a lot of advertisements through apps. The rise in mobile sales doesn’t come as a surprise to me. I’m on my phone or iPad more than my laptop. I check my email on my phone, and when I see a deal, I click the email that directs me to that deal. It’s become a lot easier to buy on our phones. Sometimes with just a few clicks, you’ve completed your purchase.
This is good news for retail giant Amazon.com (NASDAQ: AMZN). Amazon has its online site and its app to help consumers easily buy and take advantage of deals with only a few clicks.
Adobe said that e-commerce “giants” with over $1 billion in sales annually doing better than smaller sites — these giants had more smartphone sales and 66% conversions on browsers on smartphones. These giants, like Amazon, have seen a 62% boost in sales this season compared to 27% from smaller retailers.
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Until next time,
Monica Savaglia is Wealth Daily’s IPO specialist. With passion and knowledge, she wants to open up the world of IPOs and their long-term potential to everyday investors. She does this through her newsletter IPO Authority, a one-stop resource for everything IPO. She also contributes regularly to the Wealth Daily e-letter. To learn more about Monica, click here.
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