by Karen Brune Mathis
Managing Editor
Started your holiday shopping yet?
Retailers are ready and waiting for you. After all, some retailers typically log 20 percent and some up to 30 percent of their annual sales from holiday shopping.
Last year, sales for Thanksgiving, Christmas, Hanukkah and Kwanzaa accounted for 19.1 percent of all retail sales, said the National Retail Federation.
It was quite a bit higher for jewelry stores, which rang up 29.5 percent of their sales during the holidays.
The holiday shopping season starts earlier each year, at least by the looks of the stores and their advertising, although the federation tracks November and December.
Last year, 40 percent of consumers began holiday shopping before Halloween, according to the retail federation.
This season will be the second since the recession that started in December 2007 was declared over as of June 2009.
However, unemployment remains near 12.5 percent in Duval County and underemployment, in which workers can’t find jobs at their skill levels or within their previous pay range, remains a factor.
“Consumers are concerned about the jobless recovery and managing their personal finances,” wrote James Russo, vice president of global consumer insights for The Nielsen Co. in a late September report.
“As a result, they are closely planning their spending and continue to reduce their shopping trips while placing more emphasis on value,” he wrote.
There are differing predictions by experts about sales increases this season.
The International Council of Shopping Centers, with U.S. headquarters in New York, expects holiday sales to be 3 to 3.5 percent higher this year from last year as the economy slowly improves.
The National Retail Federation in Washington, D.C., expects sales to rise 2.3 percent.
“Though the retail industry is on stronger footing than last year, companies are closely watching key economic indicators like employment and consumer confidence before getting too optimistic that the recession is behind them,” said Matthew Shay, president of the Retail Federation, in a forecast report released in early October.
“Much like they have in previous years, retailers are expected to focus on supply chain efficiencies and inventory control this holiday season to limit their exposure to excess merchandise and unplanned markdowns,” he said.
Russo at Nielsen, a New York-based global marketing and consumer information company, expects “subdued and value-focused” shopping and sales close to what was spent last year. Nielsen predicts this year’s holiday shopping to closely reflect 2009 spending.
Russo wrote that consumers have redefined value in “this new normal.”
“Value is not about price. It’s about the balance between price and benefits,” he said.
Nielsen offered seven observations:
• Making a list and buying. More consumers plan to buy this season, with 36 percent telling Nielsen they will spend less, compared to 42 percent last year. But with fewer shopping trips, down 4 percent in the second quarter compared with mid-2007, retailers need to realize that “every retail interaction” with consumers is critical.
• Holiday winners and losers. Value retailers will attract shoppers but online retailers will see the biggest surge. Unlike 2009, consumers indicate moderate interest in spending more across a broad spectrum of retailing, such as consumer electronics, pet, liquor, department, convenience/gas and home improvement stores. Consumers plan to spend less at mass merchandise stores and are expected to keep their spending flat in supercenters, club, grocery, toy, book and office-supply stores.
• Who shops where? Consumers earning $70,000 a year and those earning $100,000 or more will drive online retail visits. Consumers earning $50,000 or less will drive dollar-store visits, which is an increasingly higher-income shopper than in previous years. All income segments will be attracted to mass merchandisers, supercenters and club stores.
• Earn less, plan to spend more. Those who make the least plan to increase their holiday spending more than other income groups. Nielsen said 6 percent of households making less than $20,000 plan to spend more this holiday season, compared with 4 percent of higher-income households, those making at least $100,000.
• What’s hot. Nielsen predicts a strong season for technology products and gift cards, with some “possible upside surprises” in items such as clothing, toys, video games, books and vacations, especially among households making at least $100,000.
• What’s warm. Discretionary purchases such as jewelry and DVDs are expected to see a slight increase in sales. What’s not? Nielsen said consumer spending on sporting goods, CDs, cookware and bed and bath items will be flat.
• Consumers buying and watching. Consumers spend a considerable amount of time watching TV during the weeks around the holidays, with the week between Christmas and New Year’s ranked as the top week for overall television viewing, including using a DVD player and playing video games. The week of Thanksgiving and the two weeks after rank among the top 10 weeks for men’s TV viewing, which Nielsen says is a consideration for retailers when planning their advertising.
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Retail landscape: Predictions for 2015
The Nielsen Co. reports that American consumers have made significant shifts in their shopping habits. “From planning their shopping trips to focusing on value to trading down to going out less and staying in more, consumers have pressed the reset button and fundamentally changed their habits,” reports Nielsen.
• Mass supercenters and e-commerce will be the big winners.
• Low-end and high-end grocery stores will grow their shares of the market.
• Pet stores and dollar stores will grow.
• Retail consolidation: The big will get bigger.
• Smart phones will be the primary enabler of shopping engagements.
• Store formats will evolve: New formats, smaller stores, pop-up retailing to accelerate.
• Anywhere in-store checkouts to replace self-checkout and open floor space.
• In-store kiosks, digital media and holograms to interact with shoppers.
• Demise of traditional consumer age and gender targets as technology enables a seamless view across languages and ethnic/generational groups with links to purchase and usage behavior.
• Evolving U.S. demographics have major impacts.
When shoppers start shopping
The National Retail Federation analyzed when consumers began buying for the holidays in 2009.
| When started | % |
| Before September | 13.4% |
| September | 6.1% |
| October | 20.2% |
| November | 38% |
| First 2 weeks of December | 17.4% |
| Last 2 weeks of December | 4.8% |
| Year | Holiday sales* | Annual retail sales* | Holiday sales as % of annual sales |
| 2000 | $352.2 billion | $1.76 trillion | 20% |
| 2001 | $364.1 billion | $1.82 trillion | 20.02% |
| 2002 | $368.8 billion | $1.87 trillion | 19.68% |
| 2003 | $386.3 billion | $1.94 trillion | 19.88% |
| 2004 | $409.1 billion | $2.06 trillion | 19.87% |
| 2005 | $431.5 billion | $2.17 trillion | 19.86% |
| 2006 | $444.7 billion | $2.27 trillion | 19.56% |
| 2007 | $452.8 billion | $2.33 trillion | 19.4% |
| 2008 | $435.2 billion | $2.35 trillion | 18.51% |
| 2009 | $437 billion | $2.29 trillion | 19.09% |
| Year | Change over previous year |
| 1996 | + 3.6% |
| 1997 | + 4.8% |
| 1998 | + 5.8% |
| 1999 | + 8.1% |
| 2000 | + 2.3% |
| 2001 | + 3.4% |
| 2002 | + 1.3% |
| 2003 | + 4.7% |
| 2004 | + 5.9% |
| 2005 | + 5.5% |
| 2006 | + 3.1% |
| 2007 | + 1.8% |
| 2008 | - 3.9% |
| 2009 | + 0.4% |
| 2010* | + 2.3% |