An extended shopping season expected to boost sales
PURCHASE, N.Y. — Retailers and shoppers have gotten an early start on this year’s holiday shopping season, and that should help lift overall sales.
During this newly expanded holiday season, running from October 11 through December 24, Mastercard SpendingPulse is forecasting a 2.4% increase in U.S. retail sales (excluding automotive and gas) compared to the same time period last year. Notably, overall retail sales during that initial holiday kickoff week of October 11 grew 8.3% compared to the comparable week in 2019, with e-commerce sales increasing 66.5%.
“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 for Mastercard and former CEO and chairman of Saks Inc. “To put it in perspective, the 2008 recession saw holiday season declines of 3.5%, so this could be a happy holidays indeed.”
Mastercard’s SpendingPulse survey, which measures overall retail sales across all payment types including cash and check.
In terms of what consumers are buying this holiday season, home furnishings, athleisure and electronics are expected to outperform when compared to other sectors.
While this holiday season will look different from state to state and family to family, there are a number of overarching trends to watch—as well as other factors, such as future stimulus decisions, that could impact sales forecasts. As part of its ongoing insight series, Mastercard’s Recovery Insights: The Evolving Consumer looks at changing consumer habits, and what that means for retailers. Findings include:
- Online, anytime points to record e-commerce highs: Online sales growth has fueled retail through the pandemic. With social distancing measures in place and health concerns running high, e-commerce’s share of overall retail sales is expected to jump from approximately 14% in 2019 to over 20% in 2020.
- ‘Tis the season—earlier than ever: While Black Friday used to kick off the official countdown to the holidays, shopping will start much earlier this year. We saw cyber deals offered starting in October with major e-commerce promotions serving as important milestones. We can expect this to continue into November with Singles Day in China and extending through the season.
- Shopping local, shopping small. 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. This shrinking “retail radius” is also contributing to the shift to e-commerce.
- Travelers remain grounded: With international travel restricted, many families will be staying home—or traveling locally this holiday season. This will have a ripple effect, impacting larger cities as well as the luxury stores and hospitality companies that cater to overseas tourists.
- Reimagining brick and mortar stores—with a focus on the omnichannel experience: Caution and convenience remain top of mind for many consumers, and retailers are responding accordingly. Buy online, pickup in store, as well as technologies like contactless, will remain important as retailers establish innovative ways to allow this type of low-contact experience.