There’s some second-guessing going on regarding holiday 2021.
Forecasts have optimistically ranged from 7 to 11 percent retail sales gains, but the mood over the last few days has dimmed due to a swirl of concerns, including last week’s smash-and-grab store robberies on the West Coast; rising COVID-19 cases and the new Omicron coronavirus variant, and another round of travel restrictions reducing tourism. Inflation and reports of scattered stockouts could also limit purchasing.
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“I think people shouldn’t be accepting the forecasts as being in touch with how people are actually shopping. Things are changing,” said veteran retail analyst Walter Loeb.
As far as his outlook for holiday sales gains, “I’m at 6 to 7 percent, no more,” Loeb said. Resurging cases of COVID-19 and the discovery of the Omicron variant spreading could push people to buy more through the internet, Loeb said. Generally, he thinks shoppers will be able to buy what they want or something similar. “There is plenty of merchandise. There may not be a blue tie available, but you can get a green or a red one.”
It’s a toss-up whether Cyber Monday this year will be bigger than last year. Consumers are expected to spend between $10.2 billion and $11.3 billion, according to Adobe Digital Economy Index, similar to the $10.8 billion spent by Americans on Cyber Monday 2020.
Cyber Monday will still be the biggest online shopping day of the year, but not the record-breaking blockbuster of previous years. Consumers have been spending earlier in the season in response to promotions and deals from retailers that started in October, and people have been getting back to shopping brick-and-mortar stores.
On Monday, there was a new round of reports on how Thanksgiving weekend fared.
Mastercard SpendingPulse indicated that U.S. retail sales during Thanksgiving weekend (Friday, Saturday and Sunday) rose 14.1 percent year-over-year and 5.8 percent over 2019, excluding auto sales. According to Mastercard, in-store sales rebounded, increasing 16.5 percent from the weekend of 2020. For the same period, e-commerce sales rose 4.9 percent from last year.
Driving retail sales the most last weekend, Mastercard reported, were apparel, up 51.2 percent; department stores, up 19 percent, and jewelry, which rose 78.4 percent. Mastercard SpendingPulse measures overall retail sales across all payment types, including cash and checks.
“The consumer continues to be really healthy, and that’s at the high end and the low end,” said Steve Sadove, senior adviser for Mastercard and former chairman and chief executive officer of Saks Inc. “Retailers have been preparing for this moment and will find innovative ways to deliver on what’s bound to be the biggest holiday shopping season yet. Apparel and department storers, both recovering categories, are growing. Some piece of it is inflation, but bottom line, it says we are in a very good holiday season.”
“What does it mean for the rest of holiday season? All of a sudden you have this variant,” Sadove continued. “Should that raise concerns? In the past, where there have been hot spots, people shifted their shopping behavior where they feel safe. They did more online. They did more buy online, pick up in store or curbside. Overall retail [didn’t] change that much. If there was any change in behavior during the last year and a half, it might have been a shift between online versus stores.”
If the new variant spreads, Sadove said, “I don’t think it will affect the holiday season, and if did, it would be minimal. Of course I am concerned about the variant, but as it relates to this holiday season, I don’t think it will affect the last month of the season.
“Smash-and-grab incidents affect certain retailers and their margins, but it won’t stop people from going out and shopping,” said Sadove. “It’s terrible, and in some cases forces closures and limited hours, but it’s spotty. Clearly, it’s something very concerning on a localized basis that we have to deal with. We have to make people feel safe when they are shopping.”
At Tanger Factory Outlet Centers, “Friday was a great day, Saturday started slow but picked up and was great. Sunday was pretty strong,” said Stephen Yalof, CEO. “We were double digits over 2020, in terms of traffic, and nearly back to 2019 traffic levels.”
“Anecdotally, accessories, athletic footwear, Nike, Ugg and Under Armour were strong,” he said. “There were lines out the doors but part of that was crowd control. The weather also cooperated.”
He said the turnout for Black Friday weekend “bodes well for the rest of the holiday season. The customer wants to get out. The trends we saw over Thanksgiving weekend will sustain.”
Asked if he’s concerned that rising COVID-19 cases and the new Omicron variant could deter shoppers from visiting Tanger outlets, Yalof replied: “We haven’t seen it yet — operating open-air centers continues to benefit us. But it would be silly to think people are not talking about a lot of these things.”
President Biden alleviated some concerns when at a press conference Monday he said: “If people are vaccinated and wear their masks, there’s no need for lockdowns.” The president also said there would be no new travel restrictions aside from blocking flights from African countries following the discovery of the Omicron variant.
Retailers are also watching to see how deep of a “lull” in business occurs beginning this week. Each year right after Cyber Monday, shopping slows until approximately 10 days before Christmas. “I don’t know that we are anticipating a lull any different materially from any other holiday shopping season,” said Yalof.
At the mixed-use Brickell City Centre in downtown Miami, “We keep an eye out for the ever-evolving COVID-19 situation,” said Michael Sneed, director of retail marketing. “Fortunately, our development is an indoor and outdoor hybrid,” providing an open-air shopping setting with some overhead coverage.
He said recent smash-and-grab robberies are not an immediate concern and haven’t happened at Brickell, and that COVID-19 hasn’t appeared to change the consumer psyche, at least not yet. “I think people want to get out and enjoy their friends and families. People will go out where they can be social and can be safe.”
Key retail tenants at Brickell include Saks Fifth Avenue, Intimissimi, Zara, Bath & Body Works and Victoria’s Secret, among others.
According to Salesforce, U.S. shoppers are projected to spend $11 billion online during Cyber Monday. Globally, consumers are expected to spend $43 billion.
Salesforce analyzed global shopping data from more than one billion consumers on Commerce Cloud and Marketing Cloud, including 24 of the top 30 U.S. online retailers. Among its key findings:
• Cyber Week deals have disappointed holiday shoppers: The average selling price was up 13 percent in the U.S. and 6 percent globally compared to last year. The average discount over Cyber Week was 26 percent in the U.S. (down 9 percent year-over-year) and 23 percent globally (down 8 percent).
• Shoppers embraced buy now, pay later offerings. Globally, BNPL usage over Cyber Week grew 37 percent, with more than $16 billion in holiday orders financed.
• With supply chain issues, holiday inventory continues to be low: product catalogues over Cyber Week shrank 6 percent in the U.S. and 6 percent globally compared to last year.
• Popular holiday categories so far this Cyber Week include: luxury handbags, up 47 percent; furniture, up 40 percent; footwear, up 27 percent.
Placer.ai, which tracks store traffic, reported some Black Friday winners, indicating visits at Ulta rose 42.2 percent over last year and 10.3 percent over 2019; Sephora was up 97.5 percent compared to last year, and 20.5 percent ahead of 2019; T.J. Maxx was up 33.6 percent from last year and 2.9 percent from 2019; Rose rose 36.6 percent and 3.6 percent, and Walmart was up 29.1 percent and 2.8 percent.
On the down side in terms of visits, according to Placer.ai, were Dick’s, Nordstrom Rack, Dillard’s and Kohl’s.
Masato Onoda for WWD