Holiday Sales Grew 8.5% as Shoppers Steer Away from Higher Prices
Digital Christmas shoppers are set to kick start a wave of product returns and exchanges as well as the triggering of gift card spending.
Retailers should be smiling right about now: holiday spending grew 8.5% compared to the same time last year.
The retail growth came in just under the predictions of Mastercard, which had expected growth of 8.8%.
Having said that, it was the biggest annual increase in 17 years.
“Consumer demand remains very strong, but we’re cautiously optimistic because the traffic has decelerated a little bit in December,” said Oliver Chen, a retail analyst for Cowen.
With the emergence of the omicron Covid variant adding to the disquiet of rising inflation, consumers have been weighed down by wider issues of supply chain challenges.
However, it is quite impressive still that despite this, it has demonstrated consumer willingness to spend and the ability of retailers to record big numbers.
“We could continue to see really strong sales of things as opposed to experiences right through the first half,” said Jan Kniffen, a retail consultant. “Omicron has slowed down experiences, but it hasn’t slowed down things at all.”
Total retail sales beat pre-pandemic levels, growing 10.7% this holiday compared to the same time two years ago.
In terms of in-store sales, they grew 2.4% while ecommerce sales surged 61.4% compared to 2019.
Ever since the pandemic, ecommerce has become a staple of the holiday season.
Between 2020 and 2021, ecommerce sales rose 11% and made up almost 21% of total retail spending.
But ecommerce growth wasn’t all even. Some categories performed particularly well.
Jewelry and apparel both rose particularly high, by 47.3% and 32%. And electronics jumped 16.2%.
Some retailers are now in a better position than competitors because they are able to cut across merch categories and deliver different ecommerce options, such as home delivery, curbside, etc., in order to provide convenience for shoppers.
Elsewhere, luxury retailers – from jewelers to home décor – have been benefiting from some consumer behavior that is less concerned with splurging on higher-priced goods, whether it be earrings and handbags or sofas and diamonds.
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