Retail watchers were optimistic about this holiday season, and it looks like their positive predictions were warranted.
With strong consumer confidence, low unemployment and strong personal income growth, retailers had high hopes that the holidays would help put this tumultuous year behind them and start 2018 off on a better note. And from the looks of it, that’s exactly what happened.
Though not all sectors were big winners, Mastercard SpendingPulse reported overall sales between Nov. 1 and Dec. 24 grew by 4.9%. Not only did the performance best the high end of AlixPartners’ 4.4% prediction and Deloitte’s 4.5% estimate, it was the largest year-on-year growth since 2011. Further, in terms of dollars spent, 2017 set a new record.
“Overall, this year was a big win for retail. The strong U.S. economy was a contributing factor, but we also have to recognize that retailers who tried new strategies to engage holiday shoppers were the beneficiaries of this sales increase,” said Sarah Quinlan, senior vice president of Market Insights, Mastercard.
Retailers can thank last-minute shoppers for pushing them over the top, according to the firm. SpendingPulse reported that Dec. 23 rivaled Black Friday for single-day spending. While the jewelry category was a big beneficiary, Macy’s told Reuters fragrance sales were also helped along by consumers shopping in the week leading up to Christmas.
Top categories overall were electronics and appliances, which increased by 7.5%, and furniture and home furnishings as well as home improvement, which were up 5.1%.
Department stores and apparel specialty stores posted moderate gains, which the SpendingPulse noted was a win given the issues this sector has faced in 2017.
Online spending also increased 18.1% over last year.
Mastercard credits stores with starting their holiday campaigns earlier—a strategy that yielded strong sales in early November.
Stores also focused on convenience this season with more services like buy online, pickup in store. Among the retailers pushing this online/in-store hybrid was Target, which told Reuters it saw a marked increase in consumers stopping into pick up their e-commerce purchases as Christmas loomed.