Although retailers have been pulling forward their holiday promotions, they’re still planning Black Friday deals for shoppers next week—but it might not mean much for apparel.
In a Coresight Research holiday consumer survey conducted on Nov. 10, over half said they plan to spend less this year, versus 2019. Consumers showed higher purchase intent for categories including electronics, toys and games, and home and kitchen products relative to other areas.
A relatively small percentage of respondents plan to reduce their spending on apparel, footwear and accessories versus when Coresight fielded its monthly spending survey last month. Only 28.6 percent said they bought apparel, footwear or accessories online in the past two weeks, slightly down from around one-third last week. Online apparel shopping also fell from the top spending activity to third place, in terms of ranking, Coresight said, adding that “we saw both online and in-store apparel shopping drop—despite moving further into the holiday shopping season, which should bolster purchases.” Because apparel is typically the No. 1 gift category for holiday, there still could be sequential improvement in metrics as the holiday season progresses, Coresight concluded.
About one-third of holiday shoppers said they expect to start, or have started, holiday shopping earlier than usual, while almost three in 10 said they plan to switch some or all of their holiday spending from stores to e-commerce. Thirty-two percent said they expect to shop from fewer stores to reduce visits to public places, and 26.6 percent said they are more likely to purchase from retailers that follow strict safety precautions in-store. Also, 22.5 percent said they plan to use curbside pickup for some online purchases, while 22.3 percent plan to use in-store pickup for some online orders.
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Goldman Sachs’ survey also saw respondents indicating that they plan to mind their pennies this year.
“We surveyed 1,000 US consumers on their plans for holiday shopping. Overall, we believe results point to soft holiday spending intentions this year vs. 2019, with a majority of consumers surveyed planning to spend less this year. We also observe that consumers plan to shift more of their spending online, and have plans to finish their holiday shopping earlier this year—both of which we believe are likely due to consumer behavioral shifts as a result of Covid-19,” said Goldman Sachs retail analyst Alexandra Walvis, whose team found that Amazon and Walmart remain the top holiday destinations based on a consumer survey.
In general, 53 percent of consumers surveyed said they plan to spend less this holiday season, with just 23 percent indicating they plan to spend the same amount. Gift cards and toys and games were the most popular categories, while experiential gifts and apparel ranked far lower on the list of gift preferences. The category that has shown the strongest gain is housewares, as the coronavirus has kept more people closer to home. The categories that could do well in apparel include jeans, loungewear and athletic apparel. “Within this, females indicated plans to spend more on loungewear and denim, while males indicated a strong propensity to spend more on denim and athletic footwear,” Walvis said.
“Overall, our survey indicates fewer consumer dollars are up for grabs, category preference is shifting materially away from experiential gifts, and consumers are looking to shop earlier and online. We believe traditional retailers will have to be agile as they navigate these shifts, most notably the accelerating shift to online which drives potential store deleverage and margin pressure given a backdrop of tight supply chains and elevated fulfillment network surcharges,” Walvis said.
She also noted that consumers said holiday prices seem to be higher this year, which could limit average unit retail (AUR) gains. Those in higher income groups perceived prices to be climbing more so than those among the lower income cohorts.
In addition, 50 percent said they plan to complete their holiday shopping by the first week of December, up from 42 percent last year. The Goldman team said that generally Black Friday is the key shopping week for high-income consumers, while mid-December is the most popular time for lower- and middle-income shoppers to complete their holiday shopping.
Goldman expects Amazon and Walmart to do well, but is cautious on the department store sector and apparel companies such as Ralph Lauren and PVH.
Respondents to the Goldman survey were split 50/50 male/female, and included al major demographic groups. By income bracket, 47 percent reported annual household income of less than $50,000, 28 percent between $50,000 to less than $100,000, and 25 percent at $100,000 or more.