Whether it was the weather or consumers weren’t excited enough about what they found in stores to dish up their discretionary dollars, “It was kind of a wild and crazy season across the board,” Evan Gold, EVP of global services for business weather intelligence firm Planalytics, said in a webinar recapping holiday retail.
It was a highly promotional holiday shopping season, consumers were buying earlier, and even though the macro economic backdrop was favorable, consumers still weren’t spending more at stores.
When it came to shopping earlier, Marie Driscoll, senior industry consultant for the Fung Business Intelligence Centre (FBIC) said one in four shoppers bought Christmas gifts before Halloween and nearly half did the majority of their shopping pre Cyber Monday.
And despite consumers being healthier, gas prices down as much as 8 percent over last year and personal disposable income up 3.5%, holiday shopping results were still mixed.
A MasterCard survey said retail sales for the Black Friday to Christmas Eve period grew 7.9%, helped largely by e-commerce.
But many of the major retailers didn’t see that level of sales success. Macy’s announced on Wednesday that its same-store sales during November and December fell 4.7%, and Gap’s sales for the five-week period ended Jan. 2 were down 4 percent.
J.C. Penney, on the other hand, had a jollier holiday with comp store sales up 3.9% for the November-December period. The company’s CEO Marvin Ellison said, “Despite unprecedented warm weather that significantly affected apparel sales across the company, our focus on private brands, enhanced omnichannel execution and compelling gift giving selection resulted in strong holiday sales.”
L Brands, parent company of Victoria’s Secret, saw record success for the season, with sales up 9 percent for the five weeks ended Jan. 2.
Company chairman and CEO Leslie H. Wexner said, “We delivered our best December ever. Victoria’s Secret, PINK and Bath & Body Works are great brands with high emotional content, and our teams worked hard to deliver exceptional merchandise and experiences to our customers.”
Consumers want products that are exciting, which is part of the reason Driscoll said L Brands’ intimates lines did so well.
“Sex and toys sell,” Driscoll said. “It’s what’s fun.”
Whether sales slumped or soared in stores, it was online for the win at most retailers.
MasterCard said e-commerce grew roughly 20 percent over 2014, which came as little surprise since 70 percent of U.S. consumers said they were doing more research online now than before.
In its own research, FBIC found six in 10 consumers saying they would shop mainly online for the holiday, and apparel and accessories performed particularly well on the platform.
Holiday 2015 was the season where weather woes just wouldn’t quit, and some retailers (like Macy’s, which blamed 80 percent of its sales declines on the unexpected weather) cited weather as a major player in the pains felt in sales over the season.
As Gold explained citing Planalytics data, last year the U.S. saw the warmest November since 1999 and December was the warmest in more than 55 years in the U.S. and Canada. Some markets were 5-7 degrees above the record highs in December.
“We’ve had the least snowfall in four years in the U.S. and most weeks in the month were warm in the east and cold in the west,” Gold said.
Apparel specialty stores took a hit—to the tune of a $572 million loss in sales in November and December—as a result. “They’re the folks that are getting hit the most,” Gold said.
Sales of outwear were down 1 percent in Winnipeg, Canada, long sleeve shirts sales were down 4 percent in Boston and boot sales were down 5 percent in Jacksonville, Florida.
But winter, it seems, has finally set in and January is going to be an important month for retailers to make up for lost sales.
Average temperatures are down at least 10 degrees in most major markets this week, and it’s as much as 20 degrees colder in New York City, Baltimore and Philadelphia than it was two weeks ago. Planalytics has seen snow and ice threats for the east in the forecast.
Since most holiday returns take place in stores, Gold said, traffic in January is particularly important and a good opportunity to capitalize on gift card redemption and winter clearance.
“It should be an ideal time to clear winter merchandise in the next few weeks considering the weather,” Gold said. “Consumers are going to be out there looking to snap up winter items.”