The 2019 holiday shopping season stands to pan out favorably for retailers—and online sales could be the fuel they need to ignite a blaze.
According to global insights firm IHS Markit, retailers will ring up $733.7 billion in sales this holiday, a 4.6 percent increase over last year.
The share of holiday sales captured by retailers online has increased by 1 percentage point on average every year of the past decade, with a slight uptick over the past five years. In 2018, online made up 18.6 percent of total holiday sales. This season, e-commerce is projected to see sales surge 18.4 percent over last year, boosting the share of online sales for the holiday season to roughly 21 percent.
When it comes to Black Friday, retailers can expect to see record traffic to their e-commerce sites, outpacing even their in-store sales, as shoppers seek the convenience of buying with a click and dodge crowded malls and parking lots.
“The historically high-trafficked day in stores has taken new shape to extend beyond physical storefronts,” said Dallas Lawrence, chief brand and communications officer of OpenX, an advertising technology company.
“For the first time, more money will be spent online than in store—this includes on Black Friday and extends throughout the season,” he said, adding, “We may as well call Black Friday, ‘Cyber Friday.’”
With the Thanksgiving holiday falling late in the month this year, compressing the holiday spending spree and shaving six days off the season, retailers should work urgently to reach consumers on their mobile devices, Lawrence said.
“To get in front of consumers best, marketers should look to where shoppers spend their time consuming content; this is where they’ll be most open to receiving gift inspiration for future purchases,” he added.
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Despite the uniform popularity of online shopping throughout the season, consumers look at Black Friday and Cyber Monday opportunities slightly differently.
The majority (60 percent) of Black Friday shoppers browse offerings in hopes of finding the best deals, whatever they may be, according to a survey conducted by Simon-Kucher & Partners, a global strategy and marketing firm.
Once Cyber Monday rolls around, though, consumers are much more hawkish, the group said. Half (50 percent) of consumers said they were more determined to check specific items off their lists, focusing on finding great prices for a predetermined set of products.
Whatever their shopping strategies, consumers find Black Friday and Cyber Monday to be the most important retail holidays of the year—even in the age of Amazon Prime Day.
The vast majority (75 percent) of shoppers said they believed they would find the best deals of the year on the post-Thanksgiving sales days, while only 8 percent of consumers see Prime Day as the top deal-finding occasion.
While the season’s biggest sales are undoubtedly a massive opportunity for retailers, the temptation to tease deals ahead of time may not yield the results brands are seeking.
In a race to entice consumers during this key shopping window, many stores attempt to build anticipation by advertising their deals a month or more ahead of time, Simon-Kucher & Partners analysts said. However, the group’s data revealed that more than a third (40 percent) of consumers don’t start thinking about the sales until one to two weeks before they happen, and a quarter (25 percent) wait until the week of the sales to begin planning their shopping strategies.
More than half of all Americans (roughly 52 percent) said they planned to spend the same amount on holiday shopping as they did last year, according to boutique PR firm Bospar. While about 23 percent of shoppers said that they planned to spend more than they did in 2018, almost a quarter (24.8 percent) said that they would spend less.
According to Bospar’s data, 50 percent of consumers are worried about an impending economic downturn, and those anxieties stand to affect their spending.
The ongoing trade war with China also stands to impact retail and consumer attitudes, but IHS Markit’s associate director, James Bohnaker, said shoppers are not likely to feel the effects of tariffs until after the holiday rush subsides.
“Most retailers began placing orders for their holiday goods in the summer months, which will allow them to mostly avoid paying the higher tariff rates that went into effect in September,” Bohnaker said. “Even if some purchasers are subject to higher prices on last-minute orders, they may opt to hold down retail prices due to the competitive pricing environment,” he added.
While the tariffs are unlikely to affect prices over the holiday shopping season, the added stress of economic concerns could impact consumers’ confidence as they venture out in search of deals and doorbusters.
“If actual consumer conditions do conform to this more pessimistic outlook—perhaps due to a slowing job market, financial volatility, impeachment developments, or trade war escalation—holiday sales could be in for another disappointing year,” Bohnaker cautioned.