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NPD: Holiday Needs Big Last-Minute Push to Break 2% Sales Growth

Despite the influx of e-commerce orders this holiday, retail needs a bigger push across channels if it has any chance of outpacing last year’s haul.

Retail sales increased 3 percent in the week of Dec. 6-12 compared to the same week last year, a bounce back from a Cyber Week that saw sales dip 3 percent, according to data from The NPD Group. Combining the 1o total weeks tracked by NPD, holiday 2020 sales have grown 2 percent year over year.

The market research firm noted that Cyber Week was “soft” due to the extended holiday season, which began in mid-October as Prime Day and other retail promotions pulled sales earlier into the calendar. For context, when NPD released holiday sales after the first six weeks of the season, which was calculated starting the week of Oct. 4-10, season-to-date sales growth showed a 13 percent uptick.

NPD’s sentiment on the earlier sales is similar to that of the National Retail Federation (NRF), which reported that while retail sales in November grew 8.8 percent year over year, sales actually declined 0.3 percent month-over-month despite the inclusion of Black Friday and Cyber Monday.

While NPD said sales increased in the week ended Dec. 12, the firm’s early indicator data shows unit sales for the period declined 5 percent year over year. The continued divergence of total dollar and unit sales is the result of higher-priced items being sold and decreased promotional activity, which is a positive sign for retailers as they aim to mitigate markdowns.

As has been the norm for 2020, in-store purchase activity through the season still lags, with year-over declines reaching 7 percent, according to NPD’s Checkout data. Online purchases have continued to see strong growth at a 33 percent jump, which managed to push overall omnichannel buying activity up 3 percent compared to the same week last year.

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Overall, the week was pivotal for growth, as it was the first time NPD said it tracked two consecutive weeks of total purchase activity that outpaced 2019’s performance.

“The final holiday push has arrived, but in 2020 the days seem to blur together, and it’s clear consumers still have shopping to do,” said Marshal Cohen, NPD Group’s chief industry advisor, retail. “Now officially past comfortable shipping deadlines, last minute shoppers will be forced to look to physical retail stores for those remaining holiday gifts. While the arrival of the vaccine is likely to make consumers feel a little merrier, rising Covid-19 case counts will make BOPIS and curbside pick-up options more important than they have been all season.”

Last-minute shoppers have their moment, but spend the least

Now that the third week of December is a wrap, this is the time for last-minute shoppers to shine.

According to NPD’s annual Holiday Purchase Intentions Study, 17 percent of consumers didn’t plan to start shopping until after Cyber Week, and 4 percent said they planned to wait till the last minute to start their holiday shopping.

As many as 18 percent of total shoppers said they are usually shopping until the last minute. These shoppers, as defined by NPD Group, typically have the greatest concern for their own finances and the economy.

This is evident in their planned spending, with those who began shopping in December spending the least through the season by a healthy margin. While shoppers who start in December spend $448 on average, those who begin during Thanksgiving through Cyber Monday spend $680. The earliest shoppers, who purchase their gifts before Thanksgiving, also happen to spend the most at $876 a person.

NPD characterizes these shoppers as wanting to give physical gifts, since they are less likely than earlier season shoppers to buy gift cards and intangibles, and virtually none planned to buy subscriptions as gifts.

Prior to the season, NPD estimated that shoppers planned to spend an average of $691 during the holiday season—less than the $740 they planned to spend last year, according to a holiday survey of more than 3,400 consumers. In the study, 30 percent of shoppers said they planned to spend less than they did last holiday season.

Sport lifestyle footwear is Cyber Week’s second-hottest category

Regardless of when shoppers are spending during the holiday season, it doesn’t appear apparel is a top item on most people’s radar. But footwear happened to get a much needed boost as the heart of the holiday season kicked in.

The hottest categories during Cyber Week, according to the research firm, were LCD TVs, with sport lifestyle footwear coming in second place. This is a nice win for the footwear sector, since its sales are expected to still decline in the mid-single digits during the fourth quarter. Overall, NPD expects the footwear category to stabilize and recover through 2021, with improved fashion footwear and performance sales are forecasted to lead increased dollar sales.

Rounding out the top five categories purchased during Cyber Week include monitors, sports toys and video game consoles.