The holiday season is heading into its final weekend before Christmas and current spending patterns could provide a boost to digital sales for Super Saturday, but it likely will help home retailers more than their apparel brethren.
This holiday has been nothing like the past, not with the need for continued social distancing and promotions shifting earlier into the season in a bid to keep retail supply chains from reaching their breaking point.
This year, Super Saturday falls on Dec. 19, giving retailers a full five days before Christmas to allow for online purchases and brick-and-mortar shopping with store-based fulfillment. Research firm Customer Growth Partners forecasts $36.1 billion in sales, up 5.5 percent year-over-year, while Super Saturday is expected to outpace Black Friday’s total of $29.7 billion and Cyber Monday’s $15.1 billion.
“Despite a sluggish Black Friday, a shadow of its former self, the November spending strength in-store and online—and despite the usual ‘early December lull’ the first ten days of December—defied the Covid headwinds, and set the stage for a record Super Saturday,” said Craig Johnson, president of CGP.
Johnson noted that digital is “driving about 70 percent of the total growth,” but that physical stores—particularly big-box retailers such as Dick’s Sporting Goods, Target and Home Depot—are seeing modest footfall growth converting into robust net traffic growth. Rising average purchases are also up as consumers consolidate trips to minimize their exposure outside the home. “Home and hardlines categories—notably electronics, home improvement, sporting goods, etc.—are sizzling, as consumer spending migrates from apparel towards the home and work-from-home lifestyles,” he said.
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For what is considered the peak week starting this weekend, CGP sees home and sports gear as among the hardline winners this holiday season, with apparel, accessories—excluding footwear, an exception within the fashion group—and department stores as laggards. Promotions at apparel stores have been widespread, pressuring gross margins, while the hardline categories are mostly selling at full price, CGP data indicated.
And although malls have been hit hard by the pandemic, there could be hope ahead for off-price. Shopping traffic data firm Placer.ai told BMO Capital Markets analyst Simeon Siegel in a recent conference call that data from last year shows that off pricers saw their peak traffic on the Saturday before Christmas, and that the upcoming days could still play a key role for retailers this holiday season.
The U.S. Census Bureau said Thursday that overall retail sales in November slipped 1.1 percent seasonally adjusted from October, but up 4.1 percent year-over-year. Apparel and accessory stores were down 6.8 percent month-over-month seasonally adjusted and down 19.2 percent unadjusted year-over-year.
“Consumers held back on spending in November as virus rates spiked, states imposed retail restrictions and congressional stimulus discussions were gridlocked,” Matthew Shay, president and CEO of retail trade group National Retail Federation, said. NRF’s forecast for holiday sales is between a 3.6 percent to 5.2 percent gain from 2019 to $755.3 billion and $766.7 billion. While NRF defines the holiday season as Nov. 1 through Dec. 31, its research shows that 42 percent of consumers this year started holiday shopping sooner than usual.
For apparel retailers, there still could be some outliers who will win the last-minute online sales war. Jeffries analysts Janine Stichter and Randal J. Konik on Thursday noted that American Eagle Outfitters, Urban Outfitters and Zumiez have moved their shipping cutoff deadlines later, suggesting that they had “appropriately calibrated expectations.”
In a research note, they said these retailers also have “strong omni-channel capabilities, suggesting their ability to capture an outsize share of last-minute online orders.” Most retailers were guaranteeing Christmas delivery, typically free shipping with a minimum spend, for orders through Dec. 13-16. They also noted creative delivery solutions as boosting sales. Zumiez was cited as offering doorstep delivery to customers’ home through its own employees, while American Eagle has invested in four localized fulfillment hubs. Boot Barn is offering same-day shipments from local stores and Foot Locker added BOPIS (buy online and pickup in-store) within 700 locations. Other retailers are partnering with non-traditional carriers such as Roadie and Instacart for delivery.
B. Riley’s Susan Anderson said that the week ended Dec. 13 has seen lower promotions and clearance sales online. The analyst pegged online clearance as down 15 percent for the week. Store checks at malls started to increase “as we near Christmas,” she said, but merchandise isn’t piled high as in years before either.
“We also have observed many retailers low on store inventory, which we believe is due to retailers entering the holiday period with leaner inventory in response to the pandemic,” she said.