The holiday retail season hasn’t been the best for retailers this year—consumers are particularly price sensitive, websites are crashing under the weight of e-orders and the weather just won’t cooperate. And traffic hasn’t been all that great either.
In a recent webinar, Deborah Weinswig, executive director and head of global retail and technology at the Fung Business Intelligence Centre (FBIC) and Evan Gold, EVP of global services at weather analytics firm Planalytics, discussed the state of holiday retail and the outlook for the remaining days of 2015.
Retailers were generally pleased with Black Friday sales, which definitely favored e-commerce, Weinswig said, even despite the dip in traffic. Sales from then to Cyber Monday totaled $11.1 billion, a 17 percent year over year jump, according to the Adobe Digital Index.
“Brick-and-mortar foot traffic was down 5.1% Thanksgiving weekend,” Weinswig said. “I think that number will start to be even more exaggerated as we get through the holiday season.”
PVH saw comps up 11 percent for the Thanksgiving weekend but expects the season to be highly promotional, particularly on cold weather products, according to Weinswig. Pacific Sun also had an 11 percent uptick in comps on Black Friday and said the holiday season has gotten off to a good start even though mall traffic was down. Express believes it is well positioned for the holiday season and is little worried about the slow traffic trend.
Traffic has been less of a problem online, namely on mobile devices.
Over the five-day period to Cyber Monday, mobile sales increased 24.1% compared to a 20.9% rise in overall online sales, according to FBIC research.
Amazon’s mobile sales increased 21.1% outperforming its overall online sales growth of 18 percent. Walmart’s mobile traffic accounted for 70 percent of its walmart.com visits.
Target on the other hand, suffered when its site crashed because of the influx of traffic. According to Weinswig, as many as 40 different retailers’ websites crashed, or suffered some form of performance failure, during the holiday weekend, including Neiman Marcus, Victoria’s Secret and Footlocker.
Beyond just the holiday weekend, overall December sales have dropped off more than in years passed.
According to data compiled by Goldman Sachs and Retail Economist for the Weekly Retail Chain Store Sales Index, sales fell 6.3% in the week ended Dec. 5 compared to the prior week. Year-over-year sales for the period, however, were up 1.7%. Weak sales after the holiday frenzy are generally expected, but the Retail Economist said the drop was more accentuated this year.
The consumer is healthy overall, though, so sales are expected to strengthen as Christmas Day draws nearer.
Having one extra day between Thanksgiving and Christmas (29 this year versus 28 last year) could also prove an added little boost for retailers.
“Even if we haven’t had the most ideal conditions going into the season, Christmas is on a Friday and that gives everyone Saturday to go and spend their gift cards,” Weinswig added.
When it comes to weather, much of the last month has seen an east-west switch, with the east experiencing warmer than normal temps and the west feeling cooler than it’s used to.
Cold weather gear purveyors have been channeling lower temperatures as coats and such aren’t selling as expected. Some U.S. markets that are used to seeing more than a bit of snow by now still haven’t had any.
But sales for scarves could soon pick up.
According to Gold, “As we move to final shopping days leading up to Christmas, we expect colder temperatures.”