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In spite of challenges associated with the coronavirus pandemic and fading of the initial relief package, the holiday season was quite encouraging. Though there were fears about how comfortable consumers will be in terms of purchasing at a time fraught with high unemployment and lower disposable income, Americans showed resilience. Even retailers geared up for an unusual and an expanded festive season by undertaking steps to provide a seamless shopping experience, predominately online.
Online Shopping Powered Holiday Sales
A report by Mastercard SpendingPulse indicates that holiday retail sales, excluding automotive and gasoline - from Oct 11 through Dec 24 - increased 3%. Meanwhile, online sales surged 49%, and made up approximately 19.7% of overall retail sales, up from about 13.4% in 2019. While online spending on apparel jumped 15.7%, online jewelry sales shot up 44.6%. Again, furniture and furnishings experienced online sale growth of 31%. Markedly, online home improvement sales zoomed about 79.7%.
Steve Sadove, senior advisor for Mastercard stated "American consumers turned the holiday season on its head, redefining 'home for the holidays' in a uniquely 2020 way. They shopped from home for the home, leading to record e-commerce growth." Sadove added, "Consumers shopped earlier than ever before."
To beat the COVID-19 blues, retailers kicked off holiday shopping deals earlier this year with an extended promotional period to avoid rush at stores, given the health concerns. Markedly, Amazon’s AMZN two-day special Prime Day mega shopping event, Target’s TGT "Deal Days" and Walmart’s WMT five-day “Big Save Event” were held in October. Best Buy BBY and Bed Bath & Beyond BBBY also offered lucrative deals.
Few Aspects to Bear in Mind
No wonder, the holiday season, which accounts for a sizeable chunk of yearly revenues, is a make or break for retailers. Taking into account consumers’ product preferences and growing inclination toward online shopping, due to social distancing and greater stay at-home as well as work-from-home trends, retailers replenished shelves with in-demand merchandise and ramped up investments in digitization.
Retailers have been directing resources toward advancing omni-channel capabilities, enhancing supply chain and providing faster delivery options, be it curbside pickup or delivery at home. Notably, companies deployed reasonable number of seasonal associates to deal with curbside and in-store pickup of online purchases.
Amid a tough operating environment, rise in holiday retail sales is good news for retailers. Industry experts pointed that consumers have been cutting expenditures on pandemic-sensitive services such as travel and entertainment, and redirecting the same to retail space. They even might have been tapping their savings that helped boost consumption activity.
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