Economic growth, a lack of inflation, rising wages and low unemployment have buoyed consumers and augured a willingness to spend significantly through December. And while many shoppers are favoring online purchases, the general enthusiasm was also expected to lift brick-and-mortar holiday retail sales.
Forty percent of consumers intended to spend more this year than during the 2015 holiday shopping, basing their plans on better job prospects and an improving economy, the A.T. Kearney 2016 Holiday Shopping Survey found. More than half (53%) cited their income situation and employment status as the most important reasons for planning to spend more this year. Almost a fifth (19%) cited the economy as the most important reason.
The hopefulness was especially apparent on Cyber Monday, when online sales were on track to hit a one-day record $3.39 billion — up 10.2% from last year. “This indicates that consumers still had more appetite for online shopping despite the incredible volume of online sales on Black Friday,” said Tamara Gaffney, principal analyst at Adobe Digital Insights.
Prices were expected to start climbing as retailers shifted attention to extending the season late into December with quick shipping deals and the option to click and collect in store, Gaffney added.
More than 154 million people shopped over Thanksgiving weekend, up from 151 million in 2015, according to the annual Thanksgiving weekend results survey released by the National Retail Federation (NRF) and Prosper Insights & Analytics. Average spending per person totaled $289.19, down slightly from $299.60 last year, with an average of $214.13 — or 74% of total purchases — going toward gifts.
“It was a strong weekend for retailers, but an even better weekend for consumers, who took advantage of some really incredible deals,” said NRF president and chief executive officer Matthew Shay. “In fact, over one-third of shoppers said 100% of their purchases were on sale.”
The share of people who shopped online (44%) was roughly equal to the number who went into stores (40%). Of those who favored stores, 75% shopped on Black Friday.
The survey also found that only 9% of consumers had finished their holiday shopping, down from 11% last year. Nearly a quarter (23%) had yet to make any dents in their lists, up from 19% in 2015.
“With midseason shopping behind us, it’s not too late for retailers to tweak their online and in-store strategies to help increase traffic and see a big payoff during the last few weeks of the holiday season,” Shay said.
Millennials (ages 18 to 34) continued to drive the increase in shopping during Thanksgiving weekend. Eight in 10 shopped over the weekend, with 25- to 34-year-olds shopping the most in store (56%) and online (62%).
“Millennials are keeping retailers on their toes when it comes to Thanksgiving weekend, shopping not just for their friends and family, but also themselves,” said Pam Goodfellow, Prosper Insight & Analytics’ principal analyst. “However, Millennials are not the only ones taking advantage of great promotions; today’s consumers, across ages, are savvy about when and where they shop.”
Among the retailers enticing continued spending with a Black Friday promotion was CVS Pharmacy. The chain for the first time offered ExtraCare members $20 in “Christmas Bucks” when they spent $50 on selected seasonal merchandise from Thanksgiving Day through November 26. The deal was available for purchasers of products including home decor, tree trimming items, ribbons and bows.
“We want to help our ExtraCare members take the stress out of the season with quality deals and savings during Black Friday week and beyond,” said Judy Sansone, senior vice president of front store business for CVS Pharmacy and chief merchant of CVS Health. “With a variety of holiday-themed products and gifts for everyone, including our first-ever Christmas Bucks offering, CVS Pharmacy makes it easy for customers to cross everything off their holiday to-do lists, effortlessly and conveniently, without compromising their holiday budgets.”
Black Friday deals included “free after ExtraBucks Rewards” offers on Physicians Formula Organic Wear, Gum Toothbrushes and CVS Health nicotine gum.