Delaware Public Media

Retailers optimistic shoppers will be in the holiday spirit

Nov 10, 2017

Retailers and shoppers are anticipating a flurry of activity for the winter holidays, with sales expected to be the merriest since 2005.

Consumers also are changing the way they shop, with online purchases expected to surpass sales at brick-and-mortar stores for the first time.

“Our survey found that 59 percent of Americans are going to be shopping online for this holiday season,” said Ana Serafin-Smith of the National Retail Federation, (NRF), a Washington D.C.-based trade group.

Adobe predicts Cyber Monday will be the largest online shopping day in U.S. history, leaping 16.5 percent over last year’s numbers to generate $6.6 billion in sales. There will be abundant online purchases on Thanksgiving Day, the survey says, up 15 percent. Adobe predicts one of every six holiday shopping dollars will be spent between Thanksgiving and Cyber Monday.

Online retailers are responding with significant incentives to spend, says an ADI survey. More than half—51 percent—will offer Black Friday promotions; 33 percent will lure consumers with online door-crashers or major coupons.

Across the board, sales predictions are positive, although surveyors disagree on just how much more consumers will spend. The NRF is forecasting an increase of 3.6-4 percent, while Deloitte predicts a boost of 4-4.5 percent. JLL’s Consumer Shopping Survey is forecasting even more robust figures, an increase of 5-6 percent. Consulting firm PwC says consumers will spend 6 percent more this year.

A number of factors are influencing consumer cheer. The stock market is up 19 percent this year, while the U.S. Labor Department reports the jobless rate is the lowest since 2000. Buyers also will have more time to shop. This season, there are five weekends between Thanksgiving and Christmas, which falls on a Monday.

A significant minority of shoppers aren’t waiting for Black Friday to get started. One in four consumers began spending by the beginning of November, according to an NRF survey conducted by Prosper Insights & Analytics.

One of them is Tanya Duelfer of North Wilmington, who started shopping months ago. She also is among the consumers who plan to spend more this year.

“Most of my presents are toys for our two young girls and eight nieces and nephews,” she says. “My shopping is between Target, Toys R Us, Amazon and eBay, and all online. I started early, buying a present or two with each paycheck. Really takes the sting out of December and enables me to avoid putting on credit cards.”

About one in five shoppers won’t get started until the first two weeks of December, the NRF survey says. Only 2 percent of consumers will procrastinate until the last two weeks before the holiday. The average tab: $967.13.

Not surprising, affluent consumers will spend more. Shoppers earning $100,000 to $149,999 are expected to up their holiday spending by 15 percent, to $1,609 per person, a PwC survey says. Those earning $150,000 and above will jingle all the way to an average of $1,958 this holiday season, or 8 percent more than last year.

Small Business Saturday, launched in 2010, is observed the Saturday after Thanksgiving, a time when consumers are encouraged to patronize boutique and independent retailers. That concept is gaining traction, with 18.5 percent of shoppers expressing a preference for mom-and-pop shops.

Candace Roseo of Wilmington plans to spend her money at Learning Express, Friendly Gift Shop and Shop Lulu, all in North Wilmington, Houppette in Greenville, and Swigg, a wine shop in North Wilmington.

“I try to shop at locally owned businesses when I can and supplement with online,” she says.

For the first time, the most popular destination for shopping is the internet, followed by department stores and big box discounters. The most popular item on wish lists is a gift card, followed by clothing and accessories.

That will have an impact on holiday hiring. Macy’s already has announced it will be bringing on fewer seasonal sales associates this year. The NRF predicts in-store positions will decline by as much as 75,000 jobs, to 500,000.

Meanwhile, expect more jobs at businesses that fulfill online orders.

“We are seeing jobs shift to warehouses and distribution centers,” said NRF chief economist Jack Kleinhenz.

Still, don’t expect clicks will shatter bricks. One-third of online sales—34 percent—will be on brick-and-mortar retailers’ websites. One on four will order online and pick up in the store. About one-fourth—24 percent—will be pure internet plays, buying direct from such sites as Amazon.

Online shopping also is evolving as consumers choose new channels, according to the Adobe survey. Orders via desktop computers are predicted to decline 6 percent to 66 percent of internet-based sales. Smartphone use is surging, up 26 percent to 24 percent of revenue. Tablets are trailing, declining 9 percent for a 10-percent share.

So why the shift? Shoppers overall are more comfortable with online spending, says Marshal Cohen, the chief industry analyst at The NPD Group. Also, younger consumers are maturing in their careers and able to buy.

"Millennials are becoming more important and even Gen Xers are getting their own spending power," he says.

Shoppers also differ by gender. When men were asked who will be the recipient of their most expensive gift, their No. 1 response was their significant other. Women spent more on their children. Across the board, women were more frugal than men, with 40 percent designating less than $50 for their priciest present, compared to 29 percent of men.

A survey by CreditCards.com reports that online retailers have a slight edge in sales of big-ticket items, with 39 percent of consumers choosing to buy their most expensive gifts online, compared to 36 percent in stores.

Meanwhile, major retailers are unveiling strategies to lure consumers to stores. Walmart is throwing 20,000 holiday parties on Dec. 2 and Dec. 16 at its nearly 5,000 super centers, complete with visits by Santa. Guests will view165,000 in-store toy demos and Santa’s helpers will guide customers through their shopping lists. Sears is going straight for the pocketbook, offering up to 50 percent off everything in the store through Thanksgiving weekend. Tanger Outlets in Rehoboth Beach is handing out fashion guides and 20-percent off coupons.