Holiday shopping sprees get off to a tepid start.
Amid strong online growth, analysts say, merchants may see gains by Christmas
Gray Thursday, Black Friday and Cyber Monday appear to have lost some of their luster, the result of deep discounts that began in early November, consumers shopping before the holiday weekend or waiting until well into December for even better deals, and a backlash against interruption of the holiday to shop, experts said Monday. Despite the tepid start to the holiday shopping season this past weekend, analysts believe there’s still a good chance for holiday sales to be up overall — although only modestly — by the time Christmas Day arrives.
“For holiday shopping this year, it will be a plough horse moving slowly but steadily, rather than a flying reindeer,” said Brian Wesbury, chief economist with Illinois-based First Trust Portfolios.
Wesbury believes the slow but steadily expanding job market, along with a modestly growing national economy, could bolster holiday shopping this year.
Experts believe Christmas shopping sales could rise about 3 percent to 4 percent this year compared with 2014.
Cyber Monday sales are up roughly 15 percent compared with a year ago, according to estimates from multiple research firms.
“Online sales are looking
good and may have done some damage to foot traffic and purchase activity on Thanksgiving and Black Friday,” said Chris Christopher, director of consumer economics with Coloradobased IHS Global Insight, a consulting firm.
Over the final three months of 2015, e-commerce retail sales are expected to account for 7.6 percent of all sales conducted at retailers, excluding restaurants, during the fourth quarter of this year. That’s up from a 6 percent e-commerce retail share of retail trade in 2013, and 6.6 percent in the fourth quarter of 2014, IHS Global estimated.
“Online growth is still strong,” said Bill Martin, co-founder of ShopperTrak, an Illinois-based retail analysis firm. “Retailers are becoming smarter about getting the brick-and-mortar operations to work with the online business.”
Online sales jumped about 25 percent Saturday and Sunday, according to IBM, compared with the two weekend days after Black Friday in 2014.
The roughly 15 percent gain for Cyber Monday should lead to total sales of $3 billion for online commerce Monday, which would be a record dollar volume, according to Adobe Digital Index.
The National Retail Federation reported that more people shopped over the weekend online — 103 million — than did in physical stores — 102 million. Still, all the encouraging trends for Cyber Monday come on the heels of sluggish sales Thursday and Friday, reports released by ShopperTrak show.
Sales tumbled 10.3 percent on Black Friday compared with the year before, ShopperTrak reported. This year’s Black Friday sales totaled $10.4 billion, well off the 2014 Black Friday totals of $11.6 billion.
“Black Friday is becoming less and less of a bellwether for holiday sales,” Martin said. “What happened this year is promotions are coming earlier and earlier. The heavy shopping last year occurred both before and after Thanksgiving weekend.”
While Cyber Monday sales are up at a robust pace, retailers offered huge discounts for online shoppers Saturday and Sunday, ahead of the Monday digital commerce binge.
Retailers were open for fewer hours overall from Thanksgiving evening to Black Friday night.
“The retailers found that the added costs for doing extended hours just didn’t pay off,” said Mark Vitner, a senior economist with San Francisco-based Wells Fargo. “With the switch to more online shopping, maybe it was the right move by retailers to cut back on their hours.”
Merchants also may wind up offering heavy discounts for weeks to come, or even longer, the result of some miscalculations they made earlier this year.
“Retailers experienced an inventory accumulation in the third quarter,” Christopher said. “Stores overestimated the effect that lower gasoline prices would have on the demand for retail during the holidays. They also accumulated inventory because of the West Coast ports labor disruption.”