With Christmas fast approaching, retailers are gearing up for a last-minute rush of buyers.
Shops and retail websites are anticipated to attract greater than 148 million buyers on Saturday, in response to an annual survey by the Nationwide Retail Federation and Prosper Insights & Analytics. That is a slight drop from the ultimate Saturday earlier than Christmas final 12 months, a day often called Tremendous Saturday within the business. Final 12 months, 150 million shoppers have been anticipated to prove, which was increased than the estimated 147 million buyers in 2019.
These 12 months, nevertheless, that closing dash might be formed by new and conflicting components. A powerful wave of early vacation purchasing means some shoppers might have much less to purchase. A hotter climate in a lot of the nation may make individuals really feel extra comfy driving to the mall or make them really feel much less within the vacation spirit. And a surge in Covid-19 circumstances within the Northeast and Midwest may trigger gatherings to be canceled or immediate buyers to shift towards shopping online or choosing items as a substitute for reserving journeys or live performance tickets.
Steph Wissink, a retail analyst for Jefferies, stated retailers and buyers are expecting clues, however they inform very totally different tales. Amongst them, client confidence plunged to a 10-year low in November. Retail sales are up but were weaker than expected in November. And some industry watchers and retail trade groups, including NRF, have predicted record-breaking holiday sales, even in a year of supply chain challenges and inflation.
“Usually, all data points are directionally all pointing to a similar outcome,” she said. “Right now, there are data points that are conflicting with each other. So we’re trying to solve for, ‘What is the consumer ultimately going to do?'”
Plus, she said, the omicron variant has fueled “a bummer effect” as some people rethink travel plans, scale back gatherings, or get notified about holiday office parties being nixed.
That showed up in the equity research firm’s survey of 960 people on Tuesday. About half of respondents — 49% — said they plan to travel for the holidays this year. That’s a decline from a survey conducted in November, which showed 55% planned to travel. About 85% said this month that they plan to gather in groups with friends and family for the holidays, a 3% drop month over month.
More shoppers are having trouble finding items, the survey found. Forty-four percent of respondents said they were unable to make a holiday purchase due to out of stocks, a month-over-month jump of seven percentage points.
Wissink said several different scenarios could play out in the week ahead: People may still have a lot of shopping to do, which would likely translate to a spike in store foot traffic. They could feel stuck in the middle, after wrapping up early rounds of holiday shopping and waiting to find out if parties will become Zoom calls. Or they could largely sit out the shopping days leading up to Christmas because of inflation-fueled sticker shock, Covid-related anxiety, or early-bird shopping.
She said she will watch whether retailers slash prices or offer free two-day shipping in the upcoming week, which may signal they are having trouble moving merchandise.
Options for procrastinators
Target said on Friday that customers can place same-day online orders as late as 6 p.m. on Christmas Eve and pick them up in a couple of hours inside of the store or in the parking lot, with no need for a pickup window.
Shoppers also can use its home delivery service, Shipt, to get gifts delivered in as soon as an hour with the last delivery window between 5 p.m. and 6 p.m. on Christmas Eve. And the company said trucks are making deliveries each day to replenish store shelves with toys, clothes, and other gift options.
Pedestrians view the holiday windows at a store in New York, on Thursday, Dec. 2, 2021.
Christopher Occhicone | Bloomberg | Getty Images
Kohl’s will extend store hours throughout the week, keeping doors open from 7 a.m. to midnight from Saturday through Thursday. On Christmas Eve, customers who place an order for eligible gifts by 1 p.m. local time can pick them up at the store by 6 p.m. local time.
Walmart is offering free shipping for orders placed before 2 p.m. local time on Monday, but customers can retrieve online purchases through curbside pickup and delivery from a store through 4 p.m. Christmas Eve. They can also opt for Express Delivery, a delivery option that gets purchases to the doorstep in two hours or less if they order by 1 p.m. local time on Christmas Eve.
Rosy forecasts – for sales and the weather
The NRF, a major retail trade group, has doubled down on predictions that holiday spending will hit a record high. It projected that sales in November and December could rise 8.5% to 10.5% from last year to between $834.4 billion and $859 billion. It raised that forecast earlier this month, saying that spending was on track to grow by as much as 11.5% year over year. The sales forecast excludes spending at automobile dealers, gas stations, and restaurants.
More of those shoppers are early birds this year, however, with a record 42% of people planning to purchase their last gift before Super Saturday, according to an NRF survey in early December. That’s up from 40% a year ago and 30% in 2012, the first year when the trade group asked consumers that question.
More than half (52%) said they expect to pick up last-minute gifts in the week before Christmas, according to NRF.
The weather may factor into how much people shop and what they buy, too. This year, the trends leading up to Christmas is expected to favor retail sales, said Evan Gold, executive vice president of global partnerships and alliances at Planalytics, a firm that predicts and analyzes consumer demand.
Much of the U.S. has had mild temperatures, with this week on track to be one of the warmest mid-December weeks is over 60 years, he said.
Next week, temperatures are expected to be colder than last year in Canada, portions of the Northeast, and the West Coast, but warmer than a year ago in the Southeast and Central regions. Rain and snow will largely be concentrated in higher elevation areas on the West Coast.
That means that customers won’t be detracted by inclement weather like ice and snow and can get to the malls and stores — which is key since some retailers’ shipping cutoffs have passed, he said. Though, he noted, “light snowfall can be helpful in certain markets to draw seasonal demand.”
In January, on the other hand, temperatures are expected to drop compared with a year ago and help move merchandise at the end of retailers’ holiday quarter, Gold said. That could help clear away cold weather-related items, from sweaters and winter coats to snowblowers, as people redeem gift cards, he said.
Last-minute purchases could also lift sales for some retailers, said Craig Johnson, president for Customer Growth Partners. Jewelry purchases are often made late in the season by procrastinators or people who want to split their big purchases between two credit card statements, he said. Fragrances are another pricey gift that’s often purchased late.
Store traffic made a comeback from a year ago on Black Friday. With the rise of omicron, however, more shoppers may revert back to buying online and retrieving purchases through curbside pickup as they check off the final items on the gift list, Johnson said.
“There will not be a reduction in sales, but a channel shifts from in-person to online, going back the other way,” he said.