For Most Retailers, a Holiday Performance That Transcends the COVID-19 Crisis
WWD | December 27, 2020
While digital sales have skyrocketed during the pandemic, foot traffic at mass chains, big-box retailers, warehouse clubs, groceries and pharmacies was strong during the holidays. It was a hardlines Christmas with home, electronics and appliances outperforming soft goods, with exceptions in activewear, sneakers and cozy apparel.
Amazon said this holiday was “record breaking,” as was last year. Amazon said it delivered this year 1.5 billion products in toys, beauty and personal care, home and electronics. Last year, it delivered about 500 million products in the same categories.
With cutbacks in ordering back in the spring, retailers have been running out of activewear, loungewear, sleepwear and cosmetics, one ceo of an upscale national retailer, who requested anonymity. His best-selling areas were home, sweaters, sneakers, casual, active, fragrances and designer leather goods. Anything dress up was not in demand. “Fragrances were the best part of the beauty business,” the ceo said. “A fragrance can remind you of a vacation, or somebody you love. It’s an easy way to treat yourself.”
Holiday 2020 sales will wind up anywhere from 2 percent to 6 or 7 percent ahead, spurred by the dramatic shift to online shopping, and the still employed have spent little or nothing on experiential purchases.
Mastercard SpendingPulse reported that 2020 holiday retail sales rose 3 percent, excluding automotive and gasoline, which is close to the National Retail Federation’s forecast for holiday sales to grow between 3.6 and 5.2 percent, to a range of $755.3 billion to $766.7 billion. But nonstore sales, dominated by the web, are expected to increase between 20 percent and 30 percent, for a total haul of $202.5 billion to $218.4 billion.
“It was a strong finish to a strong season,” said Craig Johnson, president of Customer Growth Partners. “After the first 10 days of Christmas and a lot of talk of things slowing down, we are very encouraged. Things picked up. Christmas Eve day was strong, and yesterday, Boxing Day, was the best Dec. 26 we have ever seen. It helped that was a Saturday. People were buying, not just exchanging or returning.”
Deloitte ranked the top-performing subsectors in retail for holiday as home improvement first, followed by mass, electronics, grocery and warehouse clubs.
“It has been turning out better than what we anticipated in the early part of this year,” said Melody Wright, chief operating officer of Von Maur Inc. “We think spring, particularly the first quarter, will be pretty quiet, there has to be significant traction with the vaccine getting out to the population before you see any meaningful improvement. The first quarter will look a lot like the fourth quarter, then some improvement in the second quarter. In the fall, it will get a little bit closer to normal.” she said.