Early report on holiday spending is positive for retailers
A promotional holiday season, stronger economy and sturdy consumer confidence likely added up to as much as 16% more spending in the recent holiday season, according to a survey completed by the International Council of Shopping Centers.
The post-holiday report indicated consumers spent an average of $711 on gifts and other holiday-related items this holiday season. This represents a 16% increase over 2015’s post-holiday survey results ($611) and is 4% ($27) above holiday shoppers’ intentions as measured in ICSC’s Holiday Shopping Intentions Survey in October.
The survey found consumers doled out an average of $897 on gifts and entertainment expenditures made at shopping centers and malls throughout the recent holiday season. The biggest spenders were Gen X consumers at $1,000. Baby Boomers spent an average of $875, while Millennials said they doled out $867 on average, with $220 of that going to experiences such as movies, dining, and concerts.
“Consumer confidence continued to improve into December and we saw this optimism reflected in the holiday spending numbers,” Tom McGee, president and CEO of ICSC, noted in the Jan. 3 release. “The strong holiday shopping season suggests a positive environment for retail sales overall.”
The sales promotions ahead of Thanksgiving did not sway a majority of holiday shoppers to finish shopping early as the report indicated 51% of all holiday shoppers waited until the last few days before Christmas to complete their shopping.
Technology continues change the way more consumers shop. The survey found almost 70% of total holiday-related expenditures occurred in stores with a physical and an online presence. Roughly 91% of shoppers spent money at physical stores, which was equal to a year ago.
About 61% of consumers combined online shopping with in-store pickup often to save shipping costs. Specifically 75% of Millennials used these types of omni-channel shopping options. The survey also found that Millennials were also the most likely demographic to visit a shopping center this holiday season (81%), compared to 62% of Boomers and 73% of Gen X consumers. Concerns that Millennials’ affinity for technology would result in the death of physical retail are unwarranted, according to McGee.
He said Millennials use technology to enhance, not replace, the physical shopping experience. The survey indicates 86% of Millennials used a mobile device while shopping in-stores and 96% made a purchase from those retailers. The most common reasons Millennials use of technology while in-store include:
• 52% compare prices;
• 40% checked availability/inventory;
• 37% got digital discounts or coupons; and
• 33% read reviews/ratings.
The survey also revealed omni-channel retailers have the best chance for success in the future. The survey found consumers routinely opt to shop online with retailers that also have a physical location. This holiday 69% of total expenditures were in stores that have also have an online presence, compared with 25% of total expenditures made with online retailers such as Amazon.com. Nearly one in four dollars spent online with was with retailers offering click and collect, or pickup in store.
“The convergence of physical and digital continues to be important as consumers have come to expect an integrated experience allowing them to buy products through a variety of channels,” said McGee. “The survey data proves that omni-channel retailers are the real winners this season as they offer purchasing options that satisfy the shopping behaviors of all generations.”
Among the 70% of consumers who visited shopping centers this holiday season, 73% shopped, 45% dined at a restaurant or other eating establishment, and 26% saw a movie. Among shoppers, the most purchased categories were gift cards (63%), apparel and footwear (50%), and toys and games (44%), the survey notes.