The Supply Side: Field Agent predicts Walmart a top 3 holiday destination

Walmart will be a go-to retailer for a majority of consumers this holiday season, according to new research from Fayetteville-based Field Agent.

The data research firm found Walmart was among the top three retailers consumers signaled out for their holiday shopping destinations this year.

Walmart was the top pick for toy purchases among 39% of survey respondents, Amazon garnered 24% of the top votes and Target ranked third with 17%. The report said Costco and GameStop could each see marginal sales increases this holiday, but Walmart, Amazon and Target will control the lion’s share of toys this holiday season.

Steve Bratspies, chief merchandising officer at Walmart, said toys are one area where the retail giant has invested heavily, especially following the demise of Toys R Us. He said merchants have bought deep again this year, and toys will be a big part of the retailer’s holiday agenda.

Electronics is another area where Walmart has invested heavily, from revamping the electronics departments in stores to looking for exclusive deals with suppliers for hardware and software gaming technology. Despite the investments, Amazon (30% of respondents) is expected to be the top destination for holiday electronics purchased, with Best Buy (22%) and Walmart (19%) following. Costco at 6% and GameStop at 3% were also top destinations named respondents in the recent survey.

Apparel, which includes clothing and footwear, are also top gift items consumers say they will purchase this year. Department store Kohl’s was the top destination for apparel from 21% of the respondents. Walmart and Target each garnered 13% of the top votes from consumers in the apparel category. Walmart has focused on its apparel division in recent years. It’s added seven private brands for adults and children and plans to add more cache brands to its mix with Russell and Avia in performance apparel and signature brands such as EV1 — designed and endorsed by Ellen DeGeneres — and a jean line by actress Sofia Vergara.

Target has always been seen as a chic apparel destination. The retailer works with top designers to curate specific lines for Target. Last month, Target unveiled Target: 20 Years of Design for All, an anniversary collection that sought to bring back nearly 300 of the most popular items sold over the past two decades from Target’s partnerships with Lilly Pulitzer, Missoni, Isaac Mizrahi, Anna Sui, Zac Posen and Hunter.

The efforts from Target and Walmart to revamp and retain a “cheap chic” image in apparel is helping those retailers gain points with consumers. Macy’s, a legacy apparel player in retail, continues to lose ground with just 8% of respondents planning to shop there this holiday. Macy’s, which carries designer brands, finds itself in a tug-of-war with off-price retailers like T.J. Maxx, which sells designer brands at discounted prices.

T.J. Maxx was a top destination mentioned for apparel purchases by 8% of the respondents in the survey — dead even with Macy’s.

BRICK-AND-MORTAR APPEAL
While Amazon is a serious threat to all retailers for online shopping share, Walmart, Target and those with a solid brick-and-mortar presence will benefit from consumers who like to browse and who enjoy the physical shopping experience.

The National Retail Federation (NRF) has forecast holiday sales to grow between 3.8% and 4.2% this year for a total spend of at least $727.9 billion. Roughly 80% of that will be spent at brick-and-mortar stores.

“We know more and more shoppers are buying their gifts online. Yet for most shoppers, brick-and-mortar [shopping] is still the go-to method for buying holiday gifts,” noted Field Agent report author Chris Medenwald.

He said when Christmas shoppers were asked how many different brick-and-mortar retailers they expect to visit this holiday season, the majority (68%) said “more than 5.” Field Agent reported nearly 20% of shoppers plan to visit up to 10 retailers this holiday season. Only 5% said that they plan to do all of their shopping online.

ONLINE GIFT BUYING
The NRF expects online-only sales to grow between 11% and 14% this holiday season compared to last year. CEO Matthew Shay said online sales will make up about 20% of the overall holiday sales numbers this year. That is $1 out of every $5 spent on holiday gifts will be online.

Shay said e-commerce sales are expected to range between $162.6 billion and $166.9 billion this year. But the lion’s share of the holiday sales will still take place at brick-and-mortar stores.

Medenwald said e-commerce has radically transformed shopping, even holiday shopping.

“For as long as we’ve published this holiday report, we’ve watched the number of shoppers buying gifts online rise steadily every year. So how likely are Christmas shoppers to buy gifts online in 2019? As you can see, more than half (52%) said they’re completely likely — no wavering — to shop for and purchase holiday gifts online this year,” Medenwald noted in the report.

Just 1% said they were “not at all likely” to make holiday purchases online in 2019. Medenwald said Amazon’s online dominance should extend into the 2019 holiday shopping season. Among Christmas shoppers who were moderately likely to purchase gifts online, Field Agent asked which single retailer would receive most of their online spending.

“No surprise. Amazon mopped up at 76%,” Medenwald said. “Walmart was a distinct second with just 11% of the consumers choosing it.”

Field Agent found Target was the go-to choice for 4% of the consumers and eBay, Kohl’s and Wish each garnered 2%. Best Buy had 1%.

The report asked shoppers what gifts they were most likely to purchase online this year. Toys were the most popular online gift for 48% of the respondents. Electronics were popular with 43%, and entertainment gifts came in third at 41%.

Apparel is another big category for online shopping by 36% of the consumers surveyed. Accessories such as jewelry are also sought out by 26% of the online shoppers. Gift cards remain a popular holiday gift item, and one in four shoppers said they will buy them online. Kitchen appliance and household gadgets are also sought-after Christmas gifts for many, with 25% of shoppers buying those items online.

Beauty products and cologne comprise a growing category online with one in five respondents planning to make those purchases this holiday season. Field Agent found home decor gifts will be bought by 18% of respondents shopping online, while pet supplies and tools will be purchased by 17% and 12% of online shoppers, respectively.

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.