While overall retail sales grew during this year’s holiday season, it was mostly online sales that delivered results with in-store sales stagnant or down in most department stores and retail outlets.
Super Saturday sales, the last Saturday sales day before Christmas, reached a record $34.4 billion, the biggest single sales day in US retail history, according to a report from Customer Growth Partners.
“Paced by the ‘Big Four’ mega-retailers — Walmart, Amazon, Costco, and Target — Super Saturday was boosted by the best traffic our team has seen in years,” Craig Johnson, president of the retail research firm told Bloomberg.
This year’s retail Christmas story, however, was all about online sales.
Online sales jumped 18.8%
MasterCard Spending Pulse reported an 18.8% jump in online sales and a 3.4% overall increase overall in retail sales during the holiday season. Specialty fashion sales grew 17%, electronics increased 10.7% and jewelry sales up 8.8% online. Online sales made up 14.5% of all retail sales the company said.
“Due to a later than usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices,” said Steve Sadove, senior adviser for Mastercard.
Amazon continued its domination of US online sales, reporting a “record-breaking” sales season with free one-day and same-day shipping deliveries nearly quadrupling.
MasterCard further reported Black Friday sales were 15.4% and Cyber Monday sales 24.5% of total holiday online sales this year.
In-store and department stores struggled
While Tiffany jewelry store sales grew 3%, mostly from a spike in sales in China, department stores overall reported a 1.8% decrease in sales in-store while their online sales grew 6.9%, highlighting the importance of omnichannel sales.
Retail sales excluding online buying showed how soft sales were in several product categories including apparel (+1%), jewelry (+1.8%), home furnishings (+1.3%), although electronics and appliances showed a slightly better 4.6% growth.
The challenges are still ahead for brick-and-mortar retailers. Through December, Coresight Research reported a record 9,300-plus store closures in the US with more rightsizing expected in 2020.
Scott Carpenter, head of retail solutions at Great American Group, told Forbes 30% of existing retail space “would cease to exist in its current form, as consumer buying trends shift increasingly online.” He expects mass store closures to continue for another two years.
Oliver Chen, a retail analyst at Cowen expects more conscientious consumption from consumers, especially younger generations in the near future. He said brick-and-mortar retailers need to transition from a sales-only mentality to customer acquisition and retention.
Forbes contributor Warren Shoulberg predicts 2020 will finally see the end of Sears and Kmart which have clung to life as they continue to close stores. He also believes Amazon may acquire a large grocery chain to further its growth in that retail category. Shoulberg expects Walmart’s online sales to continue to grow although slowly as it tries to take advantage of its large store network at the same time.
All in all, retail in 2020 is in for another roller coaster ride dominated by the importance of online and omnichannel sales strategies, continued domination by Amazon, and a complete reshaping of bricks and mortar retailers as we know them today.
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