December 26, 2023
Projections from The National Retail Federation (NRF) indicate that the 2023 holiday shopping season will set a new record, with expected 3%-4% growth over last year, and sales landing between $957.3 billion and $966.6 billion. But as the first phase of holiday shopping ends and the post-Christmas sales season begins, consumers are seeking deals.
Though the holiday season is traditionally defined as the period between Nov. 1-Dec. 31, consumers are being courted earlier and the holiday season is lasting longer, at least until the end of January. In a 2023 CapitalOne survey, 43% of consumers said they began holiday shopping in October. This data gathered from this same survey showed 25 of the largest retailers said at least 20% of them indicated that holiday shopping events began prior to the Thanksgiving holiday. Individual shareholders often hold retail stock as part of their overall portfolio and the holiday shopping season is key to any retailer’s year.
Interestingly, December 26 is second only to Black Friday as the year’s busiest shopping day, and many consumers are looking to buy for themselves what they didn’t receive in gift exchanges. The NRF said the success of post holiday sales can be dependent on the day of the week Christmas falls on. This year, Christmas fell on a Sunday, and many people will have today off, leading to more people seeking discounts, and retailers like Walmart (Tii:WMT) to see a sales bump.
Big retailers like Amazon (Tii:AMZN), Target (Tii:TGT) and Walmart start holiday advertising in early (mid December), increasingly turning to online to boost and compliment in-store sales. The mix of where shopping happens is changing as well. NRF said 58% of consumers will do some shopping online, 49% will shop at department stores, 48% at discount stores, and 44% at supermarkets. NRF said 13% will look for bargains at thrift stores or outlet stores.
Retailers are marketing more to younger generations. According to Charm, 50% of Gen Z’ers and millennials said that they are willing to pay more for expedited delivery and the convenience of in store/curbside fulfillment. This group rewards retailers that offer complete services like buy now, pay later (BNPL). The retailers that invest in technology and the growth of their ability to customize to consumers are reaping more sales.
Though online shopping is a large market, Colleen Baum, a retail partner with McKinsey, said that 85% of consumers buy in-store. Data from the Capital One survey optimistically reports that 65% of consumers make plans to shop during the week between Christmas and New Year’s Day.
Not only does shopping continue later into the season, it begins earlier as well. Holiday deals begin earlier in what is called holiday creep, referring to the “creep” of advertising and holiday shopping that shows up in offers available to consumers as early as July and September. Some retailers are investing in data collection that can inform and direct them how to best market products. Tools like personalization, where data collected from interactions through site visits, opened emails and clicks/interactions can greatly impact the success and is gradually changing marketing focus and how retailers see their customers.
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