It seems almost unimaginable now, but 12 short months ago the pre-COVID world was filled with stories about doorbuster sales on Thanksgiving afternoon and reports on whether shoppers would go to crowded malls or seek deals from the comfort of home. And the conversation continued not just on Black Friday, but also on Cyber Monday as well as the equally important Small Business Saturday and Sunday in between.
In the end, the “official kickoff” of the 2019 shopping season proved to be a little bit of everything, thanks to a solid economy and job market, easy credit and consumers who were prepared to splurge on expensive new gadgets and personal luxury items. For Black Friday 2019 consumers spent $7.4 billion, almost a billion more than the previous year.
Fast forward to 2020 and the entire retail landscape — like so many other parts of the world we once knew — has been flipped over, shaken up and transformed into something new and pandemically appropriate.
“Consumers will look to splurge on their own needs and deal with the guilt of missing in-person celebrations this holiday season,” the New York based retail research boutique NPD Group told clients in a recent report. In addition, the study predicts strong demand for gifts that support the current homebound lifestyle.
“Quarantine favorites related to our virtual at-home lifestyles — like monitors, PC headsets, USB cameras, sleepwear, hair care, air fryers, and soda machines — that have sustained growth month after month since March are likely to remain on consumer must-have lists,” NPD said.
As a result, sales of things like appliances and housewares are pegged to grow 15 percent from a year ago, at a time of unprecedented economic variables impacting consumer confidence. And compared to 2019, PYMNTS data shows that this year will be decidedly digital-first.
Last year, according to an exclusive PYMNTS data report published on Cyber Monday 2019, 59.5 percent of U.S. consumers (151 million) bought at least one thing at a store the day after Thanksgiving, down ever so slightly from 61.8 percent (157 million) in 2018. Those who didn’t cited store crowding, not needing anything, financial constraints or a preference to spend their time doing other things as reasons. Those who did went hunting for deals.
In 2019, PYMNTS data showed consumers were trading standing in line at the physical store more for the ease and convenience of buying online. About one in five consumers (20.4 percent) who shopped on Black Friday did so online only, up 10 percent from 18.6 percent in 2018. One in five consumers (20.2 percent) only went to a physical store to shop on Black Friday, compared to 25.6 percent a year before. That’s a decrease of 21 percent.
Compare that to 2020 when new PYMNTS data shows that 96.5 percent of consumers who will shop during the holiday season will do so from digital devices.
Dollars And Sense
For 2020, when it comes to expectations for overall holiday spending versus just online shopping other economists are forecasting two entirely different scenarios that are reflective of times.
On one hand, Deloitte is forecasting total retail sales for November and December to grow by just 1 to 1.5 percent, while eCommerce or online sales could be up as much as 35 percent.
“The lower projected holiday growth this season is not surprising given the state of the economy,” Deloitte economic forecaster leader Daniel Bachman said. “High unemployment and economic anxiety will weigh on overall retail sales this holiday season.”
At the same time, Bachman said eCommerce will be the big winner “because consumers have shown a clear movement towards buying online rather than at brick-and-mortar stores.”
Economists say one silver lining in the soft spending matrix this year is due to the fact that money consumers would have normally spent on dining out, travel and entertainment is available — and likely to be used — for other purchases.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More