Just five more days.
That’s the number of days until the official start of the retail holiday shopping season, marked by the 61 calendar days in November and December. The holiday season is by far the biggest shopping season for the retail industry. In fact, it can generate nearly 10 times the sales than the industry’s second-largest shopping season, the back-to-school season.
This holiday season, the National Retail Federation (NRF) projects retail sales to increase by 3.8%-4.2% over last year to a total of nearly $730.7 billion. Over the past five years, holiday sales have increased, on average, by 3.7%. Retailers are hoping this year’s holiday shopping season fares better than 2018, when sales increased by just 2.1%. In 2017, holiday sales increased by a highly robust 5.2%.
The two biggest shopping days of the holiday season are Black Friday and Cyber Monday — which encourages consumers to shop online. Retailers typically offer steep discounts to entice consumers to kick-off their Christmas shopping.
Last year, more than 165 million Americans shopped online or in-store in the five days from Thanksgiving to Cyber Monday, spending an average of $313.29 on gifts and holiday-related items. On Black Friday alone, sales at traditional brick-and-mortar stores grew 9% to $23 billion. Online sales increased by 24% to a record $6.2 billion. On Cyber Monday, Americans spent a massive $7.9 billion shopping online — up 19.3% from 2017 — making it the largest 24-hour online shopping day in U.S. history.
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Unfortunately, for retailers, the initial burst of consumer sales from the Black Friday and Cyber Monday shopping days quickly tapered off for the rest of the holiday shopping season. This conveyed that consumers were willing to spend money on holiday shopping, but only on heavily discounted prices. And for retailers, there’s just not a lot of profit to be made when the bulk of your sales comes from heavily discounted goods and services.
There are a number of contributing factors to last year’s modest holiday shopping season. Triggered by concerns of a weakening global economy, escalating trade disputes and the Federal Reserve raising interest rates, from October 3-December 24, the Dow Jones Industrial Average fell 5,036 points, losing almost 19% of its value. For consumers, economic worries and plummeting stock prices dampened their holiday shopping spirit.
This year, however, retailers are expecting the American consumer to resume their holiday spending habits. Despite lingering global economic weakness and trade negotiations, the stock markets remain near all-time highs. With an unemployment rate of just 3.5%, the U.S. labor market is the strongest in 50 years. Annual employee wages growth remains high at 2.9%. And perhaps most important, consumers remain confident in their financial and economic future.
For retailers, the table certainly appears set for a strong retail holiday shopping season. But with just five days left before the season kicks-off, are American consumers willing to live up to these high expectations?