By Venky Shankar, Coleman Chair Professor & Director of Research, Center for Retailing Studies, Mays Business School, Texas A&M University
COLLEGE STATION, Texas – Shoppers and retailers alike should be salivating this holiday season. This season is expected to bring in the biggest holiday retail sales ever at over $1 trillion! From Thanksgiving to Black Friday to Cyber Monday to pre- and post-Christmas, consumers will be shopping from all devices, touchpoints, channels for all kinds of items. Overall sales are expected to grow by 4.4-5.5 percent over last year. However, e-commerce sales may grow by a whopping 17-22 percent, topping $130 billion this season. The season looks like a case of Walmart and Amazon steroids!
How is this happening? The economy is good. Jobless rate is really low. Wages are up. Taxpayers will pay at lower tax rates for this calendar year. Importantly, consumers perceive they have more money to spend! For the first time, average spending per person may exceed $1,000 this season.
The upcoming Thanksgiving weekend, including Black Friday and Cyber Monday may make up for 30 percent of annual retail sales. This year, it could be the biggest ever. With 165 million people shopping, more retailers are starting Black Friday season early. Cyber Monday will last longer, and retailers will try to cash in on 24 x 7 consumer convenience. The Thanksgiving weekend is emerging as an extended period of shopping, eclipsing single day focus on Black Friday or Cyber Monday.
What should shoppers expect?
Shoppers should expect an average discount of 35% across retailers. Some retailers like JC Penney and Kohls are offering discounts of more than 60 percent. Nearly a quarter of all discounts will be on clothing and apparel. Categories like jewelry will likely have nearly 70 percent discounts, while video games, apparel, furniture, and consumer packaged goods will exhibit discounts of 40 percent and more.
Thanksgiving Day may offer the best deal on many products. Offers on Cyber Monday may be as good if not better than those on Black Friday. In fact, Cyber Monday is fast emerging as the future of shopping in the U.S. Shoppers can expect free shipping from more retailers this year.
Thanksgiving Day is typically good for jewelry, appliances, computers, tablets, headphones, shoes, smart speakers, video games, and sporting goods. Black Friday is right for Christmas decorations, kitchen items, apparel, tools, toys, laptops, beauty aids, and appliances. Cyber Monday is special for TVs, toys, and travel, and Giving Tuesday ideal for furniture and bedding.
Wait! We aren’t done! Even the Saturday after Thanksgiving is promoted as Small Business Saturday in an effort to generate interest in local businesses.
What are the hot items this year? Smart home assistants/speakers, video game consoles, and smartphones will be sought after. New popular items include virtual reality simulators.
Shoppers will have to search the web to find the best deals.
What should retailers do?
Customer experience will drive sales, and retailers should raise their game to deliver that rather than relying on discounts alone. Retailers may want to seriously consider rolling out cashier-less/lineless shopping that will save time for many shoppers this year. Besides the cashier-less Amazon Go store, Target will be offering a mobile checkout technology experience to its shoppers this year. Delivering a seamless omnichannel experience is key to winning shoppers. Whether its smartphone, physical store, kiosk, or home delivery, retailers should project a consistent presence and offer a holistic experience.
Retailers will also try to spread out deals so that they don’t put too much stress on the consumer’s wallet. This way, they can also balance the sales over a longer period. Free shipping has become table stakes for retailers to compete for shoppers’ wallet during the holiday season. Retailers should capitalize on the closure of Toys r Us stores and sell more toys.
Although more stores will start opening early on Thanksgiving Day, not all retailers will remain open that day. Retailers like Burlington, Costco, Home Depot, Ikea, and Nordstrom, Sam’s Club, and T.J. Maxx will be closed to respect their employees’ time with their families.
Thanksgiving weekend shopping is evolving each year and getting only bigger. There is something exciting for everyone. Whether you want to click from your couch or experience the store through physical touch, you have a greater menu of options than before and fewer excuses to avoid shopping.
Contact: Venky Shankar: (979) 845-3246, firstname.lastname@example.org
Media contact: Kelli Reynolds, Communications Specialist, Mays Business School, (979) 845-3167, email@example.com.