Holiday sales are always a way to gauge how the economy is faring. When sales fall far below projections, we hurry to analyze what factors caused a lackluster showing at the registers. But when a pandemic is in the mix, consumer spending habits become even more of a guessing game.
There were a few projections gathered through PowerReview’s Holiday Consumer Survey that helped retailers anticipate what sales could look like for 2021:
- Of consumers responding, 48% said they would spend the same amount as they had in 2020.
- A little over one-third (34%) of those consumers said they would spend more than they did in 2020.
- Then 18% said they would spend less than the previous holiday season.
And as far as where they would be shopping…
- A staggering 99% said that they would do at least some of their shopping online.
- Of those consumers, 37% said that they would do at least half of their shopping in a physical store.
- More than half (53%) said that they were concerned about in-store shopping because of COVID-19, but that safety measures would increase their comfort levels.
What Shaped Consumer Behaviors?
In a relatively stable, non-pandemic era economy, simple trends can impact holiday sales, such as stores being open for Black Friday on Thanksgiving evening. Or extended store hours the week leading up to a holiday. But in 2021, there were multiple, economy-wide influences on holiday sales:
Supply Chain Woes: As summer faded into fall, consumers heard warnings that the most-coveted items on their kids’ holiday wish lists may simply not be available. Shoppers were urged to think ahead, buying must-have items early. They were also encouraged to adjust expectations, to make peace with the unavailability of some items.
Labor Shortages: Even when goods were arriving in ports, labor shortages across every segment, from transportation to retail, made it difficult to keep inventory in stock. And even if the inventory was in the store, managers were struggling to keep the store open for normal hours because of staffing challenges.
Early Deals: Realizing that consumers were feeling nervous about the size of the stacks of packages under the tree, retailers offered earlier-than-usual opportunities for reduced prices. From Target’s October Deal Days to Wal-Mart offering early Black Friday prices to meet the needs of consumers. RetailMeNot reported that 83% of consumers said they were planning to get started shopping before Thanksgiving, and 19% said they got started in August.
How Did Sales Turn Out?
The overall trend was in the right direction, with MasterCard reporting that sales were up 8.5% compared to 2020. Online sales were up 61.4% compared with pre-pandemic sales in 2019. And the winning categories were apparel and jewelry, which outshone even their pre-2020 sales.
Even with supply chain problems and labor challenges, the holiday season still brought in healthy sales, especially when compared with 2020.
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