NEWSLETTER
By Savyata Mishra and Siddharth Cavale
(Reuters) – Price-conscious holiday shoppers opened their wallets for last-minute online discounts on clothing and stocking stuffers, potentially benefiting retailers that also offered such convenient options as free delivery and curbside pickup.
The popularity of online shopping has increased due to its convenience, similar or lower prices than in stores, the availability of services such as “buy online, pick up in store (BOPIS)” and fast, free deliveries, Michael said Schulman, a retail trading expert at Running Point Capital Advisors.
“This year's shorter holiday season compared to last year, with a tighter restriction between Thanksgiving and Christmas, also left less time for in-store retail shopping and likely encouraged more browsing and purchasing by phone and computer “, said.
While there were plenty of deals, retailers seemed to have been disciplined with promotions. Aim Shares of (NYSE and Dollar Tree (NASDAQ were up nearly 3% in midday trading, while Walmart (NYSE ) was flat.
According to a SpendingPulse report from Mastercard (NYSE:), online spending during the holiday shopping period from Nov. 1 to Dec. 24 grew 6.7% over last year, compared to an increase of 2.9%. % of sales in stores.
This contributed to a total spending increase of 3.8% during 2023, exceeding the previously forecast increase of 3.2% and surpassing the 3.1% increase during the same period last year.
Steve Sadove, a senior adviser at Mastercard and former CEO and chairman of Saks, told Reuters that spending increased even when higher prices due to inflation were taken into account. He noted that the last five days of the Christmas season accounted for 10% of all Christmas spending. showing “a lot of strength at the end.”
With only 27 days between Thanksgiving and Christmas (five fewer than last year), retail executives were less enthusiastic about the holiday season.
They described their consumers as “selective,” “cautious,” and “conservative,” and as making “need-based” purchases. As a result, many retailers redoubled their efforts to cut prices and offer promotions, Bernstein analysts said earlier this month.
Walmart said it would continue to lower prices through markdowns, while rival Target said it would increase its promotional intensity as shoppers were not as engaged without promotions. Dollar General (NYSE said it expects profits to come under pressure from increased promotions in the fourth quarter, while Kroger (NYSE and Five Below (NASDAQ ) also said they had to reduce prices to be competitive.
Walmart and Target spent more on ads to reach shoppers on the short-video app TikTok and streaming platforms like Peacock and Hulu during the season, highlighting their membership programs that offer fast delivery and BOPIS.
Some of these efforts appear to have worked.
Salesforce (NYSE:) estimated that the number of BOPIS orders could double over the weekend before Christmas, accounting for nearly 40% of all online orders from retailers. And deliveries are strong, too: FedEx (NYSE last week estimated a higher-than-expected holiday delivery volume.
REAL STRENGTH OF THE CONSUMER
Aireale Hobbs, 40, of Huntsville, Alabama, started doing Christmas shopping online for pajama sets, Stanley cups and toys for her family on Black Friday.
He said he chose to do most of his shopping online for its convenience, more options and better deals.
“I got some things from Target that were discounted by using the app,” said Hobbs, who works as a receptionist at a doctor's office.
New technology laptops and TVs, lower prices and growing acceptance of lab-grown diamonds, and sportswear also encouraged shoppers to spend this holiday season, even though promotions were at the same levels. than last year, Sadove said.
<img src="https://technicalterrence.com/wp-content/uploads/2024/12/Last-minute-bargain-hunters-drive-holiday-retail-sales-up-from-last.jpg" title="© Reuters. FILE PHOTO: An item depicting Santa Claus hanging in a gift shop, in Bryant Park, in New York City, New York, U.S., December 9, 2024. REUTERS/Kent Edwards/File Photo” alt=”© Reuters. FILE PHOTO: An item depicting Santa Claus hanging in a gift shop, in Bryant Park, in New York City, New York, U.S., December 9, 2024. REUTERS/Kent Edwards/File Photo” rel=”external-image”/>
“The promotions were controlled. There was nothing extra deep and there were no panic promotions. What we saw was real consumer strength,” Sadove said, adding that low unemployment and higher wages were protecting personal finances.
Sales in the apparel, jewelry and electronics categories rose 3.6%, 4% and 3.7%, respectively, from last year, according to Mastercard. Online sales of clothing, in particular, grew 6.7%, compared to 0.2% in stores.
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