Consumer Payment Card News

Holiday Retail Sales Solid as Online Sales Soar 19%

Holiday retail sales solid, hitting projections of 3-4% growth over last year’s shopping season. Specialty apparel was the hottest online retail category. Gizmo sales were driven by Echo Dot, Fire TV Stick with Alexa Voice Remote and Echo Show 5. The most read and most sold book in the U.S. during this holiday season was The Guardians by John Grisham, while the most wished for book in the U.S. during this holiday season was A Warning by Anonymous.

According to the Mastercard SpendingPulse, holiday retail sales increased 3.4% (excluding auto sales) with online sales growing 18.8% compared to one-year ago. The SpendingPulse report details holiday shopping from November 1 through December 24. Key findings of the report indicate e-commerce apparel was up 17% and online retail jewelry sales were up 8.8%. However, department stores saw overall sales decline 1.8% and online sales growth of 6.9%, electronics and appliances were up 4.6%, while the home furniture and furnishings category grew 1.3%.

Mastercard also found holiday e-commerce sales made up 14.6% of total retail and the e-commerce share of overall retail spend for Black Friday was 15.4%, and for Cyber Monday: 24.5%.

Amazon Blockbusters

Meanwhile, Amazon reported more people tried Prime this holiday season than any previous year – in fact, in one week alone, more than 5 million new customers started Prime free trials or began paid memberships. This holiday season, the number of items that were delivered with Prime Free One-Day and Prime Free Same-Day Delivery nearly quadrupled compared to the same time period last holiday season, making this Amazon’s fastest holiday yet. Over 100 million items sold by independent third-party sellers – mostly small and medium-sized businesses – were shipped with Prime Free One-Day Delivery over the holidays in the U.S.

In the U.S., the Echo Dot, Fire TV Stick 4K, Echo Show 5, Echo Auto, and Amazon Smart Plug were among the most popular items shipped with Prime Free One-Day Delivery during the holidays. Other popular items shipped with One-Day Delivery this holiday season include Melissa & Doug Scratch Art, and the Wyze Cam Indoor Wireless Smart Home Camera.

The best-selling toys in the U.S. this holiday season included the L.O.L. Surprise! Glitter Globe Doll Winter Disco Series with Glitter Hair, Melissa & Doug Scratch Art Box of Rainbow Mini Notes, Nerf N Strike Elite Strongarm Toy Blaster (Amazon Exclusive), Hasbro Connect 4 Game, and Crayola Inspiration Art Case Coloring Set.

Some of the best-selling electronics in the U.S. included Pokémon Sword for Nintendo Switch, Wyze Cam Indoor Wireless Smart Home Camera, and Samsung 128GB MicroSDXC EVO Select Memory Card.

Robert McKinley, Senior Analyst for CardTrak and CardFlash, noted while Amazon reported strong growth across-the-board, the giant retailer did not report any hard numbers. Furthermore, Amazon’s holiday news focused on how popular its own products were during the season.

Small Business Saturday

U.S. shoppers who shopped at independent retailers and restaurants on Small Business Saturday, November 30, 2019, reported spending a record high total of an estimated $19.6 billion, according to the 2019 Small Business Saturday Consumer Insights Survey from American Express and the NFIB.

A record number of Britons came out in force to show their support for small independent businesses on the UK’s seventh annual Small Business Saturday this year (December 7, 2019).  About 17.6 million shoppers across the UK hit their local high streets to provide an important boost for the nation’s 5.8 million small businesses. An estimated £800 million was spent in small businesses across the UK on Small Business Saturday, according to Bankcenter.

Super Saturday

Super Saturday, December 21st, continues to be the biggest shopping day of the year with an estimated 147.8 million U.S. consumers expected to participate, up from 134.3 million last year, according to the annual survey by the National Retail Federation and Prosper Insights & Analytics.

The number of people shopping on Super Saturday includes both in-store and online activity. The number compares with the 189.6 million unique shoppers over the full five-day Thanksgiving weekend.

As of early December, 86% of holiday consumers had started shopping and they had completed 52% of their purchasing for the season. Last year at the same point, 88% of consumers had started and had completed 58% of their holiday purchases on average. In 2013, the last time there were 26 days between Thanksgiving and Christmas, consumers had completed 50% of their purchases at the same point.

Early Projections

Earlier, Americans indicated they would spend an average of $1,047.83 this holiday season, up 4% from the $1,007.24 they said they would spend last year. Shoppers between the ages of 35 and 44 plan to spend the most at $1,158.63, according to the annual survey by the National Retail Federation (NRF).

The NRF noted consumers began their shopping early this year, with some starting before November. NRF surveys showed that 39% planned to begin by Halloween, and that consumers on average had completed 52% of their shopping as of the Thanksgiving Day weekend.

Nonetheless, NRF’s forecast predicts that holiday retail sales during November and December will increase between 3.8% and 4.2% for a total of between $727.9 billion and $730.7 billion.

Holiday Credit

Americans tapping holiday credit early this year as holiday spending drove U.S. credit card debt up by nearly $8 billion in October, now growing by approximately 9% over the prior year. The October surprise is consistent with the erratic pattern of consumer spending and borrowing in 2019. Over the past ten months the monthly YOY (year-on-year) change has range from a revised minus 2.3% (March) to a revised positive 10.2% (July), according to RAM Research.

U.S. revolving credit, (97% credit card debt), increased in October at an annual rate of 8.8%, compared to one-year ago, and follows a revised +0.2% YOY (year-on-year) gain in September, according to CardData.

November Retail Sales

The U.S. Department of Commerce reported retail sales, excluding cars and gasoline, were unchanged (0.2%) from the previous month. November sales declined sharply across categories that are closely tied with holiday gift-giving, including clothing, department stores and sporting goods. Spending at bars and restaurants dropped 0.3% last month, the steepest monthly decline since last December.

The NRF recently reported retail sales in November increased 0.1% seasonally adjusted over October and were up 2.1% unadjusted year-over-year, marking the first half of the holiday season with billions of dollars in shopping left to be done.

Consumer Outlook

The November Conference Board Consumer Confidence Index decreased for four straight months. The November Index now stands at 125.5, down from 126.1 in October. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – decreased from 173.5 to 166.9.

To make matters worse for retailers a recent Oracle report found 77% of consumers anticipate returning some of the gifts they would receive. Twenty percent of those plan to return at least half of the gifts they receive.

Other Sources: RAM Research; CardFlash; CardData; CardTrak; Bankcenter; CardBuzz; PYRPTS; PYVNTS; Ruebud Media; Red3 Media