While unprecedented disruption this year has meant historical data is largely unreliable in planning, an early start to the holiday shopping season can provide insights into how the rest of the season will play out in terms of new consumer behaviors.
According to analysis from Deloitte’s InSightIQ team traditional and online-only mass merchants are poised to “win” this holiday season. In the first three weeks of October, spending at these stores was up between 10 percent and 30 percent.
At the same time, this season is being largely led by sales events. Deloitte’s data found that “sales events from large retailers drove a 6 percent year-over-year spending increase in the retail sector in the third week of October to kick off the holiday season.” Events in October included Amazon “Prime Day,” Walmart “Big Save Event,” Target “Deal Days” and Best Buy “Black Friday in October.”
During the promotional events, Deloitte’s data found that retailers had received a significant spending bump due to purchases in the toys, games, electronics and sporting goods categories, as well as other gift-related purchases. Other peaked spending was seen from home improvement stores with a 19 percent jump in sales during the week of Oct. 17, signaling consumers’ continued plans to stay at home and tackle DIY projects.
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“The InSightIQ analysis confirms that retailers’ strategy to accelerate holiday shopping was successful,” said Jeff Simpson, leader, InSightIQ and principal, Deloitte Consulting LLP. “During Prime Week, major retailers’ online promotions drove the share of digital shopping even higher and helped jump-start the shopping season this year as shoppers purchased items traditionally associated with the holiday season, including toys, games, electronics and sporting goods.”
And consumers are continuing to shop from home. Deloitte’s report revealed a continuing increase year-over-year with the pandemic being the leading catalyst. During the first and second weeks of October, online sales were up by 25 percent and 24 percent, respectively.
“Not only are this year’s consumers spending more time at home, they are shopping from home as well,” said Rod Sides, vice chairman, Deloitte LLP, and U.S. retail, wholesale and distribution leader. “As the Prime week insights show, consumers continue to value savings and convenience. Additionally, consumers are cutting back on the number of stores they visit, both virtually or in-person, making mass merchants the most appealing holiday shop. To win this holiday season, retailers should offer a variety of goods at an exceptional value, as well as discounted or free shipping, free return shipping, and services like buy online and pick-up in-store [BOPIS] to appeal to a range of shoppers.”
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