Retail experts from industry analysts to small-town shopkeepers are optimistic about this year’s holiday sales season, even if Black Friday and its door-buster mobs are playing a smaller role in the total sales picture than in years past.
Retailers traditionally count on holiday shoppers to generate up to half of their annual revenue and most all of their annual profit. What’s changing is where and how retail sales are made.
“What we see is that the clicks continue to outpace the bricks when it comes to sales growth and comparing the rates of growth for on-line sales versus retail in-store sales,” Chris Christopher, director of consumer economics for IHS Global Insight, told CBS MoneyWatch. “Ten years ago it was just computer geeks driving this. Now consumers are buying all kinds of things online, even food.”
Christopher predicts that holiday sales will increase by a healthy 3.5 percent this year, but online sales will jump by 11.7 percent over 2014. For context, consider last year’s total holiday sales posted a 4.1 percent increase over 2013 while online sales grew 10.9 percent.
The latest U.S. Commerce Department data suggests consumers have pulled back on their spending before the holidays and are actually saving their money. According to the University of Michigan’s latest consumer sentiment data, consumer confidence slipped a bit despite recent upticks in personal income and continued out-of-pocket savings from a prolonged drop in gasoline prices.
“Consumers are holding back and waiting for the good deals,” Christopher explained.
Interviews on Black Friday with shoppers in Morristown, New Jersey, confirm his analysis. “We have not spent money we were going to spend because we know the sales are coming,” said Alex Binkley, 33, married with a 10-month-old daughter. “I almost do nothing in the store. I pretty much do all my shopping online. Most people I know don’t want to deal with stores and the hordes of people.”
Amy Layton, 32, has more disposable income than she did back during the Great Recession, but still looks for values. Still, she’ll splurge for a unique gift she knows will be cherished by the recipient.
“We were watching the Macy’s Thanksgiving Day Parade and saw that the new Gloria Estefan musical (“On Your Feet”) was opening and we bought tickets for my parents,” Layton said. “Those tickets were expensive, but the Macy’s Parade did its job.”
Nursing student Kameil Gash, 31, said she’s noticed some department stores like T.J. Maxx pulling back some on the early-hours Black Friday rituals, something her family used to participate in. “My mother and aunts would be out there first thing in the morning,” Gash said. “I saw these ads where T.J. Maxx was saying they did not want to take the home out of the holidays and it makes you stop and wonder what are you doing it for?”
That concept of values is at the heart of Small Business Saturday, started by American Express back in 2010 to promote shopping at small businesses the day after Black Friday, which has been historically skewed as a windfall for big retailers.
Shawn Kellner manages Grassroots, a health food store and gift shop in Morristown that is locally owned and participating in Small Business Saturday. This year a Whole Foods supermarket opened in Morristown, yet Kellner said this year his sales running up to Thanksgiving were better than the year before.
“People will come from 15 to 20 miles away to shop here if they don’t have a locally owned health food store in their town,” Kellner said.