trend insights - effectv3.6%-4% from last year. deloitte’s annual survey estimates that consumer...
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THE 2016 HOLIDAY SEASON WILL BE GREEN
TRENDINSIGHTS
2 TRENDS | INSIGHTS
Sales for the 2016 holiday season are expected to be stronger than last year’s. Many
organizations project holiday sales to increase by 3%-4% this year compared to 2015.
Growth will be stronger with e-commerce, especially mobile commerce, which are
expected to experience double digit gains from a year ago. The holiday season is vital
to many retailers, who last season spent over $4 billion in advertising over the last two
months of the year, more than any other product category. Television continues to be the
most important medium for many prominent retail advertisers, and will be again in 2016.
Introduction: For retailers, November and December are the most important months of the
year. The Retail Trade Survey from the U.S. Census Bureau says 20% of annual retail sales
(excluding automotive and food service) occur in those two months. For some retailers, the
holiday season is even more critical, accounting for 30% or more of annual sales. Based on
the forecasts of several prominent industry analysts, retailers are expected to have one of
the strongest holiday seasons since the recession.
THE 2016 HOLIDAY SEASON WILL BE GREEN
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A Green Christmas: Several organizations providing holiday shopping season forecasts,
anticipate sales increases in the 3.2% to 4% range from a year ago. Here are a few of the
holiday season sales projections:
• Based on their annual survey, the National Retail Federation (NRF) projects retail holiday
sales (which excludes automotive, gasoline and restaurants) to grow by 3.6% from last
year, reaching $655.8 billion. The NRF forecasts that non-store sales, which includes
online purchases, will increase 7%-10% this holiday season, reaching $117 billion.
• Deloitte estimates total holiday sales (defined as November to January) will increase
3.6%-4% from last year. Deloitte’s annual survey estimates that consumer spending could
surpass $1 trillion over the three months. Fueled by smartphones, Deloitte estimates
online sales to grow by 17%-19% over the holiday season, approaching $100 billion.
• Kantar Retail anticipates strong growth of 3.8% from a year ago in 2016. Kantar
forecasts a 2% increase in retail stores and a boost of 16% with online purchases.
• A forecast from Retail Next expects sales in the 2016 holiday shopping season
(November and December) to be up 3.2% from one year ago. Retail Next forecasts a
boost of 14.9% in digital sales this holiday season.
• The International Council of Shopping Centers (ICSC) predicts an increase in physical
stores sales of 3.3% compared to last year. When online transactions are included, the
year-to-year increase jumps to 3.5%. The survey found holiday shoppers plan to spend
an average of $683.90 this year. ICSC reports 85% of holiday shoppers will visit a
website before making any in-store purchases.
• PricewaterhouseCoopers expects holiday spending to be the strongest since the Great
Recession eight years ago. In PwC’s “Holiday Outlook,” they forecast sales to be 10%
higher than in 2015. PwC expects a strong year in digital with sales up 25%. In the
report, PwC sees a trend of consumers preferring travel/entertainment gifts instead of
traditional holiday gifts.
TRENDS | INSIGHTS
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• eMarketer projects that retail ecommerce will grow by 17.2% in November-December
2016, making it the highest annual percentage increase since 2011. Ecommerce is
expected to account for a record high 10.7% of all holiday retail sales in 2016, up from
9.4% in 2015. Mobile retail commerce is projected to grow by 43.2% in 2016, with growth
fueled by smartphones. Amazon is forecast to garner over 25% of all ecommerce dollars
this holiday season.
• In a survey from MNI, 41% of consumers plan on spending more money on gifts than they
did last year, adding up to the $10 billion dollar increase in total sales from last year. MNI
says 93% of all U.S. consumers plan on making a holiday purchase this season. Holiday
spending in 2016 is expected to reach $692 billion.
The are several reasons for the anticipated strong holiday season: higher wages, low
inflation, low interest rates, low unemployment levels, low gas prices and an overall boost
in consumer confidence in the economy. Another factor is the increase in minimum wage
rates in several states, which could lead to lower income consumers spending more during
the holidays.
TRENDS | INSIGHTS
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0% Source: National Retail Foundation
2.1%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
5.1%
6.8%6.2%
3.3%
-4.6%
0.3%
5.2%4.6%
2.7% 2.7%
4.1%
3.0%
AVERAGE DIFFERENCE IN HOLIDAY SALES FROM PREVIOUS YEAR
5TRENDS | INSIGHTS 5TRENDS | INSIGHTS
6 TRENDS | INSIGHTS
THE TEN BUSIEST SHOPPING DAYS OF 2015 HOLIDAY SEASON
When to Shop: Although Black Friday has been the traditional start of the holiday season,
it appears that for many people, the holiday season starts earlier and earlier with each
passing year. A survey by CreditCard.com found that 73% of 1,000 people surveyed agree
with this statement: “It is annoying that the holiday season has gotten earlier.” A majority
of the respondents (52%) believe that “around Thanksgiving” is the most suitable time to
decorate stores. Nonetheless, some retailers, mindful of potential revenue, promote the
holiday season before Thanksgiving.
Early start aside, Black Friday remains the busiest shopping day of the year. (The NRF
said in 2015, 151 million people, nearly half the population, shopped in-store and online
over Thanksgiving weekend.) According to ShopperTrak.com, after Black Friday, the next
four busiest shopping days of the 2015 fell on Saturdays, including the day after Christmas.
For online shopping, Cyber Monday, the day after Thanksgiving weekend, was the heaviest
spending day of the 2015 holiday season. It marked the sixth straight year Cyber Monday
was the busiest day for online holiday shopping. comScore reported $2.28 billion in
desktop buying in 2015. Unlike retail, e-retail’s heaviest shopping days fell on weekdays.
In-StoreFri
Sat
Sat
Sat
Sat
Sun
Sat
Mon
Sun
Sun
OnlineMon
Tue
Fri
Fri
Mon
Mon
Tue
Thu
Wed
Tue
Nov. 27
Dec. 19
Dec. 26
Dec. 12
Nov. 28
Dec. 20
Dec. 05
Dec. 21
Dec. 13
Dec. 29
Nov. 30
Dec. 01
Nov. 27
Dec. 11
Dec. 14
Dec. 07
Dec. 08
Dec. 10
Dec. 02
Dec. 15
“Black Friday”
“Super Saturday”
Day after Christmas
“Small Business Saturday”
“Cyber Monday”
“Black Friday”
“Green Monday”
Sources: ShopperTrak.com & comScore
7TRENDS | INSIGHTS
Ad Spending: Retail was the top product category in ad spending during the last two
months of 2015. Kantar Media reports the category expenditures were $4.35 billion,
an increase of 1.4% from the previous year. For November-December 2015, retailers
accounted for 15.4% of total media ad spending.
Leading Retailers: Walmart was the largest retail advertiser over the two-month holiday
season. In 2015, Kantar Media reported the discount department store spent $255 million
in ad dollars. Following Walmart were Macy’s, Target and Kohl’s. Of the ten largest
retail advertisers during the 2015 holiday season, only two increased ad spending in
2015 compared to 2014: Kohl’s and Amazon. Collectively, the top ten retail advertisers
accounted for 30% of holiday spend of the category.
Source: Kantar Media November 1, 2015-January 3, 2016
$5.00
$4.50
$4.00
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
$4.35
$3.04
$1.68$1.35 $1.33 $1.19 $1.08
Retail Automotive Telecom FinancialServices
Pharmaceutical Insurance Restaurants
TOP AD SPENDERS BY CATEGORY NOV-DEC 2015 (IN BILLIONS)
8 TRENDS | INSIGHTS
Although ad spend grew slightly for the entire category, among the ten largest, it
decreased by 3.3% year-to-year. With the ten largest retailers reporting an overall decline
in expenditures, other retailers outside the top 10 increased their holiday ad spending in
2015, some significantly.
RETAIL MARKETERS INCREASED HOLIDAY AD SPENDING IN 2015
COMPARED TO 2014
• Walgreen’s increased ad spending by 10% in 2015, reaching $57.8 million.
• HomeGoods increased ad spending by 5% in 2015, totaling $50.2 million.
• Zales increased ad spending by 9% in 2015, totaling $42.6 million.
• PetSmart increased ad spending by 40% in 2015, totaling $31.9 million.
• Zulily increased ad spending by 146% in 2015, totaling $31.5 million.
Source: Kantar Media
Retailer
Walmart
Macy’s
Target
Kohl’s
Amazon
JCPenney
KAY Jewerlers
The Home Depot
Best Buy
Sears
TOTAL RETAILERS
Ad Spend ($ in millions)
$255
$238
$183
$130
$108
$102
$90
$81
$76
$64
$ 4,350
% Change 2014
-2%
-8%
-8%
26%
50%
-1%
-8%
-2%
-23%
-48%
+1%
TOP 10 RETAIL ADVERTISERTS NOV-DEC 2015
Source: Kantar Media
9TRENDS | INSIGHTS
Top TV Advertisers: With 44% of spending, Kantar Media reports television was the most
popular medium for retail advertisers during the 2015 holiday season, followed by digital
media at 26%. Looking at individual advertisers, HomeGoods allocated 96% of its holiday
season ad budget to television—more than any other retailer—followed by Kay Jewelers
(93%), Zale’s (92%) and Burlington (91%). Walmart, the top retail advertiser during the
holiday season, allocated 78% of its ad spending to television.
Budget Distribution-Holiday Season 2015: When retailers begin to advertise for the
holiday season can vary. Although most retailers typically start to spend more during
Thanksgiving week and into December, Kantar Media reports one-third of all of retail
ad dollars budget were spent in the three weeks prior to Thanksgiving (November
2-22). During Thanksgiving week, when there were many in-store promotions, 15%
retail ad dollars for the holiday season were spent. Over the next five weeks (November
30-January 3), a majority (52%) of ad dollars were spent by holiday retailers.
Conclusion: No time of the year is more important to retailers than the holiday season.
The NRF reported in 2015 that consumers spent $626.1 billion during the holidays.
By comparison, back-to-school ranked a distant second at $68 billion, followed by
Mother’s Day at $21.2 billion. Kantar Retail forecasts that retailers will continue to invest
in advertising this holiday season with year to year growth in the 1%-2% range. All
indications are this holiday season will be one of the strongest in recent years, especially
for retailers that advertise on television.
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