In the aftermath of the 2020 Christmas holiday, new data from the Mastercard SpendingPulse report shows that overall retail sales were up 3% over the extended holiday season. Yet despite the impressive growth of e-commerce year over year, apparel suffered an overall decline of 19.1% from this time in 2019.
After a challenging several months, the holiday season was a critical opportunity for retailers to recoup sales and end the year in a more advantageous position. Consumer shopping behavior and mandated restrictions saw brick-and-mortar sales plummet; new remote work lifestyles encouraged the purchasing of comfort products and essentials, over traditionally strong sectors like dining and travel.
Some retail categories were able to achieve significant growth, namely home furniture and furnishings: that market saw an overall increase of 16.2% from 2019, with 31% growth in e-commerce specifically. Home improvement reported the second highest growth (14.1% YoY) with particularly strong digital gains of 79.7%
“American consumers turned the holiday season on its head, redefining ‘home for the holidays’ in a uniquely 2020 way,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. “They shopped from home for the home, leading to record e-commerce growth.”
But apparel was not so fortunate, despite the holiday sales rush. Mastercard reported that year-over-year, the category’s online growth (15.7%) did not balance out the brick-and-mortar slump, leading to an overall decline of 19.1%. Department stores were similarly hit, with overall losses of 10.2%, despite e-commerce growth of 3.3%. Luxury and jewelry also reported declining figures, of -21.1% and -4.3% respectively.
This data emphasized the importance of omnichannel, particularly without the usual holiday sales rush to rely on. The traditional holiday period monitored by Mastercard is marked as November 1 – December 24, however this year’s shopping period was extended; Mastercard also assessed data from October 11 – December 24, to account for Amazon Prime Day and other early holiday shopping.
“Consumers shopped earlier than ever before: Across our expanded 75-day holiday shopping season, sales were up 3.0%, a testament to the holiday season and strength of retailers and consumers alike,” said Sadove.
A longer holiday shopping season can damage bottom lines, as sales are stretched and possibly discounted further to maintain consumer interest. It also reduces the usual rush of people who go in-store to capitalize on deals, making it imperative for retailers to offer multiple fulfilment channels to maximize their conversions. Buy online, pickup in store is one way for retailers to use both online and offline channels.