Retail

Why There’s Holiday Gold In Black Yoga Pants  

Holiday eCommerce Shopping Soars

This holiday season consumers seem primed to shop til they drop – with holiday sales projected to grow 3 to 4 percent. Bu they’re not buying apparel, unless it’s athleisure, and not things unless it’s home furnishings. Yes, Sarah Quinlan, senior vice president of market insights with Mastercard Advisors, tells Karen Webster, millennials are moving out of their parent’s basements – and that rings in the holiday cheer all around.

For retailers, feast or famine?

That depends on where one looks this holiday season. Overall, the environment has been one that is proving rather sanguine both in-store and online.

In an interview with PYMNTS’ Karen Webster, Sarah Quinlan, senior vice president of market insights with Mastercard Advisors, said things are shaping up nicely in Cyber Week and beyond.

“The most interesting thing is that retail sales have been amazing this year,” Quinlan said.

To see spending growth is no surprise, she said, because it is reflecting full employment and gross domestic product (GDP) traction. Holiday spending at retailers overall is up 3.6 percent thus far in 2017, and could be on the order of 4 to 5 percent higher year-over-year, with numbers likely to shake out to the higher end. In the United States, workers — notably, millennials — have seen wage increases and are looking to dispose of disposable income.

But, amid those headline numbers, “it is feast or famine,” Quinlan stated.

By way of example, apparel is down 0.4 percent this year, and it has not shown positive momentum since Easter. Women’s apparel is also down, more than 5 percent over the same timeframe, in fact. Gainers in the clothing pantheon include children’s apparel, which is up more than 7 percent, and women’s athletic wear which is up an impressive 18 percent. Black yoga pants are also hot sellers.

eCommerce is up 20.9 percent this year, Quinlan continued, a statistic that should be tempered a bit with the knowledge that eCommerce only comprises 8.4 percent of total retail sales. But, a staggering 82 percent of shoppers will use a mobile device while they are shopping, Quinlan said.

“What’s been selling” in retail at large includes airline tickets, which are up 7 percent year to date and lodging up 4.2 percent. Restaurants are similarly up 3.7 percent.

Several categories off the beaten path might point to the fact that for gift giving, “it’s all about the experience rather than the experience in-store,” Quinlan said.

The U.S. has six times the amount of retail space that Europe does, five times the amount of that of England and two times that of Australia.

“We are overstored to begin with,” she explained.

According to Quinlan, “holiday travel after the holiday” may be a prime gift this holiday season. And might travel have an impact on dining out? The shift is one in which more than 47 percent spent on food is spent on restaurants compared to groceries. Grocery spend has actually grown on the small business side, with sales of less than $50 million annually. Buying food to consume or cook takes place at pop up stores or locations that sell ethnic food.

The U.S. is still a nation of last last-minute shoppers, though with the days before — and especially the very last days before — Christmas standing out like Rudolph’s nose as the biggest holiday spending days of the entire season, rivaled solely by Black Friday. The big day this year will be Dec. 23, Quinlan projected.

“That is when the stores and the malls will really profit,” she said, noting more than 90 percent of the shopping on that single day last year took place in malls.

Furniture and furnishings, a key category for millennials moving out of a family home, will also continue to stand out, up 4.2 and more than 7 percent this year, respectively, by Quinlan’s estimations. The home environment is one that lends itself to the experiential, as “we are clearly enjoying our homes, and taking the fact that the economy is improving” to be able to buy a new sofa, among other items, through a mix of instore and online channels, she explained.

With the consumer ready to buy, this question for retailers remains: “How do you make the consumer yours?”

Quinlan said 37 percent of shopping is done at small retailers, noting women’s boutiques and small hardware stores “will have a very merry holiday season.” This indicates consumers choose to shop at places where they know they cannot and will not be offered a volume discount. They opt, instead, to pay for personalization.

In fact, she advises retailers beef up the loyalty programs, particularly with an understanding of whether consumers want the rewards to go toward goods or experiences.

It’s also best not to discount too soon, Quinlan said. After all, following the post-Thanksgiving holiday shopping lull comes the deluge, and “once you discount, you can’t go back up.”

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