It was supposed to be a slow holiday shopping season for retailers. Apparently, consumers didn’t get the memo. In retail spending reports now coming out, it appears sales were better than just about anybody was forecasting, and while the results fell below pandemic highs, they were stronger than most thought they would be.
The Christmas postmortem is also revealing several key takeaways regarding shopping patterns. While these numbers apply to the broader consumer products market, the home furnishings sector no doubt shares many of the same characteristics.
Better Business
Most forecasts called for a pretty lackluster holiday shopping season, but the results coming in now show it wasn’t bad at all. Research from Mastercard shows sales up 3.1 percent over last year. Not fabulous, but better than expected, and just above the inflation rate that continued to taper off as 2023 wore on. That’s encouraging news as retailers and suppliers alike start off the new year.
Online Outpaced In-Store
Even as in-store shopping continued its post-pandemic popularity, it showed a modest 2.2 percent gain this holiday season, compared to 6.3 percent for e-commerce. Anybody predicting online shopping was starting to plateau needs to rethink that premise and realize that an omnichannel strategy is the only way to go.
Super Saturday
It didn’t quite beat out Black Friday, but the Saturday right before Christmas (which fell on a Monday) was a spectacular shopping day, especially for discounters and anybody selling food. It continued to indicate the shift in shopping patterns that makes the post-Thanksgiving weekend less important overall. In 2024, with a midweek Christmas, watch for the final days to be bigger than ever.
Returns-a-Poppin’
We knew the rate of returns would continue to go up, but it exploded last year. The National Retail Federation estimated that in 2023, more than 14 percent of all purchases were returned, topping out at $743 billion worth of stuff. The December rate will likely be even higher.
And Now, January
We know most retailers played it pretty conservatively on inventory levels, so if their business was better than expected, it stands to reason that the January buying season could potentially be stronger than anticipated. Upcoming shows in Dallas, Atlanta, Las Vegas and New York across the home, decor and gift sectors should give us a pretty good indication of what to expect for the new year.
Listen, Christmas is not always a good barometer for forecasting what’s to come. Holiday 2019 came just weeks before Covid threw the entire market upside down. Once business recovered, it exploded right through to the end of 2021 and into early 2022. Then the bottom fell out of the market, creating a hole much of the industry is still trying to dig itself out of.
Christmas 2023 may turn out to be the start of something good, or yet another detour from what’s next. In the meantime, it was a pleasant surprise worth toasting with something a little stronger than eggnog.
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Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.