NRF’s Latest Holiday Report Paints a Pretty Picture for Retail
By Glenn Taylor
. . . Now, the National Retail Federation’s unofficial results indicate that November-December sales grew 11.5 percent, outpacing initial estimates of 8.5 percent to 10.5 percent for a projected $843.4 billion to $859 billion haul, Katherine Cullen, NRF senior director of retail and consumer insights,said in Friday’s webinar hosted by predictive demand analytics platform Planalytics.
“This is historic, particularly when we consider the fact that last year we saw growth of about 8 percent for the holiday season,” she added. “As we look to the future, those comps may be hard to match, but definitely speak to where the consumer is and what we are expecting.”
NRF backed up the idea that November may have buoyed holiday sales overall, with 61 percent of consumers starting their shopping by early in the month, according to the trade group’s November Consumer Holiday Survey. Early November shoppers have been growing in number each of the past three years, totaling 59 percent in 2020 from 56 percent in 2019 and 55 percent the year prior.
NRF’s data suggests that fewer shoppers now wait until the last minute to buy their final round of gifts. Forty-two percent of shoppers said they bought their last gift at least one week before Christmas Day, more than the 40 percent who did last year. In 2017 and 2018, this number was as low as 34 percent, NRF said.
“One of the key reactions to the supply chain disruptions is that retailers really started communicating to consumers early about shopping for the holidays,” Cullen said. “They were encouraging consumers to start their shopping early, and to allow for the curve of demand to be flattened and also to allow for more time if new inventory was coming in. If there were delays or items were backordered, this could allow for more time for their items to get to shoppers.”
Beyond supply chain disruptions, Cullen indicated that earlier Thanksgiving and Black Friday promotions played a role in the November shopping push, as 49 percent of consumers took advantage of some form of head-start holiday sales before Thanksgiving.
However, it seems retailers maintained their promotional cadence throughout the season, as 56 percent of shoppers felt the early deals were the same as offers that came later on in the season, up from 53 percent in 2020 and up from 48 percent in 2019.
“That says to us that shoppers felt that they were finding good Thanksgiving-type deals early in the season, well before the Thanksgiving holiday,” Cullen said.
Nevertheless, 65 percent of shoppers said they would continue holiday shopping after Dec. 25, indicating that they still plan to pounce on holiday sales and promotions, and redeem gift cards they received during the season. . . .
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Weather events can’t be ignored in 2022
Turning to 2022, retailers must better assess the impact that weather can have on their operations. Weather has a larger economic influence on the holiday season than any time during the year, Evan Gold, executive vice president, global partnerships and alliances at Planalytics, said during the webinar.
For example, disruptive weather like a blizzard would keep shoppers at home, while warmer, dry weather naturally encourages store traffic. While November averaged the coldest temperatures since 2019, it was also the driest with the least snowfall in four years, meaning shoppers had fewer obstacles to visiting stores, Gold said, adding that the reasonable weather likely drove a higher percentage of seasonal buys.
“The weather directly influences the items that consumers are putting into their shopping carts,” Gold said. “Both physically as well as virtually, consumer purchasing is directly correlated to the weather conditions when and where they’re doing their shopping. When consumers are shopping in cold weather, they’re more likely to put those seasonal items into their baskets as well as purchase hot foods and drinks as they shop. In warm weather locations, shoppers can increase purchasing of categories like electronics, home goods and outdoor categories.”
In total, Gold said there were 18 individual weather-related events that cost the U.S. over $1 billion each.
He cited numerous disruptive events in 2021 that drove or dampened demand for certain products, including the historic February freeze in Texas, the triple-digit Pacific Northwest heatwave in June, Hurricane Ida in August and September, the wildfires that ravaged the Western U.S. throughout the summer and early fall, as well as the deadly tornadoes that touched down in Kentucky and Illinois in December.
These events illustrate the volatility in today’s climate that retailers can’t afford to ignore, Gold noted.
“Volatility is the new normal, and if you’ve not quantified the impact of these events on your business, you’ve already built errors in the year 2022 forecasts,” Gold said. “The impact of the weather is known. Accounting for this impact as you build your 2022 plans will bring improvements to your demand forecast accuracy, would also drive financial gains and optimize your inventory levels.”