Reflecting on Holiday Results at Retail

As retailers release their Q4 numbers, we’re looking back on the holiday as well.

2021 delivered a much better holiday than most predicted, with retailers realizing 13% growth in Q4, according to the U.S. Department of Commerce.  It wasn’t the hustle and bustle of years past, as shoppers mostly stayed home, buying holiday gifts online, and retailers tried to encourage safe buying behavior through convenient, yet distanced, methods of purchasing. Retailers also reimagined traditional holiday activities virtually, and customers accepted things were going to be a bit different than usual.

Let’s take a closer look now at some of the biggest trends seen at retail this holiday season.

Deals Started Early…Again

Getting a jump on holiday shopping was growing even before the pandemic. But this year, headlines about inventory worries, as the pandemic continued to disrupt supply chains, made an early start seem like a practical decision for most everyone…. especially when deals started as early as October.

Online Shopping Continued to be Strong

Growth in online sales lagged brick and mortar % growth, mostly due to the enormous gains this channel experienced last year. Q4 2020 saw gains of +25% vs 2019 while Q4 2021 slowed it’s gains to +10% vs the market average of +13%. Amazon experienced a decline in their online sales worldwide -.5% during Q4 2021, made up for by the other facets of their business.

Source: Amazon financial reports

In-Store Experiences Looked Different

The physical store provides emotional benefits that online cannot replicate.  When polled, 64% of consumers said that the physical store is best for getting in the holiday spirit, while 52% said the physical store is key to having a fun holiday shopping experience.

While shoppers believe that digital shopping offers a better experience on many functional attributes, the physical store provides emotional benefits that online cannot replicate.

Source: Kantar Shopperscapes October 2021

Categories That Won This Holiday

Categories such as Pet, Grocery, Health & Beauty and Baby saw the largest increase in spend throughout Q4 2021. Health & Beauty is already the 2nd largest average spend behind Grocery and saw Q4 annual spend growing within the high single digits. Health & Beauty has the highest purchase frequency with shoppers making 18 trips on average in Q4.

Meanwhile Electronics, Sports, Office and Home & Garden saw decreases in total spend.  Electronics saw the biggest declines within total spend due to supply chain issues.

Wrap Up

Although the pandemic is still very much with us, shoppers showed up this year with in-store numbers up 14.0% and online up 10%, according to U.S. Department of Commerce.  Online sales exceeded pre-pandemic numbers by a much higher rate, showing more and more consumers are shifting their shopping habits.

Retailers continue to innovate in-store by offering ways to connect emotionally, while online shopping is becoming even easier and more engaging with interactive events and easy to use gift guides. To win with holiday shoppers, ease, price confidence and emotional connections are the key to getting on their holiday nice list.