The 2016 holiday shopping season was a success for American retailers, yet there was a large disparity between online sales, which surged 15% above last year’s figure, and traditional stores, which saw stagnant or declining traffic in many cases.
The recent holiday shopping season was a good one for retailers, with anticipated growth of 4.9% from last year’s figures, the best growth rate since 2005. Total expected sales likely surpassed $1 trillion for the first time ever, with the average American adult spending $419.
Yet the retail world is changing as e-commerce grows in popularity. Many of the winners of this season were online retailers, such as Amazon.com, which saw their profits soar to record highs. Conversely, a number of longtime icons, including Macy’s, Kmart and Sears, announced major layoffs and store closings for the end of 2016.
Online Sales Surge
Cyber Monday has been with us for more than a decade, but this year’s entire shopping season had an online emphasis. While final figures might be a long time in coming, it is already obvious that Amazon experienced its best season ever, with more than 1 billion items shipped worldwide. The artificial intelligence voice-controlled Amazon Echo assistant was a major factor powering the company’s surge.
Whether in-store or online, technology, including smartphones and tablets, were hot items. Apple Inc. reported 44% of all phone and device activations during the season.
The season was good news for many, but it was bad news for others. Such rapid overall growth in sales made it clear who is falling behind and who is excelling. Sales slowed down at traditional malls, which is bad news for those with careers in traditional retail. Still, there were some brick-and-mortar bright spots, with Home Depot and TJX performing well. But mid-range retailers, stuck between value and quality, which includes many top department stores, generally saw a dour season.
A Longer Season
One of the hallmarks of this shopping season was its length. According to a National Retail Federation survey, more than 40% of Americans reported buying their first gift by October, a record for an early start. January 3, the first day many people returned to their jobs, was expected to see sharp increases in online sales, as people used gift cards or bought items they were hoping for but did not receive during December.