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      HOMEPAGE
      0

      A Strong Holiday Season for Retailers, Powered by Online Sales

      Ho-Ho-Ho

      Online shoppers are making this a very Merry Click-Mas. Daniel Gross reports.

      Daniel Gross

      Updated Jul. 14, 2017 3:37AM ET / Published Dec. 24, 2012 4:45AM ET 

      Joe Raedle/Getty

      Last week, I had to make my way to 30 Rock for an appearance on MSNBC, and I almost missed my hit. Why? I had forgotten about the need to allot an extra 10 minutes to wade through the crowds in front of Saks Fifth Avenue, to fight through the hordes of tourists and locals thronging the midway at Rockefeller Center, gawking at the tree, watching the skaters, and swinging massive shopping bags like maces.

      It’s been easy to forget that the holiday shopping season is hurtling toward its close. Our attention has been occupied by far more serious matters that make shopping seem irrelevant, even crass—Hurricane Sandy, the fiscal cliff, the Newtown tragedy.

      Nonetheless, the season remains vital to retailers because they rack up huge sales in this five-week period. Back in October, the National Retail Federation projected sales would rise 4.1 percent to $586.1 billion. A good rise, better than average. It looks like it is going to live up to the solid expectations.

      The frenzy that started with the shopping season encroaching onto Thanksgiving and the usual Black Friday stampedes subsided rather quickly. That’s in part because people tend to front-load their holiday purchases. Also, Hanukkah came early this year. Then, real life intervened.

      We may not have seen the same number of reporters doing standups at the mall this year. But the underlying trends that support strong spending growth are intact. Jobs, wages, and rising housing prices tend to translate into rising retail sales and spending. And that is what we have generally seen throughout 2012. Retail sales were up (PDF) a solid 0.3 percent in November from October. On Friday, the Commerce Department reported that personal income rose an impressive 0.6 percent in November from October, while personal consumption expenditures (the engine that drives the economy) increased 0.4 percent. Translation: more wages were paid, more money was spent, and more money was saved. Americans are quietly going about their business—working, paying bills and mortgages, and shopping.

      The International Council of Shopping Centers, along with Goldman Sachs, measures same-store sales at bricks-and-mortar retail outlets. The ICSC’s index for the last several weeks can be seen here. Sales fell off after Black Friday, declining (on a week-to-week basis) in the periods that ended Dec. 1 and Dec. 8. But they bounced back strongly last week, up 4.3 percent from the week before. On a year-over-year basis, however, for the past four weeks, same-store sales have been up 3.3 percent on average. That’s solid, but not spectacular.

      But these days, looking for the enthusiasm of holiday shoppers at malls is increasingly like looking to tabulate the enthusiasm of voters by going to polling stations on Election Day. So much of the activity in both realms now happens elsewhere.

      Indeed, the real shopping frenzy seems to be taking place online. It’s not just that shopping online is more convenient and easy than braving the crowds at the mall. Rather, it seems that a lot of what kids want today can only be purchased online: iTunes and Amazon gift cards, music, movies, e-books, and apps. And as the shopping days grow shorter, it makes ever more sense to fill out your list by clicking.

      The Chase Holiday Pulse tells a story of rapidly rising sales, but with the number of transactions rising and the average value falling. This is the app economy in play. Between Oct. 29 and Dec. 16, online sales were up nearly 12 percent from a year ago. The number of transactions was up 22.1 percent, but the size of the average transaction was down 8.4 percent. But this trend is really accelerating the closer Christmas comes. Instead of rushing to malls for last-minute shopping, people are rushing online for close-to-last-minute shopping. On Wednesday, Dec. 19, for example, online sales were up 39.8 percent from the comparable day the year before; on Thursday, Dec. 20, online sales were up a stunning 61.8 percent from the year before.

      Merry Click-Mas!

      Daniel Gross

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