Trade related concerns, sluggish business spending and other geopolitical issues failed to dampen consumers’ shopping fervor this holiday season. Even six fewer days between Thanksgiving and Christmas this time compared with the last year could not take away the sheen of the season. An improving job scenario, rising wages and improving confidence has certainly encouraged consumers to spend more. While bargain hunters did hit the streets, preference for online shopping emerged stronger.
A report from Mastercard SpendingPulse indicates that sales from Nov 1 through Dec 24 increased 3.4%, excluding automobiles. Meanwhile, online sales surged 18.8%, and made up 14.6% of total sales. While online spending on apparel surged 17%, jewelry sales went up 8.8%. Electronics and department stores e-commerce sales advanced 10.7% and 6.9%, respectively.
Steve Sadove, a senior advisor for Mastercard stated “E-commerce sales hit a record high this year with more people doing their holiday shopping online.” Amazon (AMZN - Free Report) in a release informed that the festive season was a record breaking one with number of items delivered with prime free one-day and prime free same-day delivery nearly quadrupling.
Retail space has witnessed fundamental changes in its dynamics with technology taking the center stage and online shopping gaining preference over traditional ways.
Owing to this transition of consumers, who now prefer to shop online rather than visiting stores, the industry as a whole is facing two primary challenges. Firstly, the companies need to constantly upgrade themselves digitally to take on e-retailers. Secondly, retailers need to come up with innovative ways to draw customers to brick-&-mortar outlets. To be more precise, players in the industry have to play dual in-store and online role.
In fact, retailers have taken initiatives to stay in the race and cater to growing customer needs. From opening smaller-format stores to bringing in new loyalty program and from embracing new technologies to providing fast delivery options on online purchase or via apps, they have been looking at every nook and cranny to strengthen their presence.
Notably, better price, omni-channel capabilities and unique products are requisites for brick-&-mortar retailers to stay competitive with pure e-commerce players. Retail bellwethers from Walmart (WMT - Free Report) to Target (TGT - Free Report) and from Best Buy (BBY - Free Report) to Costco (COST - Free Report) have been leaving no stone unturned to transform with changing retail dynamics.
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