While the economy is still struggling to fully recover, Thanksgiving, Black Friday and Cyber Monday came as a relief for the retailers this holiday season. The holiday weekend sales have helped consumer confidence strongly improve. Amid the economic gloom, it seems that consumers had saved enough bucks to grab the best deals available now.
A recent report by Conference Board data suggested that Consumer Confidence Index rose to 73.7 in November from a revised 73.1 in October, and attained the highest level since February 2008, when the index touched 76.4. This prompts a sense of optimism about steady increase in consumer spending going forward; barring the impending “fiscal cliff” making its way in. The impact of fiscal cliff or $600 billion in tax increases and spending cuts will take its effect from the beginning of 2013 if not resolved by Congress.
According to National Retail Federation (NRF), the survey performed by BIGinsight revealed that as many as 247 million bargain hunters visited stores and browsed the Internet over the past weekend compared with 226 million in the prior year. The average spending per customer rose to $423.6 over the weekend, up 6.3% from $398.6 in the prior-year comparable period. Average online spending increased 14.5% to $172.4 from $150.5 in the corresponding period last year.
The data compiled by NRF also suggested that sales on the Thanksgiving weekend surged 12.8% to $59.1 billion from $52.4 billion in the year-ago period. Notably, sales did rise, but the rate of growth decelerated from 16.4% growth rate achieved in the prior-year period.
This doesn't mean retailers haven't done their homework. Instead, they have now gained enough experience to make the best amid lingering gloomy economic conditions. Early-hours store openings, huge discounts, promotional activities and free shipping on online purchases were enough to lure customers on Black Friday, which turned out to be a bonanza for both brick-and-mortar as well as e-commerce retailers.
As suggested by comScore, Black Friday witnessed online retail spending of $1.04 billion that increased 26% from $816 million in 2011, whereas Thanksgiving Day saw a 32% jump in online spending to $633 million. Amazon.com Inc. (AMZN - Free Report) recorded highest online traffic as per comScore on Black Friday and was followed by Wal-Mart Stores Inc. (WMT - Free Report) , Best Buy Co. Inc. (BBY - Free Report) , Target Corporation (TGT - Free Report) and Apple Inc. (AAPL - Free Report) .
However, retail sales on Black Friday, which kicks off the holiday sales, edged down 1.8% to $11.2 billion, while foot traffic climbed 3.5%, according to the data released by ShopperTrak. Analysts believe that Thanksgiving Day attracted some sales from Black Friday due to the early offerings of best deals.
IBM Corporation (IBM - Free Report) reported a 30% sales increase on Cyber Monday. Supposedly, the sales increase was helped by tech savvy consumers buying best online deals through their smartphones, tablets and computers. The data is based on survey done on 500 retailers.
Thus, it seems that the holiday season is shaping up well, lifting consumer’s confidence, benefiting retailers and giving some momentum to derailed economy. Sensing the pulse, we could see more competitive pricing and launch of new products to attract shoppers in the holiday season.
We believe that retail companies will be actively making efforts to win the hearts of bargain hunters. Interestingly, it definitely remains a wait-and-see story as to which retailers emerge successful in wooing maximum consumers in this distressed economy.