How did COVID-19 impact holiday sales?
Our lives have drastically changed since COVID-19 shut down the world last March. However, one of the few things it hasn’t changed is our love of giving and our excitement to celebrate the holidays with our families, be it in-person or virtually. With COVID-19 closing down the economy and causing millions to become unemployed, many economists became skeptical about whether or not holiday sales would reach pre-pandemic levels. As the holiday season passed, the answers to these questions emerged.
Online spending on Black Friday surged 22% to a new record high. Consumers spent nearly $9 billion online on Black Friday, up 21.6% from last year. An abundance of online-only deals, combined with surging COVID-19 cases and holiday sales beginning in October, has led to Black Friday 2020 becoming the second-largest online spending day in history, behind Cyber Monday 2019.
Overall, extended holiday retail sales (which began on October 11 this year, due to an abundance of early holiday deals) grew 3% from last year, beating expectations of a 2.4% increase. Online sales also rose a whopping 49% from a year ago. However, in-store retail sales at department stores fell 10% over the extended holiday season. This drop is primarily attributed to consumer fears of returning to malls while COVID-19 cases surging. Within overall retail sales, home improvement and furniture sales rose dramatically from last year, increasing 14% and 16% respectively. On the other hand, apparel and luxury sales struggled the most, falling 19% and 21% from last year. These statistics represent the changing American spending habits.
With online sales surging, waiting in long lines for holiday deals may become a thing of the past. Americans have shown that they prefer to sit comfortably at home and purchase everything they need online. This could have massive implications for department stores, specifically those that primarily sell apparel, and for malls in general. Both department stores and malls heavily depend on foot traffic to help boost sales, and the shift from in-person shopping to online shopping could lead to drastic consequences.
Despite COVID-19 causing some of the highest levels of unemployment in a decade (which, consequently, caused many to go hungry and fall behind on their bills), holiday sales surged online. This has proven that despite these challenges, Americans still purchased gifts for their loved ones, an a time where in-person gatherings are a challenge.
(2020, December 26). U.S. Holiday Retail Sales Rose 3%, Driven by Online Shoppers .... Retrieved February 6, 2021, from https://www.bloomberg.com/news/articles/2020-12-26/u-s-holiday-retail-sales-rose-3-driven-by-online-shoppers