Barring any last-minute problems, 2019 should be one of the most successful shopping seasons on record, especially for American retailers. Cyber Monday, in particular, was a sign of consumer strength. Consumers spent nearly $9.5 billion on December 2, up 20%. E-commerce has become so critical to industry totals that it may have been a rising tide that lifted all boats. That assumes that all boats are the same, which this shopping season has proved again that they are not.
Data from FedEx, UPS and the U.S. Postal Service show that the busiest shipping day of the year falls on December 14 or 15, so there is still a great deal to come. When the National Retail Federation announced Thanksgiving holiday data, it made the fact clear that only a small fraction of Americans were done with their shopping:
Strong deals and promotions encouraged more consumers to shop over the holiday weekend. More than 154 million consumers will shop over Thanksgiving weekend, up from 151 million shoppers in 2015. NRF’s annual Thanksgiving weekend survey conducted by Prosper Insights found that 44 percent went online and 40 percent shopped in-store. Only 9 percent of consumers have finished their holiday shopping.
Between now and Christmas, the frenzy of sales events and discount promotions may die down somewhat, but the bloodiest hand-to-hand combat among retailers is hardly over.
One tactic retailers have used again this season is ever deeper discounts, as the chance to draw revenue shrinks as the days pass. The theory is that the need for retailers to offload inventory and drive their top lines is bad for them and good for consumers. Without any question, the consumer part of the equation is accurate. J.C. Penney Co. Inc. (NYSE: JCP) is pushing discounts as high as 30% and free shipping for as little as $49. The company’s net income ratios to revenue have been razor-thin recently, after a number of quarterly losses. How much thinner can they get?
Kmart is also discounting some items as much as 30%. Sears stores are equally aggressive, offering 25% discounts for shoppers who spend over $75 on some items — online only.
Mighty Walmart Inc. (NASDAQ: WMT) also offers a long list of shipping, credit card and discount deals. Even at its size, the retailer is not immune from the need to discount and keep or drive up its market share in a jam-packed industry.
With just 15 days until Christmas, every retailer is battling its way forward.
Source: Read Full Article