By Maris Cohen, Content Marketing Manager, The NPD Group
What Happened When We Pored Over Tech, Apparel, and Coffee Receipts
If you’re anything like us here at NPD, the holiday season is a pretty big deal. Heck, we start getting in the holiday spirit come September. We relish the outpouring of shopping status updates November through December. Even now that the garlands are down and retired fir trees line the streets, we’re still talking about the retail holiday. That’s because we like to start out the New Year with a moment of reflection: a look back on full 2015 holiday shopping data and a play-by-play of the season’s highlights and lowlights, using the lessons learned to plan for an even better and brighter 2016.
We started our period of reflection with a look at shopping receipts for all of November and December, with the help of our Checkout Tracking℠ team. A panel of 50,000 shoppers sent us photos of their receipts so we could see what they’d been up to on the retail floor. Then, nearly four million online shoppers over the age of 18 let us scrape their email inboxes (thanks, Slice Intelligence) to see what they bought in the online space. Where did this leave us? We could see where, when, and what people bought along their holiday purchase journeys.
We’ve learned some pretty cool holiday shopping takeaways, like the fact that people shopped earlier in stores this year than they did last year, but they shopped later online. And that people were really into LCD screens this season. Also, we discovered people who buy LCD screens are more likely to buy clothes at Aeropostale. We’ve gathered here some key observations that may prove helpful for a brand or retailer like you as you plan for the 2016 holiday season.
People Spent More Across All Channels This Holiday
Good news for both retailers and e-tailers alike: shoppers spent more during the 2015 holiday season than in 2014, both online and offline. Average brick-and-mortar spend per buyer reached $1,221—an increase of $88 from the 2014 holiday. And average online holiday spend per buyer reached $418 from November 1 through December 26—an increase of $74 from 2014 spending levels. Average online spend per person increased at a much higher rate from 2014 levels than did average offline spend per person (21.3 percent vs. 7.8 percent). So in other words, the online marketplace continues to grow as people are drawn toward the convenience of shopping from home, while waiting for a train, or anywhere that doesn’t include a trip to the retailer.
People Got a Jump on Their Brick-and-Mortar Shopping
As in the previous year, Black Friday 2015 was the biggest shopping day during the November-December period, grabbing 3.6 percent of all in-store sales. Black Friday was not as dominant as in 2014, when it scored 4.2 percent of sales.
Following Black Friday, shoppers did the majority of their in-store retail therapy the two Saturdays before Christmas: December 12 (2.7 percent) and December 19 (2.7 percent).
A big differentiator between the 2014 and 2015 retail holiday was that people shopped earlier in stores in 2015, front-ending their holiday spending in November and devoting less of their spending to December. We found 51 percent of brick-and-mortar spend occurred in November 2015, compared to 49 percent in November 2014. And only 19 percent of spend occurred in the 10 days leading up to Christmas, while 21 percent was completed in this period during Holiday 2014.
Due to all the sales and shopping that occurred earlier in the season, Black Friday 2015 did not rack up the same proportion of holiday sales as it did in 2014. Between 2014 and 2015, daily share of spend decreased by 0.7 points on Thanksgiving Day, decreased by 0.6 share points on Black Friday, and decreased by 0.2 share points on Christmas Eve. But the role of Thanksgiving and Black Friday in the grand scheme of the full holiday season varied by industry. Thanksgiving Day was particularly important for the video game and technology industries, with a 13 percent and 8.6 percent share of holiday spend respectively, far greater than other days for these industries. Our Games Industry Analyst Liam Callahan explained how strong Black Friday video game sales set the precedent for the rest of the holiday season:
“Healthy Black Friday and Thanksgiving sales for the video game industry built positive momentum toward PS4 and Xbox One hardware sales through December, as that month marked the highest unit sales for these consoles so far in their lifetime."
People Shopped Either Black Friday or Thanksgiving
More consumers opted to take advantage of big holiday deals on just one of the big retail days in 2015, rather than venturing out to stores on both Thanksgiving and Black Friday. Black Friday was the bigger shopping day of the two, with 43 percent of Thanksgiving/Black Friday shoppers hitting stores (a slight boost from last year). The share of consumers who only shopped on Thanksgiving grew to 18 percent from 14 percent in 2014 – the largest increase of the three segments, despite many stores closing their doors on the holiday.
The share of Thanksgiving/Black Friday shoppers who ventured out on both sales days, however, declined from 46 percent in 2014 to 39 percent in 2015. And the majority of shoppers who did venture out on Thanksgiving or Black Friday visited just one store; fewer shoppers made their outing a multi-store event.
Thanksgiving Day at 6:00 p.m. and Black Friday at 12:00 p.m. once again were the peak spending hours in 2015. However, Thanksgiving Day 2015 did see a sharper decline following the 6:00 p.m. peak than it did in 2014.
People Waited to Make Their Holiday Purchases Online
Shoppers took to the stores for their early holiday shopping and left their last-minute buys to the Interwebs. Online purchase frequency during the 2015 holiday season was consistent with that of 2014, peaking the week before Christmas (December 13 – 19) at 3 purchases per shopper per week on average (slightly greater than the 2.9 purchase frequency the same calendar week in 2014). Like 2014, though purchase frequency was greatest the week before Christmas, share of holiday spend peaked the week of November 29, 2015 (at 16.9 percent).
Breaking out spend by day, it is clear the peak in share of online spend the week of November 29 reflects online shoppers doling out the big bucks on Cyber Monday purchases. As you might expect, Cyber Monday was the biggest day of the 2015 holiday season for online spending, capturing 5.3 percent share of online spend from November 1 through December 26. Though shoppers purchased with greater frequency the week before Christmas, they focused their purchases of more expensive items during the big Cyber Monday sales.
The next-biggest day for online spending was Black Friday (4.2 percent share) followed by Thanksgiving (2.9 percent share). Online spending for the 2015 holiday season was fairly consistent with that of Holiday 2014, with a loss of 0.2 share points on Black Friday 2015 and a loss of 0.1 share points on Cyber Monday. Overall, online shoppers spent less in November and more in December. Most notably, there were substantial increases in daily share of online spend from December 20 through December 23—meaning online shoppers waited until the last minute to make their purchases, thanks to rushed, “guaranteed by Christmas” shipping and services like Amazon Prime that offer two-day or same-day delivery.
Shoppers Treated Themselves to More Sustenance
Shoppers spent the greatest share of offline spending on grocery* (26.9 percent), apparel (11.1 percent), foodservice (9.6 percent), technology (6.5 percent), and health and beauty (5.1 percent) from November 1 through December 26, 2015. This ranking is not unlike that of the 2014 holiday season, with one substantial change: motor fuel lost 2.3 share points from 2014 levels, demoting it from number-five to number-six on the list of top holiday industries. The U.S. government projects American households will have saved on average $700 in 2015 on gasoline costs. With gasoline prices at a record-breaking low, other retail industries reaped the rewards of new-found wallet share. Shoppers increased foodservice spend by 0.6 share points and grocery spend* by 2.6 share points (*note this excludes spend at pure play grocery and drug stores).
Our Food and Beverage Industry Analyst Darren Seifer provided context for these food industry trends, explaining the increase in foodservice share was driven primarily by older consumers who have been dining out more, while younger consumers are sourcing more meals from the home.
Bonnie Riggs, our restaurant industry analyst, explained in the foodservice industry, consumers’ growing need for convenience on weekdays led them to purchase more quick-service, restaurant-prepared meals while away from home, with growth highest in the morning meal segment.
Apparel, Tech, and Gift Cards Lost Share
Several industries that typically perform well throughout the holiday season saw share declines when comparing 2015 to 2014 spending levels. Though technology remained at the top of list for holiday sales, the industry saw a 0.4 share point decline from 2014 holiday spending levels, with a drop in average spend per buyer of $7.90 for the November 1 – December 26, 2015 time period.
Though the apparel industry remained the second-largest industry in terms of holiday spend, it also saw a decrease in share of spend from 2014 holiday spending levels—albeit only by 0.2 share points. Footwear and accessories also experienced decreases in spending share, by 0.3 and 0.5 share points respectively. Chief Industry Analyst Marshal Cohen attributed these drops in spend to early and frequent discounting:
“Holiday 2015 was tricky for retailers, and even more so for those selling fashion at holiday time. With discounts starting earlier and more frequently, consumers shopped just as often as last year for fashion, but spent less. This means retailers needed to sell more to make the same dollars as last year. But just because retailers promoted earlier didn't mean consumers bought more—they just paid less. Early promotions don't translate to more people on your gift list.”
Even gift cards, which are typically popular as holiday gifts, lost 0.3 share points.
What Was Hot in . . .
Despite the technology industry’s holiday share loss in 2015, it’s still a favorite among holiday shoppers nationwide who race to get their hands on the latest gadgets at competitive prices. So what were the top-selling product categories in stores from November 1 through December 26, 2015? Every year our Consumer Electronics Industry Analyst Stephen Baker publishes his top 12 consumer tech holiday predictions, and it turns out he was pretty much on point. LCD screens led the pack with 30.1 percent share, followed by notebook computers (19.1 percent), tablets (16.8 percent), stereo headphones (7.2 percent), and digital fitness devices (5.2 percent).
Over the two days of Thanksgiving and Black Friday, LCD screens grabbed an even larger share of spend (32.6 percent), as did digital fitness devices (6.4 percent).
Best Buy, Walmart, Target, Costco, and Sam’s Club were among the top brick-and-mortar tech retailers of the 2015 holiday season.
Tops (otherwise known as shirts) made up the greatest share of apparel spend during Holiday 2015 (37.7 percent), followed by bottoms (pants/skirts) at 16.8 percent, activewear bottoms at 8.2 percent, outerwear at 7.4 percent, and sleepwear at 5.6 percent. Knit shirts were the biggest sellers with 21.2 percent total apparel share.
Leading holiday apparel retailers included Walmart, Target, JCPenney, Kohl’s, and Macy’s.
One striking observation was the spike in tailored clothing’s share of apparel spend on Christmas Day 2015 to 62.3 percent—a massive hike from its modest 1.3 percent share from November 1 through December 26, 2015. It turns out Men’s Warehouse was one of the few apparel stores open on Christmas Day (and it was having a sale), grabbing more than three quarters of Christmas Day purchase share. This was a massive increase from its season-long share, typically under one percent. On a day when so few purchases were made (Christmas sales were 97.4 percent lower than average daily sales throughout the holiday season), the fact that Men’s Wearhouse drew so many shoppers to stores is noteworthy.
Throughout November and December 2015, 38.7 percent of foodservice dollars were spent on main dishes and entrées, 23.2 percent on burgers and sandwiches, 17 percent on beverages, 7 percent on side dishes and appetizers, and 6.4 percent on breakfast foods.
Several top foodservice operators like McDonald’s, Chick-Fil-A, Dunkin Donuts, and Starbucks increased share during the holiday season as compared to the rest of the calendar year.
Daily foodservice category purchases were fairly consistent throughout the 2015 holiday season, except on Thanksgiving and Christmas Day. Categories like entrées and sandwiches lost share to breakfast foods and beverages during these national feasting days: breakfast foods increased share of foodservice spend to 12.4 percent on Thanksgiving and 14.2 percent on Christmas, and beverages increased share to 23.9 percent on both Thanksgiving and Christmas Day. This is thanks in part to coffee sales, which made up the bulk of beverage spend (40 percent and 48 percent on Thanksgiving and Christmas respectively), compared to its share of 30 percent throughout the full holiday season. This may come as no surprise, though, since Americans eat more full meals at home and with friends and family on these days. Pressed for time, on the road, or simply looking to find some inner strength for that conversation with Aunt Kathy, they opted for fast and convenient options for breakfast and coffee.
One of our Checkout Tracking solution’s greatest advantages is its ability to show you where your shoppers buy when they’re not with you. So we had some fun seeing where tech, apparel, and coffee shoppers overlapped. Here are some Holiday 2015 insights:
- People who bought LCD screens in Holiday 2015 over-indexed in apparel purchases at Academy Sports, Belk, Sam’s Club, Dick’s Sporting Goods, Costco, Kmart, and Aeropostale. They under-indexed at H&M and Meijer.
- People who purchased knit shirts this holiday were more likely to make their technology purchases at Walmart and Target and less likely to make them at Staples, AT&T, and the Apple Store.
- Specialty coffee drink buyers over-indexed in apparel purchase at Banana Republic, Forever 21, H&M, Gap, Nordstrom, Express, Marshalls, and Old Navy. They under-indexed at Sam’s Club, Academy Sports, Walmart, Kmart, and Belk.
- Specialty coffee drink buyers were more likely to make their tech purchases at Micro Center, Michael’s, and Target. They were less likely to do so at Office Depot, Walmart, BJ’s, and Dollar General.
All in all, America enjoyed a successful 2015 retail holiday. Consumers bought more, took advantage of promotions earlier, and braved the big sales days with greater gusto than they did in 2014. But when you dive deep into purchase timing, category-level spending, top brands, channels, and more, it’s clear the story wasn’t so simple. Now that we’ve thrown enough Holiday 2015 data and insights at you to satiate your craving for the next year, it’s time to start thinking about and prepping for Holiday 2016!