Hold on to your wallets, this holiday shopping season is shaping up to be one for the books. JLL Research predicts consumers will spend more on their holiday gifts than ever before—a solid four percent hike in 2016 compared with 2015.
Black Friday boost
For a boots-on-the-ground perspective on Black Friday, the season’s first official shopping frenzy, we checked in with JLL’s Scott Michaelis, general manager of Rosedale Center in the Twin Cities. More than 80 retailers opted to open at 6pm on Thanksgiving, he tells us, and Thursday traffic was up 30-plus percent. Sales from key retailers surveyed were slightly up compared with 2015 with self-gifting, small gifts and sale apparel leading the way.
“We see local factors ripe for successful sales with expected gains of three to four percent over 2015. The local economy is good and unemployment rates are low, both indicators of a strong season,” Scott says.
On Black Friday, shoppers came later but stayed longer. Parking lots were more than 90 percent parked for nine hours compared with five the previous year, Scott says. Retailers were split on the timing of deals, with some only offering steep discounts until noon and others offering store-wide discounts all day.
In all, total traffic for the four-day weekend was up 10 percent, according to Scott. Discounts weren’t as steep as 2015, but retailers were very pleased with total spending.
Scott’s marketing team participated in the JLL-wide #LetsGoShopping campaign, surprising shoppers waiting in line to check out with $100 mall gift cards. The social media component of the campaign also offered shoppers a chance to win $250 gift cards.
Talkin’ ‘bout my generation
Just over one-third of consumers plan to spend more than $750 on holiday gifts this year, but that doesn’t mean they agree on where to shop.
Discount department stores like Target were millennials and Gen Xers No. 1 choice to shop for holiday gifts. They are most influenced by price, selecting it as their top choice in what drives them to pick one store over another. Millennials have the lowest spending budgets, with 30 percent expecting to spend $250 or less.
Boomers and those over 70 say their favorite place to shop for holiday gifts is traditional department stores like J.C. Penney. These groups prioritize quality when selecting a store. Boomers will spend the most this holiday season, with more than half expecting to buy $750-plus of holiday gifts.
What have you done for me lately?
While most retailers expect holiday shopper traffic to stay the same or increase they are ramping up on perks to gain market share. Check out retailers’ top offers—from virtual discounts to same-day delivery—above. Almost two-thirds of retailers plan to have the same promotions available both in-store and online, and in-store experiences and entertainment are on the rise at 18 percent.
The bottom line
For most retailers, this is still a make-or-break time of year, as nearly half expect to make between 11 and 30 percent of their annual revenue this season. As the holidays approach, we will be diving into the magic of shopping, from the appeal of flagships to the unique perspectives on our JLL Retail team. See you next week!