NRF Stands By Holiday Forecast, Despite Black Friday, Cyber Monday Dips

Despite a falloff in total shopper numbers from Thanksgiving through Cyber Monday, the National Retail Federation is holding to its Nov. 1-Dec. 31 holiday forecast of 8.5%-10.5% year-on-year growth to $843.4 billion-$859 billion, said CEO Matthew Shay on a Tuesday wrap-up of the five-day holiday period.

Some 179.8 million unique shoppers made in-store and online purchases during the shopping weekend, which topped NRF’s expectations by 21 million but came up short of last year’s 186.4 million shoppers, said the trade group.

Thanksgiving and Black Friday were once “the kickoff to the holiday season,” but COVID-19 changed that in 2020, and supply chain issues altered shopping patterns further in 2021, Shay said. This year, Thanksgiving and Black Friday “are closer to halftime now than the kickoff."

Thanksgiving weekend shoppers spent an average $301.27 on holiday purchases such as clothing (51%); toys (32%); gift cards (28%); books, video games and media (27%); and electronics (24%), said Prosper Insights Executive Vice President-Strategy Phil Rist. That was down from $311.75 in 2020. The biggest spenders, ages 45-54, laid out an average $364, $63 more than the average shopper, he said.

Black Friday was the busiest day for online and in-store shopping, passing Cyber Monday in total online shoppers at 88 million vs. 77 million, Rist said. Small Business Saturday had 51 million in-store shoppers vs. 45.4 million last year. “The new norm is, consumers are starting earlier and spreading out their holiday shopping throughout the season,” he said.

Asked about retail leaders’ sentiment about Thanksgiving weekend numbers, Shay called it “very good,” but added, “I think we probably don’t know yet how to account for the accelerated rate of shopping that took place in the month of October,” and earlier, and how it affected the Black Friday weekend. A positive that retail executives reported was port congestion is “easing a bit,” which Shay attributed to sales that were “pulled forward” into early fall.

Uncertainty due to unusual market conditions continues to skew retailers’ outlooks, Shay said. “We remain in somewhat unfamiliar territory,” he said, citing “noise in the data that won’t become clear for a few months.” Confidence levels among retail executives he has communicated with have been “very high that this is going to be a successful fourth quarter and very successful holiday season.” On the five-day shopping stretch, “we’re going to wait and see how this particular weekend fits into the overall story.”

Retailers had an increase in foot traffic over the five-day period, with nearly 105 million shoppers visiting stores, up from 92.3 million in 2020, said NRF. The number of online shoppers over the span dropped to 127.8 million from 145.4 million last year. Foot traffic numbers reflect a 70% vaccination rate and consumers’ desire to return to pre-pandemic behavior, Shay said.

It's unclear where Thanksgiving Day shopping will go from here, Shay said, noting that a decade or so ago it would have been “unheard of” for stores to be open on the holiday. That changed when Black Friday became more competitive and consumers wanted stores to be open. The pandemic reversed that trend, and “we’ll see how that continues to evolve in future years,” Shay said. Online shopping has made the decision easier for retailers, allowing them to be open for consumers to shop “without having to be physically open.”

On challenges for retailers this holiday season, Shay said labor shortages continue to be a concern. Retailers expect to hire nearly 650,000 workers for the season, up from 485,000 in the 2020 season. Though COVID-19 vaccination rates have increased, the omicron variant is an unknown: “It’s early to know how this is going to work,” Shay said, but retailers will follow protocols they've been practicing since the beginning of the pandemic if omicron becomes widespread.

The pandemic has been a boon for retailers when shoppers focused on goods vs. experiences, Shay noted. Referencing comments made by President Joe Biden Monday, Shay said: “We’re not going to go back down to closures and lockdowns and restrictive behavior in our economy.” NRF will work with the Biden administration to keep the economy moving forward, he said.

Shay referenced measures retailers took with suppliers and partners to ensure “affordability” as their costs rose. More than 80% of 5,759 holiday shoppers in a Nov. 24-29 Prosper Insights survey said the promotional environment was the same as or better than a year ago, reflecting retailers' sourcing and inventory management.

Four in five consumers expect good deals to continue through December, said the survey. Though 84% of consumers had begun shopping before Black Friday weekend, half still had shopping ahead of them. NRF expects consumers to spend $1,000 per household on themselves and their families this year.

Katherine Cullen, NRF senior director-industry and consumer insights, said about 7% fewer people were shopping online Monday than a year ago, when Cyber Monday set a record. “We do expect that to be reflected a little bit in sales,” she said, calling it a positive that the decreased sales were “pretty flat to last year," which had strong growth over 2019

Elsewhere, Adobe said consumers spent $10.7 billion online on Cyber Monday, a 1.4% drop year on year, it emailed Tuesday. There was a Black Friday spending dip of 1.3% to $8.9 billion. Total Cyber Week spending, from Thanksgiving through Monday, also was down 1.4% vs. 2020, though Cyber Monday was the biggest online shopping day of the year, Adobe said. During the peak hour Monday, from 11 p.m. to midnight EST, consumers spent $12 million per minute, it said.

With deals beginning in October, “consumers were not waiting around for discounts on big shopping days like Cyber Monday and Black Friday,” said Taylor Schreiner, director-Adobe Digital Insights. Early shopping was mainly due to awareness of supply chain challenges and product availability, Schreiner said. Online October and November spending put the industry “on track for a season that still will break online shopping records,” he said.

Nov. 1-29, consumers spent $109.8 billion online, up 11.9% from 2020; a record 22 days in the season have topped $3 billion in online spending, Adobe said. It expects the Nov. 1-Dec. 31 period to set a record, growing 10% to $207 billion.

Out-of-stock inventory remains elevated, Adobe said. On Cyber Monday, out-of-stock messages were up 8% from the previous week; for the month, they’re up 258% vs. November 2019. Adobe expects inventory trends to persist through December.

Top-selling CE products Monday included AirPods, Apple Watch and Pencil, laptops, Nintendo Switch, Xbox Series S, Oculus Quest 2 and Samsung and Sony TVs, Adobe said. Electronics discounts averaged 12% vs. 27% last year; TVs were discounted 13% vs. 18% in 2020, it said. Top-selling categories Monday were toys, gift cards, books, video games, baby products and small kitchen appliances, Adobe said.

Shopping cart values were 13.9% higher on Cyber Monday, and up 19% overall during the season, a signal some shoppers are buying bigger ticket items such as furniture; others are feeling the effects of 17 consecutive months of rising e-commerce prices, Adobe said.

The International Council of Shopping Centers, in a Monday wrap-up, said 78% of U.S. adults, about 200 million people, shopped or spent money over Thanksgiving weekend, 61% in a physical store. A survey of 1,013 consumers said the ability to physically see or touch merchandise drove brick-and-mortar visits for more than half of shoppers; 43% had a preference for in-store shopping; and 35% wanted to browse for other gifts. Despite “extensive deals and promotions," 58% of shoppers didn’t buy certain products because of high prices, said ICSC.