Tis the season for retail shopping! With new reports of strong Black Friday through Cyber Monday sales, analysts are predicting that the retail market will hit record numbers throughout the rest of this year's holiday shopping season. We took a closer look at these predictions and some potential future setbacks to evaluate how bedding retailers can make the most during the season of giving.
First, let’s take a look at the numbers:
- MasterCard estimated that overall Black Friday sales totaled $23 billion—up 9% from last year.
- Both MasterCard and eMarketer are projecting that total holiday season sales will increase by nearly 6% over last year.
- eMarketer estimates that, by the start of 2019, total sales could hit more than $1 trillion—this increase in sales would be the biggest year-over-year jump since 2011.
Brick-and-mortar sales accounted for 87.7% of total holiday spending - and even though that is still firmly the majority, its total market share has declined. In fact, e-commerce sales are up by more than 16% this year; they are estimated to make up more than 12% of all holiday retail sales for a total of $123.73 billion. Cyber Monday alone saw a record $7.9 billion in online spending, according to Adobe Analytics. This year also marked the first year that mobile made for more than half of all of online shopping traffic.
So what’s driving these sales numbers? The same things that usually do, it appears. Most analysts are citing low unemployment, strong income growth and high consumer confidence.
But of course, things are not always quite as steady as they seem. While the market looks strong right now - there is still uncertainty on the horizon. Donald Trump’s newly implemented tariffs on Chinese imports are expected to hit the consumer goods market in the coming year, and retail price points will likely experience a hike. On a positive note, this looming threat could potentially be impacting some of the holiday sales increases as consumers look to make the most while they still can. But the retail market should be careful not to expect smooth sailing from here on out.
Forbes Senior Contributor Andria Cheng also pinpointed another troubling detail in the Black Friday sales reports: the over-reliance on promotional pricing. According to a survey by the National Retail Federation and Prosper Insights & Analytics, roughly 65% of purchases during Black Friday weekend were driven by sales and promotions. While this seems less than shocking (deals are what the whole weekend is about, right?), it’s important to note that this percentage jumped from 61% last year—and marks the highest percentage on record.
While the exact reason for this increase is unknown, there are some key factors to consider. This year, retailers started promoting their Black Friday deals earlier than ever - and the sales are lasting longer. According to the NRF survey, 92% of shoppers said they expected the Black Friday deals to extend throughout the holiday season. This could have a lasting effect on the market because, as we discussed in our last eNews edition, a constant cycle of sales promotions can wreak havoc on consumers’ perception of value.
Thankfully, many of these potential worries are far enough down the pipeline that they will not dampen the overall holiday sales numbers. In fact, there remains plenty of opportunity for mattress and bedding retailers to benefit from this strong shopping season.
While mattresses and bedding have traditionally been seen as necessity products, the growing consumer interest in health and wellness has shifted that impression. Today’s sleep products are far from mundane: they can be seen as luxurious and exciting. When it comes to holiday shopping, top-of-bed products make for ideal gifts — especially high-quality pillows or sheet sets (which consumers may not splurge on for themselves). And with more affordably-priced, boxed options on the market, the idea of buying someone a mattress as a gift isn’t as far-fetched as it once was.
Of course, not all end-of-year retail sales are for presents. Apparently, more and more holiday shoppers are treating themselves too. According to the NRF, “self-gifting” increased by 13% this year - with a record of 31% of all consumers buying something for themselves and 44% of Gen Z and millennial shoppers in the 18-24 age range indulging in some self-gifting.
All in all, if the sales numbers are to be any indication, this holiday season is expected to be a major boon for retailers of all kinds—and mattress and bedding sellers shouldn’t miss out.
This article originally appeared in Sleep Retailer eNews on November 29, 2018
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