The standard holiday season is ‘meaningless’ this year, AlixPartners says

Noble Horvath

Dive Brief: Consulting firm AlixPartners added October for the first time to its holiday shopping forecasts and said that the holiday season, as commonly defined by other organizations and firms, is “meaningless” this year. AlixPartners estimates sales for October through December will grow 1% to 2.6% from last year’s sales […]

Dive Brief:

  • Consulting firm AlixPartners added October for the first time to its holiday shopping forecasts and said that the holiday season, as commonly defined by other organizations and firms, is “meaningless” this year.
  • AlixPartners estimates sales for October through December will grow 1% to 2.6% from last year’s sales of $1.1 trillion.
  • Survey data from the firm shows that 49% of consumers plan to start their holiday shopping by Halloween or earlier, according to an emailed press release.

Dive Insight:

‘Tis the season for sales forecasts, and forecasters are finding ways to make sense of a year that has been scrambled in numerous, complicated ways. 

In adding October to its predictions for holiday spend, AlixPartners cited “the coronavirus pandemic’s dramatic effects on shopping behaviors and long-bubbling retail trends now accelerated by the pandemic.” But, as with many other disruptions related to the pandemic, the virus acted as an accelerant on trends in place well before it began its spread. 

“The traditional November-December holiday-season definition is meaningless this year — and, I would argue, for the future as well,” Joel Bines, who co-heads AlixPartner’s retail practice, said in the release. “For years now, holiday sales have been pulled forward earlier and earlier, thanks mostly to the explosion in online shopping. This, in turn, has led to such things as the diminishment of Black Friday, of door-buster sales and of many other traditions.”

In terms of online spending, AlixPartners found that 45% of surveyed consumers plan for shop online, up 15% from their survey last year. Other observers have issued similarly high expectations for online shopping during the season. Deloitte last week said it expects e-commerce sales to grow 25% to 30% year over year, and survey data from analytics firm Glassbox found that 70% of respondents planned to do the majority of their holiday shopping online, via the web or mobile. 

Meanwhile, spending itself could deteriorate overall, with 23% of consumer expecting to spend less than last year and the number of those planning to spend more dropping, according to AlixPartners data. As for what they plan on buying, at least three-fourths of consumer plan to spend the same or more on apparel, toys, footwear, and electronics and video games as compared to last year. 

Other holiday predictions so far, including from Deloitte and Cowen, have tried to navigate the uncertainty and multiple ways the season could play out. Both of those firms have pointed to how decreased spending on travel and experiences during the pandemic could benefit retail sales. Deloitte described a possible “K-Shaped” recovery during the holidays which produce sales that essentially remain unchanged from the 2019 holidays or grow modestly. While some forces could boost sales, lack of a COVID-19 vaccine or new federal stimulus, among other factors, could weigh down spending.  

Overall, the amount of uncertainty out there is unprecedented,” Alexa Driansky, a senior vice president in AlixPartner’s retail practice, said in the release. She did, though, point to potential upside in catering to high-income consumers and certain sectors, while the winners will likely be those that can quickly shift channels and use data to help “create a seamless and safe customer experience.”

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