While retailer and consumer spending expectations denote the importance of the holiday shopping season, a divide exists between the two regarding when the season actually commences. According to JLL’s annual Holiday Forecast, the vast majority of consumers, more than two-thirds, believe the season starts after Thanksgiving, while little more than one-third of retailers agree. A majority of retailers JLL surveyed (45 percent) believe the season starts post the ghosts and goblins of Halloween. But, whether the season lasts seven weeks or just four, JLL predicts consumers to spend more on their holiday gifts than ever before—a solid four percent hike in 2016 compared with 2015.
Whether consumers plan to shop pre- or post- their Thanksgiving meal, they still plan to spend, with just over one-third planning to spend more than $750 on holiday gifts this year. For most retailers the season 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 holiday season. Additionally, more than half of retailers expect to generate up to 20 percent of their total holiday sales over the Thanksgiving/Black Friday weekend.
“There is a very interesting debate when it comes to opening on Thanksgiving this year,” said Greg Maloney, CEO, JLL Retail. “According to our survey of 300 retailers, more than 50 percent indicated they will be closed on the holiday, which I believe can be attributed to the mounting evidence that Thanksgiving openings have largely diluted Black Friday sales rather than bolstering them.”
Much Ado about Traffic
This year, 77 percent of retailers in JLL’s survey believe that shopper traffic will stay the same or increase compared with last year. To help drive shoppers through their doors this season, retailers will focus on digital promotions and integrations, with 60 percent of retailers surveyed offering discounts via email or text message, 29 percent offering online ordering and in-store pick-up, and nearly 20 percent providing free home delivery. Interestingly, almost two-thirds of retailers indicated that they plan to have the same promotions available both in-store and online.
“The integration of physical and online channels has really started to take shape and the necessity for brick-and-mortar space has become even more evident,” added James Cook, Director of Retail Research, JLL. “It makes sense that retailers are beginning to look at their channels as one cohesive system as opposed to separate entities. In many ways, mobile and e-commerce are now serving as the gateway to the physical store driving shoppers in to buy, return or pick-up online orders. Offering similar promotions allows consumers to have a seamless shopping experience.”
Retailers this year are also adding more experiences into their in-store plans with nearly one-fifth saying they will have some form of entertainment, including Santa or live music. One retailer will bring in authors for a book reading and another will provide makeup tutorials.
Millennials, Gen Xers, and Boomers…Oh My!
JLL’s survey showed a generational divide when it comes to holiday shopping budgets, destinations and influences, with Millennials and Gen Xers on one side and Boomers and over 70’s on the other. The younger generations showed a preference for discount department stores (e.g. Target) while older consumers’ preferred traditional department stores (e.g. JC Penney).
Younger shoppers were more influenced by price, with both Millennial and Gen X shoppers selecting it as their first choice in terms of what drove them to select one store over another. For the older generations, quality was the most important factor with both groups (Boomers and over 70’s) choosing it as their number one priority when it comes to store selection.
Not surprisingly, younger generations are budgeting less for their holiday spending this year. Millennials are the lowest, with 30 percent expecting to spend $250 or less. Boomers will spend the most, with more than half (54%) expecting to buy more than $750 worth of holiday gifts.
JLL surveyed 2,800 shoppers of 31 shopping centers in September 2016. JLL surveyed 300 retail tenants in shopping centers in 17 states in September and October of 2016. More than 70 percent of respondents were inline retail locations and 16 percent were anchor or junior anchor tenants.