JLL Forecasts 4.5-5% increase for holiday sales
Thanksgiving Day shopping back in black, average budgets unchanged, 68.7% of survey respondents will shop at a retailer with a physical presence
Chicago, Oct. 24, 2019 – Retailers are already beginning to prepare for the 2019 Holiday shopping season, with consumers close behind them. In fact, roughly one third of consumers indicated that they will start their holiday shopping before Thanksgiving this year – with some consumers indicating they’re already done with their holiday shopping. This year a higher number of shoppers indicated that they’ll start their shopping on Thanksgiving Day – 5.1 percent versus 3.4 percent in 2018. Interestingly, higher income shoppers (those earning over $75,000) will start before Thanksgiving.
“This year we are continuing to see the merging of retail channels with 68.7 percent of responses showing that consumers will shop at a retailer with a physical presence – whether that’s in-store, online, or picking up in-store after an online purchase,” said Greg Maloney, President and CEO of JLL Retail. While JLL is forecasting that sales will increase 4.5-5 percent, I believe that we are likely to be on the high-end of that forecast – baring a substantial setback in the economy. By in large, the average consumer is not going to be overly concerned by trade discussions until they actually manifest in higher prices or slower economic growth. The consumer has continuously buoyed the economy and I don’t expect that to change without some sort of significant setback.
JLL’s 2019 Holiday Shopping Survey found key differences in purchasing patterns among men and women, generations, and income levels.
Consumer Holiday Shopping Plans
Overall consumer budgets remained roughly the same compared to last year with 43.3 percent of consumers indicating that they will spend over $500 on gifts this year – compared to 44.4 percent in 2018. Seniors over the age of 65 planned to spend the most out of the surveyed demographics with 23 percent budgeting more than $1,000 on gifts, in order to make sure they take care of every item on their grandchildren’s wish list. Gen Zers on the other hand budgeted the least with 72.3 percent indicating they planned to spend less than $500.
This year, consumers indicated that the top five retailers where they planned to do their holiday shopping are Amazon (38.1 percent), Walmart (36.2 percent), Target (29.6 percent), Kohl’s (10.1 percent) and Macy’s (8.0 percent). Interestingly, while the top three remained the same across all shoppers, there were some notable differences in the rankings when looking at consumer’s holiday budgets. For example, those with higher budgets (greater than $500) were more likely to include retailers like Macy’s, Best Buy and Nordstrom among their top 10, while those with more modest budgets indicated that they plan to shop at Kohl’s.
Omnichannel Shopping is Essential
Consumers indicated that they planned to use multiple channels to cross all the items off their holiday lists. Interestingly, we found that this year more than half of the shoppers surveyed (52 percent) indicated that they will buy in-store compared to 42.3 percent who indicated that they will buy from an internet only retailer. A little over a quarter of shoppers (25.3 percent) will make a purchase from a physical retailer’s website while 23.5 percent indicated they would order online and pick up in store. This option was particularly popular among Gen Z shoppers as 29.9 percent indicated they would take advantage of buy online, pick up in store or “BOPIS” services. Providing BOPIS services at their stores is a major benefit to retailers as other studies have shown that approximately 85.0 percent of shoppers who stop by a store to pick up a purchase end up buying other products.
“This year has really shown that the trend of omnichannel retailing is here to stay,” said James Cook, Americas Director of Research, JLL Retail. “Convenience is a driving factor and it’s essential for retailers to provide that convenience to consumers by fully blending their channels and optimizing their supply chains in order to provide the best holiday shopping experience for consumers.”
Mobile phones will also play a major role in the shopping experience with many customers becoming more comfortable using their phones in a wide range of retail scenarios. For instance, while fewer shoppers will use their phones for online ordering compared to last year (46.8 percent vs. 50.3 percent), more shoppers indicated they will use their phones for reading product reviews, checking store inventory, and making in-store payments. While men are more likely to use their phones overall, 14.2 percent of women preferred to use their phone to pay in-store. Among the age demographics, 16.5 percent of millennial shoppers planned to use their phone to make mobile payments.
In order to get a more thorough insight into consumer plans and sentiments for the holidays, JLL surveyed 1,000 U.S. consumers online from September 19 – 21, 2019.
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JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of nearly 92,000 as of June 30, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com