Retail sales increased 8.3% and e-commerce sales increased 66.5% during the week of Oct. 11, according to Mastercard SpendingPulse data released Oct. 28.
Although Prime Day wasn’t specifically mentioned as the driver of the growth, the annual Amazon promotion was held Oct. 13-14 and other notable retailers responded with promotions of their own as has been the case in prior years when Amazon scheduled the event in July. As result of “major cyber promotions,” the holiday shopping season is well underway, according to Mastercard SpendingPulse, a retail sales measurement tool that provides an accurate look at sales by aggregating sales activity in the Mastercard payments network and combining it with estimates for other payment forms such as cash and check.
Given the strong start in October, Mastercard SpendingPulse is forecasting U.S. retail sales to grow 2.4% excluding automotive and gas, from Oct. 11 through Dec. 24, compared to the same time period last year.
“This year may look different than years past, but I’m optimistic as the sales outlook is far better than economists might have expected earlier in the year. To put it in perspective, the 2008 recession saw holiday season declines of -3.5%, so this could be a happy holidays indeed,” said Steve Sadove, a senior advisor for Mastercard and the former CEO and chairman of Saks Inc.
Here are some of Mastercard’s other retail insights and holiday predictions.
- Online, anytime points to record e-commerce highs: Online sales growth has fueled retail through the pandemic. With social distancing measures in place and health concerns running high, e-commerce’s share of overall retail sales is expected to jump from approximately 14% in 2019 to more than 20% in 2020.
- ‘Tis the season—earlier than ever: Online deals started in October with major e-commerce promotions serving as important milestones. We can expect this to continue into November with Singles Day in China and extending through the season.
- Shopping local, shopping small. With mobility impacted by the pandemic, and many consumers still working remotely and children attending school virtually or on a limited in-person basis, many consumers turned to their neighborhood stores and suppliers. This shrinking “retail radius” is also contributing to the shift to e-commerce.
- Travelers remain grounded: With international travel restricted, many families will be staying home—or traveling locally this holiday season. This will have a ripple effect, impacting larger cities as well as the luxury stores and hospitality companies that cater to overseas tourists.
- Reimagining brick and mortar stores—with a focus on the omnichannel experience: Caution and convenience remain top of mind for many consumers, and retailers are responding accordingly. Buy online, pick up in store as well as technologies like contactless will remain important as retailers establish innovative ways to allow this type of low-contact experience.