Retail
How Holiday Spending Compares Around the World
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How Holiday Spending Compares Around the World
View the high-resolution of the infographic by clicking here.
While COVID-19 has triggered a tsunami of challenges for retailers the world over, they can take solace in knowing that retail events throughout the year can contribute to an uptick in sales.
But consumer spending for events like Back to School, Halloween, or Easter pales in comparison to what people spend between Thanksgiving and New Years—otherwise known as “the holidays”.
The graphic above explores holiday spending across the world, as well as some of the major events that contribute to it, based on MoEngage and AppFollow’s Holiday Marketing Guide.
Retail Events by Region
While Christmas is celebrated in some form across most parts of the world, U.S. consumers spend more than any other nation, with retailers raking in an estimated $1 trillion in sales in 2019.
As another major retail holiday, Black Friday originated in the U.S. but has since become a global phenomenon. In 2019, sales for the one day event reached a staggering $7.4 billion in the U.S. alone, but it was surpassed by Cyber Monday, which garnered a total of $9.4 billion in sales.
Over in India, holiday season spending in 2019 reached a total of $46 billion due to a number of events such as Amazon’s Great Indian Festival. Orders were placed during the event from over 99% of India’s postal codes, and on the busiest day, more than 600 flights delivered Amazon orders to customers.
In other parts of Asia, Alibaba’s Singles’ Day is quickly becoming a highly anticipated event attracting attention from consumers in other parts of the world. But while it recorded $38 billion in revenue in 2019, it was meager in comparison to Chinese New Year sales during the same year, which topped $149 billion—although it does not take place during the holiday months covered in this graphic.
2020 Trends Impacting Retailers
Despite many retailers banking on the success of these holiday events, they are up against some critical challenges due to the ongoing COVID-19 pandemic.
Economic Uncertainty
According to the report, consumers have become more cautious about their spending, due to economic uncertainty of their finances. In fact, personal savings rates in the U.S. reached a historic 33% in May of this year.
More Value-Conscious Buyers
It’s no surprise that consumers’ concerns about the economy and their job prospects are affecting how they spend their hard-earned cash. They are spending less on items that may be considered a luxury, and investing more on things that can add value to their lives day-to-day, like media and entertainment.
Reluctance to Shop In-Store
Tightening lockdown restrictions and social distancing have raised some questions around how much of a role brick and mortar stores will play this year for consumers. Interestingly, a study shows that 36% of shoppers now prefer shopping online, up from 28% before the pandemic.
Supply Chain Issues
COVID-19 has wreaked havoc on retail supply chains, resulting in a number of issues arising such as labor shortages and transport restrictions. This has put many retailers under tremendous pressure to reimagine how they can best serve their customers.
The Most Wonderful Time of the Year?
Holiday shopping in 2020 will be anything but typical. Businesses of all shapes and sizes are having to adjust to changing consumer behaviors to ensure they make it through to 2021 intact.
With tightening restrictions across the world, brick and mortar stores are becoming less of an option for millions of people, challenging retailers to focus efforts on their online experience.
Forrester predicts that total retail sales in North America will decline in 2020 overall, while online sales will increase by 18.5%—growth not seen since 2008.
Whether the reimagined supply chains of 2020 can keep up with more online demand is another question.
Retail
Visualized: 10 Black Friday Retail Trends
Consumers are expecting more this Black Friday, but for retailers, the pressure is mounting. Here are 10 trends that may impact them in 2023.
10 Black Friday Retail Trends
This year, retailers are under major pressure to orchestrate even more substantial and enticing Black Friday discounts for their customers.
We partnered up with Airwallex to visualize the latest available data from 2022 to understand what this year’s holiday weekend could look like for retailers.
Consumer Loyalty and Price
Theme: Buyer Behaviour
In a 2022 U.S. study conducted by Emarsys, 58% of people claim they are more loyal to retailers that offer them discounts, incentives, and rewards, indicating that price plays a crucial role in fostering loyalty.
Moreover, 60% of respondents admitted to turning their back on the brands they were previously loyal to in an effort to save money amid inflation hikes.
Convenience is King
Theme: Buyer Behaviour
Salesforce notes that 2022 saw a global increase of 9% in Buy Online, Pick Up In Store (BOPIS) adoption during Cyber Week compared to early November data.
Specifically in the U.S., retailers offering BOPIS experienced 38% higher growth in online revenue during Cyber Week compared to those without this service.
Global Spending is Up
Theme: Spending Patterns
Globally, 2022 Cyber Week spending increased 2% YoY to $281 billion. This is despite some regions experiencing a decline and some retailers reporting lighter foot traffic.
Margins at Risk
Theme: Spending Patterns
While consumers are spending more, retailers are still seeing their margins squeezed due to a variety of factors such as high inflation, high cost of goods, strained systems, and increased demand for discounts.
That is why we are starting to see certain retailers choosing to “boycott” Black Friday, and although estimates vary, The Guardian reported that as many as 85% of smaller retailers were not participating in Black Friday in 2021.
The Smartphone Surge
Theme: Buyer Behaviour
According to Adobe, 47% of U.S. online sales came from smartphones during the 2022 holiday spending season—up from 43% in 2021.
This reflects a broader trend within the retail sector, aligning with projections for substantial growth in the global mobile commerce market.
Deeper Discounts
Theme: Spending Patterns
In another benefit to consumers, discounts are getting deeper. Throughout the 2022 holiday season, the average discount stood at 21% compared to 19% in 2021 with apparel, skincare, and beauty touting the deepest discounts.
Alternative Payment Options
Theme: Payments
When it comes to payment methods, alternatives such as Buy Now Pay Later (BNPL) are gaining traction, as evidenced by a 5% increase in orders YoY.
Financing Lower-Priced Goods
Theme: Payments
Despite the success of Buy Now Pay Later, the average order value decreased 5% YoY, meaning consumers are using the payment method more, but to help finance lower-priced goods.
Sales Spikes in APAC + Europe
Theme: Payments
Even though Black Friday has been traditionally viewed as an American retail phenomenon, it has transcended its U.S. origins and has been embraced by consumers the world over.
Several countries witness significant spikes in online sales in 2022, most notably in Australia with a +239% sales spike, and Spain at +576% spike when compared to average October sales.
Retailers Hit with Hidden Fees
Theme: Payments
Did you know that merchants of all shapes and sizes can often find it hard to escape paying unnecessary transaction fees during the holiday season?
For context, every international dollar a retailer generates during the holiday period could be converted up to three times, costing them up to 5.5% of every transaction.
Considering the multitude of benefits afforded to consumers during Black Friday and the holiday season, the question that looms is: is this retail bonanza genuinely worthwhile for retailers?
By partnering with Airwallex, retailers can simplify global payments, but also capitalise on increased consumer spending—without sacrificing on profit.
Learn more about Airwallex now.
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