Retail’s Evolving Holiday Season
This white paper looks at the evolution of the holiday retail season in recent years and uses foot traffic data to analyze specific shopping milestones across key retail sectors.
By:
on
November 22, 2022
With the holidays just around the corner, Americans are getting back into the seasonal shopping groove. After two years spent under the cloud of COVID, many people are eagerly anticipating a return to relative normalcy, replete with travel plans, family gatherings, festive gift hunting expeditions, and joyous meals in the company of loved ones. And while inflation may hold some shoppers back this season, rising prices may drive others to take full advantage of in-store bargains and other holiday promotions.
This white paper dives into the data to identify the key trends that are likely to shape brick-and-mortar holiday shopping this year. Is last year’s extended retail season here to stay? If so – where does that leave Black Friday? Which categories continue to benefit most from post-Thanksgiving deal-seaking, and which can expect an influx of visits during the pre-Christmas rush? What can retailers do to maximize their gains during these critical weeks? The report utilizes foot traffic analytics to provide data-driven answers to these questions.
While inflation may hold some shoppers back this season, rising prices may drive others to take full advantage of in-store bargains and other holiday promotions.
The past few years have been a tumultuous time for retailers, leading to major shifts in holiday shopping patterns. And a look at recent weekly fourth-quarter visit trends shows that a version of the extended holiday shopping season first observed in 2020 may be here to stay – although not with the same magnitude as in 2021.
In 2019, the season still followed a more traditional trajectory, with retail visits remaining relatively constant throughout October and November and spiking dramatically during Black Friday. But consumer behavior began to change in 2020, as COVID and global shutdowns led many shoppers to stay home and avoid crowded stores, which drove some retail foot traffic to earlier in the season.
But even though shopping was more spread out in 2020, the full impact of the extended holiday season did not manifest until 2021. While the pandemic remained a significant concern last year – with the first confirmed Omicron variant case hitting the U.S. right after Thanksgiving – pent up demand and easing restrictions fueled a clear recovery pattern. At the same time, serious supply-chain disruptions gave rise to product shortages throughout the country, leading many retailers to encourage consumers to get an early start on their shopping. The combination of pent-up demand and inventory concerns pushed significant retail foot traffic into October and early November at the expense of Black Friday 2021 performance.
Now, as COVID recedes into the background, many people are more excited than ever to return to their pre-pandemic holiday routines. While online shopping has its draw, there is something both invigorating and comforting about hitting the stores when they are crowded with other shoppers exuding holiday cheer.
As COVID recedes into the background, many people are more excited than ever to return to their pre-pandemic holiday routines.
Still, the 2022 holiday season faces challenges of its own, with consumers ranking high prices and budgetary constraints as one of their leading concerns. And despite reports that inflation has begun to cool off more than expected, the consumer price index remains up 7.7% for the year ending this October. At the same time, many retailers have begun offering steep pre-Black Friday discounts, in an effort to quickly move excess inventory, which is driving some shoppers to visit stores earlier in the year – though not to the same extent as in 2021.
Against this backdrop, the 2022 season appears to be following a less pronounced version of the trajectory seen in 2021, with retail visits beginning to slowly pick up steam well before Thanksgiving. If this trend continues, retailers can expect a gradual build-up, leading up to a Black Friday peak that may be higher than last year’s, but more muted than it was in 2019. But Black Friday 2022 may also surprise, as value-driven shoppers turn up in search of door-buster deals. The challenge for stores will be to preserve the sense of urgency and convince consumers that their Black Friday promotions are worth braving the crowds – without allowing the drawn out shopping period to dampen momentum.
While most retailers are busier during the holiday season, the magnitude of the holiday bump varies significantly across sectors. A glance at several industries that have consistently outperformed the wider retail sector over the past few years shows how holiday seasonality impacts different categories.
Some sectors, such as superstores, discount & dollar Stores – which offer a wide variety of essential, year-round products – rely less on the holidays to supplement performance the rest of the year. Clothing, including off-price, also draws bargain-hunters year round, which leads to a smaller Q4 boost. And perhaps unsurprisingly, hobbies, gifts, & crafts – a clearly discretionary category with many holiday-related offerings – draws in its biggest crowds during the festive season.
More significant, however, is the dramatic increase experienced by department stores and the electronics segment, which saw visits go up in Q4 2021, respectively, 36.3% and 30.6%. So even as department stores and electronics brands evolve their brick-and-mortar channels and experiment with new store formats to remain relevant throughout the year, the traditional full-size stores remain top destinations for holiday shoppers.
In Q4, Department stores and electronics retailers consistently outperform the wider retail sector, revealing the different impact of holiday seasonality across categories.
While overall seasonal trends offer important insights, a deeper understanding of the dynamics surrounding specific shopping milestones is crucial to making data-based decisions. The next part of the white paper utilizes foot traffic analytics from last year to explore Q4 shopping milestones and see how the different retail segments can best maximize their holiday potential.
The first major retail milestone of the holiday season is Turkey Wednesday – the Black Friday of the grocery sector – when millions of people flock to chains across the country to buy last-minute supplies for Thanksgiving dinner.
While some have argued that grocers are busiest on the Tuesday before the holiday, foot traffic data suggests that it is in fact the Wednesday before Thanksgiving that draws the biggest crowds. In 2018, grocery stores across the country experienced 75.4% more foot traffic on Turkey Wednesday than they did on the average day in November, a number that grew to 80.7% by 2019. Even in 2020 – when COVID rained on many people’s Thanksgiving plans – stores saw visits increase by 70.2% on the day before the holiday. In 2021, that figure bounced back ever higher to 81.6%.
Even in 2020 – when COVID rained on many people’s Thanksgiving plans – stores saw visits increase by 70.2% on the day before the holiday.
With that context in mind, it is safe to predict that grocery visits on Turkey Wednesday will almost certainly outperform the rest of November this year. But how big will it be? On the one hand, grocery prices have been heavily impacted by inflation, and grocery visits are still coming down from their pandemic peaks, which could hamper Turkey Wednesday grocery performance this year.
But this year will also be the first (almost) COVID-free Thanksgiving in three years, so many are planning on traveling to spend the holiday with friends and family – and eager hosts are likely to make every effort to cook a particularly festive dinner. And weekly year-over-three year (Yo3Y) visits have trended up in recent weeks, indicating that some consumers have made peace with the higher food price – and that grocers have a lot to look forward to for Turkey Wednesday 2022.
Although the holiday season drives increased visits to the grocery sector as a whole, not all kinds of grocery stores experience the holiday peaks in the same way. While some grocery categories are better positioned to maximize overall traffic during the fourth quarter of the year, others benefit more specifically from the pre-Thanksgiving scramble.
Some grocery categories are better positioned to maximize overall Q4 traffic, while others benefit more specifically from the pre-Thanksgiving scramble.
Traditional supermarkets, including national brands like Albertsons and regional chains like Winn Dixie, are particularly prone to Turkey Wednesday spikes. As prime destinations for consumers preparing to cook up a storm, they saw around 80% to 120% more visits on the day before Thanksgiving 2021 than they did, on average, during the first three quarters of the year. Other store formats, including specialty chains like H Mart and Patel Brothers and limited assortment grocers like Aldi and Trader Joe’s, saw more modest Turkey Wednesday increases, ranging from about 20% to 60%.
Big box stores like Target and Walmart – which carry groceries as one offering among many – saw lower peaks on Turkey Wednesday, but significantly higher daily averages throughout Q4 2021, as consumers shopped for gifts, decorations, and other seasonal products. Highly discounted food warehouses, for their part, enjoyed a double whammy of increased visits: significant peaks on Turkey Wednesday, coupled with fourth-quarter daily averages considerably exceeding daily visits for the rest of the year. Shoppers likely flock to these stores during the holidays, both for their cheaper prices and their ability to accommodate large crowds.
The next major retail milestone following Turkey Wednesday is Black Friday. In the past, the day after Thanksgiving traditionally kicked off the holiday shopping season, with masses of shoppers converging on stores throughout the country in search of exceptional bargains. For the past few years, however – and most notably since 2021 – retailers have begun offering Black Friday specials earlier and earlier, extending the holiday retail cheer as far back as October.
While this shift has had some dampening effect on Black Friday’s prominence – especially in 2021 – the day after Thanksgiving retains its unique draw, attracting major visit increases across categories. And while early shopping may portend a more muted Black Friday peak, foot traffic on the big day could also exceed last year’s levels, as economic headwinds drive budget-conscious shoppers to wait for deeper discounts.
Black Friday retains its unique draw, attracting major visit spikes across categories.
Comparing retail visits on Black Friday 2021 (Nov. 26) to fourth quarter daily averages for various categories shows that despite the extended holiday season, Black Friday is still driving significantly increased foot traffic. And for two sectors in particular – electronics and department stores – the popular retail holiday stands out as an especially spectacular shopping day.
While specialty clothing stores (including off-price retailers) experienced 115.3% more visits on the day after Thanksgiving, department store visits more than tripled. Macy’s, for example, experienced 278.7% more visits on Black Friday 2021 than it did, on average, during the fourth quarter of the year. And electronics stores saw the highest peak of all, with foot traffic exceeding four times their daily Q4 average. Specifically, location analytics reveal that Best Buy is the clear Black Friday champion, attracting nearly five times more visits on the popular retail holiday than its daily average for the fourth quarter of the year.
Superstores such as Walmart and off-price apparel retailers such as Burlington, on the other hand, attract budget-conscious shoppers all year round – so these segments appear to be less prone to seasonal spikes. While both sectors still receive a Black Friday boost, foot traffic data indicates that Black Friday consumers are particularly eager to maximize limited-time deals at non-discount retailers.
On Black Friday, people also spend more time in-store than they usually do. Comparing median dwell times at several popular Black Friday destinations to fourth quarter averages for the same stores shows that visit durations are higher across the board.
Given the crowds that mob popular chains on the shopping holiday, it’s not surprising that it takes people longer to find what they need and check out. But here too, patterns vary across categories, with department stores – prime destinations for serious browsing – experiencing the biggest increases. At Macy’s, customers spent an average of 33.3% more time in-store on Black Friday than they did the rest of the quarter, and at Kohl’s, median visit times increased by an impressive 31.4%. Meanwhile, at chains like Best Buy, where customers usually know exactly what they’re looking for, median dwell times only increased by 13.8%.
Department stores – prime destinations for serious browsing – experienced the biggest Black Friday increase in median dwell time.
Some of that increased dwell time is likely spent standing in line – yet another indication that consumers are often willing to discount the various inconveniences of offline shopping when the expected reward is large enough. Still, time waiting in line does not have to be time wasted – retailers can use the longer visit durations to maximize purchasing potential by promoting membership programs, offering special promotions, or creating spontaneous buying opportunities. Companies can also focus on enhancing customer experience by making the wait more enjoyable to create positive brand engagement and build loyalty for the rest of the year.
Turkey Wednesday marks the yearly peak for grocery visits and Black Friday remains the most popular day for most segments – specifically department stores and electronics retailers. But last-minute panic shoppers also drive an additional frenzied peak in the days and weeks leading up to Christmas – and for many shopping centers, the pre-Christmas peak is even more significant than the post-Thanksgiving bump.
In 2021, the week beginning December 13th saw the greatest increase in shopping center visits nationwide, with 23.7% more foot traffic than the average fourth-quarter week. On Black Friday week, in contrast, visits to malls jumped by just 15.8%.
But drilling down into the data for different kinds of shopping centers shows that the trends vary quite a bit across sub-categories. Outlet malls – which cater specifically to consumers that prioritize price and are willing to make the extra effort to find significant mark-downs – get their biggest jump during the week of Black Friday. Other shopping centers, however – including both indoor malls and open-air lifestyle centers – are busiest right before Christmas, when procrastinators seek out the most convenient locations to easily find a wide variety of merchandise.
Outlet malls get their biggest jump during the week of Black Friday, while indoor malls and open-air lifestyle centers are busiest right before Christmas.
With gas prices higher than they were last year, some consumers may be reluctant to make the trip to outlet malls. Still, fuel costs have come down significantly since the summer, and it remains to be seen how consumers will balance the special draw of outlet discounts with the increased costs of getting there. Malls, for their part, will likely continue to get a last minute boost, as shoppers fill gaps in their gift buying efforts.
This white paper utilized foot traffic analytics to identify the key retail trends likely to shape this holiday season. After two years dominated by COVID, this year’s shopping patterns will likely be shaped by a combination of consumers’ eagerness to return to beloved routines, and a need to cut costs in the face of inflation. With an extended shopping season already underway, the data offers retailers plenty of room for optimism.
The extended holiday shopping season may be here to stay. While early holiday shopping hasn’t reached the levels seen last year, visits have begun trending up well before the expected post-Thanksgiving spike. This shift – which may portend a new post-pandemic normal – will be one to watch in coming years.
Different retail sectors experience the holiday peaks in different ways. Retailers in general enjoy a significant visit bump during the fourth quarter of the year. For department stores, outlet malls, and especially electronics stores, Black Friday remains the clear focal point. For other sectors, like indoor malls and open-air lifestyle centers, the pre-Christmas period is more significant. For Superstores, which attract budget-conscious consumers year round, the holiday shopping cheer is distributed more evenly, with less pronounced bumps throughout the quarter.
Turkey Wednesday is the Black Friday of the grocery sector. This is particularly true for traditional supermarkets and discount warehouses, which see the largest visit spikes on the day before Thanksgiving. And thanks to rising year-over-three-year visits, this year’s Turkey Wednesday is shaping up to be a good one.
Black Friday isn’t going anywhere. Although the Black Friday peak has diminished somewhat in recent years as holiday shopping kicks off ever earlier, the day retains its stand-out status as the decisive retail event of the year. Foot traffic trends also indicate that Black Friday retail visits will likely outperform 2021 levels as bargain-hunting consumers feel ready to brave the crowds.
On Black Friday, customers spend more time in stores – especially in browsing destinations like department stores. Retailers should find ways to leverage this longer in-store time to both enhance the consumer experience and maximize purchasing potential.
The pre-Christmas shopping frenzy may be more important than Black Friday for some shopping centers. Although outlet malls get their biggest jump during the week of Black Friday, other shopping centers are busiest right before Christmas as procrastinators seek out the most convenient locations to easily find a wide variety of merchandise.
