THE 2016 HOLIDAY SEASON WILL BE GREEN

TRENDINSIGHTS

2 TRENDS | INSIGHTS

Sales for the 2016 holiday season are expected to be stronger than last year’s. Many

organizations project holiday sales to increase by 3%-4% this year compared to 2015.

Growth will be stronger with e-commerce, especially mobile commerce, which are

expected to experience double digit gains from a year ago. The holiday season is vital

to many retailers, who last season spent over $4 billion in advertising over the last two

months of the year, more than any other product category. Television continues to be the

most important medium for many prominent retail advertisers, and will be again in 2016.

Introduction: For retailers, November and December are the most important months of the

year. The Retail Trade Survey from the U.S. Census Bureau says 20% of annual retail sales

(excluding automotive and food service) occur in those two months. For some retailers, the

holiday season is even more critical, accounting for 30% or more of annual sales. Based on

the forecasts of several prominent industry analysts, retailers are expected to have one of

the strongest holiday seasons since the recession.

THE 2016 HOLIDAY SEASON WILL BE GREEN

3

A Green Christmas: Several organizations providing holiday shopping season forecasts,

anticipate sales increases in the 3.2% to 4% range from a year ago. Here are a few of the

holiday season sales projections:

• Based on their annual survey, the National Retail Federation (NRF) projects retail holiday

sales (which excludes automotive, gasoline and restaurants) to grow by 3.6% from last

year, reaching $655.8 billion. The NRF forecasts that non-store sales, which includes

online purchases, will increase 7%-10% this holiday season, reaching $117 billion.

• Deloitte estimates total holiday sales (defined as November to January) will increase

3.6%-4% from last year. Deloitte’s annual survey estimates that consumer spending could

surpass $1 trillion over the three months. Fueled by smartphones, Deloitte estimates

online sales to grow by 17%-19% over the holiday season, approaching $100 billion.

• Kantar Retail anticipates strong growth of 3.8% from a year ago in 2016. Kantar

forecasts a 2% increase in retail stores and a boost of 16% with online purchases.

• A forecast from Retail Next expects sales in the 2016 holiday shopping season

(November and December) to be up 3.2% from one year ago. Retail Next forecasts a

boost of 14.9% in digital sales this holiday season.

• The International Council of Shopping Centers (ICSC) predicts an increase in physical

stores sales of 3.3% compared to last year. When online transactions are included, the

year-to-year increase jumps to 3.5%. The survey found holiday shoppers plan to spend

an average of $683.90 this year. ICSC reports 85% of holiday shoppers will visit a

website before making any in-store purchases.

• PricewaterhouseCoopers expects holiday spending to be the strongest since the Great

Recession eight years ago. In PwC’s “Holiday Outlook,” they forecast sales to be 10%

higher than in 2015. PwC expects a strong year in digital with sales up 25%. In the

report, PwC sees a trend of consumers preferring travel/entertainment gifts instead of

traditional holiday gifts.

TRENDS | INSIGHTS

4

• eMarketer projects that retail ecommerce will grow by 17.2% in November-December

2016, making it the highest annual percentage increase since 2011. Ecommerce is

expected to account for a record high 10.7% of all holiday retail sales in 2016, up from

9.4% in 2015. Mobile retail commerce is projected to grow by 43.2% in 2016, with growth

fueled by smartphones. Amazon is forecast to garner over 25% of all ecommerce dollars

this holiday season.

• In a survey from MNI, 41% of consumers plan on spending more money on gifts than they

did last year, adding up to the $10 billion dollar increase in total sales from last year. MNI

says 93% of all U.S. consumers plan on making a holiday purchase this season. Holiday

spending in 2016 is expected to reach $692 billion.

The are several reasons for the anticipated strong holiday season: higher wages, low

inflation, low interest rates, low unemployment levels, low gas prices and an overall boost

in consumer confidence in the economy. Another factor is the increase in minimum wage

rates in several states, which could lead to lower income consumers spending more during

the holidays.

TRENDS | INSIGHTS

8.0%

6.0%

4.0%

2.0%

0.0%

-2.0%

-4.0%

-6.0% Source: National Retail Foundation

2.1%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

5.1%

6.8%6.2%

3.3%

-4.6%

0.3%

5.2%4.6%

2.7% 2.7%

4.1%

3.0%

AVERAGE DIFFERENCE IN HOLIDAY SALES FROM PREVIOUS YEAR

5TRENDS | INSIGHTS 5TRENDS | INSIGHTS

6 TRENDS | INSIGHTS

THE TEN BUSIEST SHOPPING DAYS OF 2015 HOLIDAY SEASON

When to Shop: Although Black Friday has been the traditional start of the holiday season,

it appears that for many people, the holiday season starts earlier and earlier with each

passing year. A survey by CreditCard.com found that 73% of 1,000 people surveyed agree

with this statement: “It is annoying that the holiday season has gotten earlier.” A majority

of the respondents (52%) believe that “around Thanksgiving” is the most suitable time to

decorate stores. Nonetheless, some retailers, mindful of potential revenue, promote the

holiday season before Thanksgiving.

Early start aside, Black Friday remains the busiest shopping day of the year. (The NRF

said in 2015, 151 million people, nearly half the population, shopped in-store and online

over Thanksgiving weekend.) According to ShopperTrak.com, after Black Friday, the next

four busiest shopping days of the 2015 fell on Saturdays, including the day after Christmas.

For online shopping, Cyber Monday, the day after Thanksgiving weekend, was the heaviest

spending day of the 2015 holiday season. It marked the sixth straight year Cyber Monday

was the busiest day for online holiday shopping. comScore reported $2.28 billion in

desktop buying in 2015. Unlike retail, e-retail’s heaviest shopping days fell on weekdays.

In-StoreFri

Sat

Sat

Sat

Sat

Sun

Sat

Mon

Sun

Sun

OnlineMon

Tue

Fri

Fri

Mon

Mon

Tue

Thu

Wed

Tue

Nov. 27

Dec. 19

Dec. 26

Dec. 12

Nov. 28

Dec. 20

Dec. 05

Dec. 21

Dec. 13

Dec. 29

Nov. 30

Dec. 01

Nov. 27

Dec. 11

Dec. 14

Dec. 07

Dec. 08

Dec. 10

Dec. 02

Dec. 15

“Black Friday”

“Super Saturday”

Day after Christmas

“Small Business Saturday”

“Cyber Monday”

“Black Friday”

“Green Monday”

Sources: ShopperTrak.com & comScore

7TRENDS | INSIGHTS

Ad Spending: Retail was the top product category in ad spending during the last two

months of 2015. Kantar Media reports the category expenditures were $4.35 billion,

an increase of 1.4% from the previous year. For November-December 2015, retailers

accounted for 15.4% of total media ad spending.

Leading Retailers: Walmart was the largest retail advertiser over the two-month holiday

season. In 2015, Kantar Media reported the discount department store spent $255 million

in ad dollars. Following Walmart were Macy’s, Target and Kohl’s. Of the ten largest

retail advertisers during the 2015 holiday season, only two increased ad spending in

2015 compared to 2014: Kohl’s and Amazon. Collectively, the top ten retail advertisers

accounted for 30% of holiday spend of the category.

Source: Kantar Media November 1, 2015-January 3, 2016

$5.00

$4.50

$4.00

$3.50

$3.00

$2.50

$2.00

$1.50

$1.00

$0.50

$0.00

$4.35

$3.04

$1.68$1.35 $1.33 $1.19 $1.08

Retail Automotive Telecom FinancialServices

Pharmaceutical Insurance Restaurants

TOP AD SPENDERS BY CATEGORY NOV-DEC 2015 (IN BILLIONS)

8 TRENDS | INSIGHTS

Although ad spend grew slightly for the entire category, among the ten largest, it

decreased by 3.3% year-to-year. With the ten largest retailers reporting an overall decline

in expenditures, other retailers outside the top 10 increased their holiday ad spending in

2015, some significantly.

RETAIL MARKETERS INCREASED HOLIDAY AD SPENDING IN 2015

COMPARED TO 2014

• Walgreen’s increased ad spending by 10% in 2015, reaching $57.8 million.

• HomeGoods increased ad spending by 5% in 2015, totaling $50.2 million.

• Zales increased ad spending by 9% in 2015, totaling $42.6 million.

• PetSmart increased ad spending by 40% in 2015, totaling $31.9 million.

• Zulily increased ad spending by 146% in 2015, totaling $31.5 million.

Source: Kantar Media

Retailer

Walmart

Macy’s

Target

Kohl’s

Amazon

JCPenney

KAY Jewerlers

The Home Depot

Best Buy

Sears

TOTAL RETAILERS

Ad Spend ($ in millions)

$255

$238

$183

$130

$108

$102

$90

$81

$76

$64

$ 4,350

% Change 2014

-2%

-8%

-8%

26%

50%

-1%

-8%

-2%

-23%

-48%

+1%

TOP 10 RETAIL ADVERTISERTS NOV-DEC 2015

Source: Kantar Media

9TRENDS | INSIGHTS

Top TV Advertisers: With 44% of spending, Kantar Media reports television was the most

popular medium for retail advertisers during the 2015 holiday season, followed by digital

media at 26%. Looking at individual advertisers, HomeGoods allocated 96% of its holiday

season ad budget to television—more than any other retailer—followed by Kay Jewelers

(93%), Zale’s (92%) and Burlington (91%). Walmart, the top retail advertiser during the

holiday season, allocated 78% of its ad spending to television.

Budget Distribution-Holiday Season 2015: When retailers begin to advertise for the

holiday season can vary. Although most retailers typically start to spend more during

Thanksgiving week and into December, Kantar Media reports one-third of all of retail

ad dollars budget were spent in the three weeks prior to Thanksgiving (November

2-22). During Thanksgiving week, when there were many in-store promotions, 15%

retail ad dollars for the holiday season were spent. Over the next five weeks (November

30-January 3), a majority (52%) of ad dollars were spent by holiday retailers.

Conclusion: No time of the year is more important to retailers than the holiday season.

The NRF reported in 2015 that consumers spent $626.1 billion during the holidays.

By comparison, back-to-school ranked a distant second at $68 billion, followed by

Mother’s Day at $21.2 billion. Kantar Retail forecasts that retailers will continue to invest

in advertising this holiday season with year to year growth in the 1%-2% range. All

indications are this holiday season will be one of the strongest in recent years, especially

for retailers that advertise on television.

9

www.ComcastSpotlight.com