Despite fears that supply chain disruptions and inflation could hamper holiday sales, retailers took advantage of a very strong season in the last quarter of 2021. But instead of kicking back and relaxing, smart clothing brands and stores will take the best trends from last year and incorporate them into their business now and throughout the year at to come.
The National Retail Federation (NRF) reported retail sales during the holiday season from November to December 2021 grew 14.1% in 2020 to $886.7 billion. The total beat the NRF’s October forecast of increases between 8.5% and 10.5% over last year. December sales were up 16.9% year-on-year. Clothing and clothing accessories stores saw sales jump 33% during the 2020 holidays.
“Worries about inflation and COVID-19 are putting pressure on consumer attitudes, but did not curb spending, and sales have been remarkably strong,” said NRF chief economist Jack Kleinhenz. “Even though many consumers started shopping in October, these are the strongest months of November and December we have ever seen. Despite supply chain challenges, retailers kept their shelves stocked and consumers were able to fill their baskets in-store and online. Holiday spending in 2021 reflected continued consumer demand driving the economy and is expected to continue into 2022.”
Although spending may continue, Mastercard Institute of Economics expects consumers to start spending more on travel and services, which have been severely hampered since the start of the pandemic. Significant consumer savings and mobility restrictions caused a “massive rewind of 27 years in services”, while the share of spending on goods fell from 39% to 47%.
“As borders open up and people start to travel again, consumers will return to pre-crisis spending for experiences versus “things”,reports the Mastercard Economics Institute.
Certainly since COVID-19 hit the United States, most consumers (64%) report staying home more than before the pandemic, according to Cotton Incorporated’s 2021 Coronavirus Response Consumer Survey, Wave 9, December 8, 2021. But the majority (58 percent) now feel “very or completely safe” resuming their normal pre-pandemic activities.
Nonetheless, Kleinhenz said, “We must be prepared for challenges in the months ahead due to the substantial uncertainty brought by the pandemic.”
Of course the pervasive pandemic has had an effect on holiday shopping and the NPD Group says brands and retailers will need to “be nimble” to prepare for the impact this could have on them in 2022. For starters, the industry should be prepared more supply chain issues.
“While it is evident that some of the inventory replenishment is firmly centered on current consumer demand, this demand could easily decline in the coming months,” said Marshal Cohen, senior industry adviser for NPD. “Retailers and brands must continue to carefully monitor the needs and buying behavior of their customers, in order to maintain a balance between supply and demand.”
The uncertainty engendered by the pandemic and questions about “returning to normal” probably mean the “COVID lifestylee” will continue, according to The NPD Group. This means that the apparel industry should expect consumers to continue to wear and replace bedroom slippers and “other comfortable garments more appropriate at home than pro forma suits and shoes more often.” taken to the office”.
Most consumers (69%) say they wear more comfortable clothes now than before the pandemic, according to the Coronavirus Response Survey (Wave 9). And when asked what type of clothing they are most likely to buy in anticipation of the resumption of business, the top three choices of shoppers are t-shirts (37%), denim jeans (33%) , casual shirts/blouses (30%), and sports shirts, pants or shorts (27%).
Incidentally, shopping for clothes in-store is the top activity American consumers engage in these days (60%), more than seeing family and friends without masks (49%), going to bars or restaurants (49%) or going to work. in person (49%), according to the Coronavirus Response Survey (Wave 9).
While 40% of consumers say they have a stronger preference now than before the pandemic for shopping for clothes in a physical store, 36% say they prefer buying clothes online, according to the Coronavirus Response Survey (Wave 9) . Regardless, the vast majority (73%) say this experience will change the way they buy in the future.
Caila Schwartz of Salesforce, senior director, strategy and consumer insights, says new fundamental changes during the holiday shopping season is expected to continue through 2022. She says supply chain challenges have triggered advance shopping around the world, leading to a 16% year-over-year increase in online sales during the first week of November. But, she adds, retailers made 23% of their holiday sales in the last two weeks of the year thanks to buy-on-line/pick-up-in-store (BOPIS) options that extended the window of holiday shopping.
“American retailers that offered BOPIS grew almost twice as fast than their non-BOPIS peers in the last two weeks of the season,” she says. “In 2022, retailers must identify and eliminate friction points in the store by embracing digital shopping experiences. And they will be rewarded: 60% of digital orders will be connected to physical locations that either help create demand , or to execute the commands.
Schwartz adds that for the first time, credit card usage has declined among online shoppers as they opted for mobile wallets like Apple Pay (up 68% from 2020) and financing tools like buy now/pay later (up 29% from last year).
“As consumers find new favorite products and new ways to pay, it’s more important than ever for retailers to offer alternative payment options while continuing to smooth the payment funnel for a frictionless experience,” says Schwartz.
While the onus is on stores and brands to work harder, move faster and meet customer expectations at all times, NRF President and CEO Matt Shay expects today’s retailers can rise to the challenge.
“We’ve seen consumer behavior evolve over the past few years and many of the changes we’ve seen over the past two years have been an acceleration of existing trends – whether it’s methods of engaging with retailers through the use of social media, building online communities, fulfillment options (same day delivery, BOPIS) or payment options,” Shay said at the recent NRF Big Show in New York City. There are many initiatives underway and we are confident that retail will continue to scale up and meet today’s greatest challenges.”