January 18, 2019

Executive Summary: Highest Retail Sales in Six Years

  • Overall retail spending in the 2018 holiday season totaled $850 billion, reaching its highest level in six years and up by 5.1% from 2017, according to Mastercard’s SpendingPulse. 
  • Strong growth was driven by robust consumer sentiment, which reached its highest level since the 1999 holiday season,1 and low gas prices, which gave consumers more disposable income.  
  • Healthy holiday sales are a positive indicator for 2019, suggesting strong retail spending in Q1.  
  • Due to the partial government shutdown, official Census Bureau retail sales figures for Q4 2018 have not yet been published. CBRE will issue a follow-up report on holiday sales performance upon release of the Census Bureau figures.

BOPS/ BOSS Strategies Pay Off

  • This holiday season set a record for in-store pick up of online purchases, which increased by 47% year-over-year during the Nov. 1 to Dec. 19 period.2 This reflected retailers’ increased investment in buy-online, pick up in-store (BOPS) and buy-online ship-to-store (BOSS) strategies over the second half of 2018.
  • To avoid disappointing customers and reduce delivery costs, 33% of retailers canceled their “last order promise date,” choosing to instead promote their BOPS and BOSS offerings.3   
  • Old Navy promoted its buy-online, pick up in-store service by offering customers a free ride to and from the store from Lyft.
  • Target reported that online orders fulfilled through store pick-up services are up 60% from a year ago and accounted for roughly 25% of online sales this holiday season. 

Retailers Fight for Toy Share 

  • As predicted in CBRE’s 2018 Holiday Trends Guide, the demise of Toys R Us left many retailers fighting to gain share in the toy market. 
  • The toy category saw much steeper discounts that averaged 31% on Cyber Monday compared to 19% a year ago.3
  • Retailers likely will expand their toy selection in 2019 and offer even more discounts to gain market share in the competitive toy market.  

Omnichannel Keeps on Giving  

  • As expected, online sales this holiday season grew to $110.6 billion, up by 17.8% from 2017.3
  • Mobile commerce—a trend explored in CBRE’s Omnichannel Hub—accounted for more than half of online visits and increased 19.8% year over year.3
  • Through smartphones, shoppers spent $1 billion on Thanksgiving Day and more than $2 billion on Black Friday.3
  • The 2018 holiday season proved that retail sales will continue to shift online and that omnichannel retailers will capture the greatest share of consumer spending.

1 University of Michigan Consumer Sentiment Index.
2 Adobe Analytics.
3 Kurt Salmon  - Accenture.

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