Holiday Survival Kit 2014

Holiday forecasts, consumer trends and historical retail sales data from the National Retail Federation

n r f . c o m / h o l i d a y s


The National Retail Federation’s Holiday Survival Kit serves as a guide for reporters and retailers, offering historical information on holiday sales, employment data and consumer trends.

NRF experts will be available throughout the holiday season to discuss consumer trends, economic data and a variety of other retail topics. To interview a retail expert for print or broadcast, please contact:

p r e s s @ n r f . c o m (855) NRF-PRESS

OR

Kathy Grannis (202) 626-8189 g r a n n i s k @ n r f . c o m

Holiday trends and the latest survey data will be posted regularly on NRF’s Holiday Headquarters at n r f . c o m / h o l i d a y s .

For up-to-the-minute holiday news,

follow @ N R F n e w s on Twitter.

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T able of Contents

I. Holiday Forecasts for 2014__________________________________

1. Holiday Sales and Forecast__________________________________________

2. A Look at Holidays Past_____________________________________________

3. Holiday Sales by Select Sectors______________________________________

4. Retail Employment and Seasonal Hiring_______________________________

II. 2013 Wrap Up: Holiday Trends_____________________________

1. 2013 Holiday Trends_______________________________________________

2. When Americans Started Shopping in 2013____________________________

3. Black Friday and Cyber Monday: Final Numbers for 2013_________________

4. Online Holiday Retail Trends from 2013________________________________

III. Frequently Asked Questions_______________________________

IV. Tips for Navigating the Retail Insight Center: Access More Data in 5 Easy Steps______________________

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CONTENTS PAGE


holiday sales in 2014

Source: NRF, derived from U.S. Department of Commerce data

Expected e-commerce growth of

$105 Billion

* Projected

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2014* $619,900 4.1% $3,194.318 19.2%

2013 $592,660 3.1% $3,083,319 19.2%

2012 $574,937 2.9% $2,980,372 19.3%

2011 $558,802 4.8% $2,867,845 19.5%

2010 $533,118 5.3% $2,727,112 19.5%

2009 $506,303 0.5% $2,640,725 19.2%

2008 $503,805 -4.4% $2,732,598 18.4%

2007 $527,046 2.8% $2,732,598 18.4%

2006 $512,883 3.3% $2,624,387 19.5%

2005 $496,332 6.2% $2,492,997 19.9%

2004 $467,339 6.8% $2,349,973 19.9%

Holiday Forecasts for 2014 The holiday season, defined by NRF as sales in the months of November and December, is the biggest time of year

for retailers of all shapes and sizes. Retail sales during these two months can account for as much as 20-40% of a

retailer’s annual sales. This year, NRF estimates that holiday sales will increase 4.1% to $616.9 billion. Holiday sales

estimates are often viewed as a solid indication of the overall health of consumers’ financial stability — decreasing

during times of economic uncertainty and increasing during a thriving economy. The average increase in holiday

sales for the past 10 years is 2.9%.

Shop.org Online Holiday Forecast

Shop.org, NRF’s digital retail division, expects online holiday sales to grow between 8 — 11% this year. Using expected sales in the months of November and December and economic data derived from the U.S. Department of Commerce, NRF’s chief economist expects online retailers will see solid growth this holiday season.

HOLIDAY INDUSTRY SALES BY YEAR

Year Holiday Retail Sales

(in millions)

Holiday Sales % Change

Annual Retail Sales (in millions)

Holiday Sales as a % of Industry

Sales


holiday sales in 2014

Here are some trends from holidays past:

2013: A shortened holiday calendar, an early Thanksgiving and an October government shutdown put the 2013 holiday season in the books as one of the most interesting in history. For the first time in 17 years, holiday shoppers watched as Washington shut its doors for two weeks in October. During his annual holiday forecast media call, NRF President and CEO Matthew Shay told listeners that the 3.9% forecast “was a very realistic look at where we are in the current economy …”

2012: The economic picture going into the holiday season was much like it would end up being the year after — uncertain. Government data showed a crosscurrent of indicators that hung in the balance of Washington’s decision to avoid a “fiscal cliff.” NRF’s first holiday spending survey found that consumers would spend close to what they’d spent the previous year, an average of $740 on gifts, décor, flowers, food and more.

2011: In December, NRF announced it was revising its holiday forecast upward to 3.8% from the original forecast of 2.8%. Chief Economist Jack Kleinhenz commented, “Consumer spending this holiday season has surpassed expectations, though many shoppers continue to stick to their budgets and buy only what they need. Despite modest job and income growth, consumers have continuously proven they have the capacity to spend.” Holiday sales in 2011 ended up increasing even more than expected, to 4.8%.

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Historical Holiday Trends

Just how big is the holiday season in the grand scheme of things?

Nearly one-fifth of the industry’s annual sales in 2013 — $3.2 trillion — came directly from the months of November and December, making it the top consumer spending event of the year.

Second to the holiday season is the back-to-school and college season, which was estimated to reach $74.5 billion this year.

The holiday season also accounts for more sales than Mother’s Day, Father’s Day, Valentine’s Day, Halloween, Easter and St. Patrick’s Day combined.


Holiday Sales by SectorFrom jewelry and sporting goods to apparel and electronics, holiday gifts run the

gamut. In 2013, electronics stores saw 23% of their total annual revenue come

during the months of November and December. The sector with the highest

percentage of sales that occur during the holiday season is jewelry stores at 28%.

Jewelry has the highest % of sales during the holiday season

28%

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Source: NRF, derived from U.S. Department of Commerce data


Source: NRF, derived from Bureau of Labor Statistics data

Retail Employment and Seasonal Hiring

As retailers ready their stores for the crowds that typically accompany the holiday season, they also begin

preparing behind the scenes by hiring extra staff. These new hires are brought on to run the store, manage gift

wrap, stock new inventories and serve as customer service representatives. This holiday season, NRF predicts

retailers will hire an additional 725,000 — 800,000 seasonal employees. In addition to retailers’ seasonal

positions, retail indirectly creates many jobs throughout the holiday season for workers in transportation,

manufacturing and fulfillment.

Here’s a look at holiday hiring over the last 10 years:

* Projected

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1000

900

800

700

600

500

400

300

200

100

0

HISTORICAL HOLIDAY HIRING

Hol

iday

Em

ploy

men

t (i

n th

ousa

nds)

2004

679.98 660.27

263.82

368.76

563.02

636.57671.70

768.30800.00*

684.43 688.38

2006 2008 2010 20122005 2007 2009 2011 2013 2014


2013 Holiday Trends and Consumer ResearchRetail companies, news media and analysts commonly seek out consumer trend data from NRF for insights into

what to expect from shoppers during the holiday season. This is the 13th year NRF has partnered with Prosper

Insights & Analytics to provide this data.

$767 27Total amount spent per

person in 2013

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Source: Prosper Insights & Analytics for NRF, 2013 Consumer Spending Survey

Consumer Spending on Holiday Trimmings, Gifts and More

$500

$400

$300

$200

$100

$50

$0

Gift

s fo

r fam

ily

Gift

s fo

r frie

nds

Gift

s fo

r co-

wor

kers

Oth

er g

ifts

Deco

ratio

ns

Cand

y an

d fo

od

Card

s &

pos

tage

Flow

ers

CONSUMER SPENDING

$432.00

$75.00

$24.52 $21.96$26.65 $29.14

$53.65

$104.34

n r f . c o m / h o l i d a y s9

When Does Holiday Shopping Begin?

The prevalence of early holiday deals put many eager shoppers in the spirit as early as September

last holiday season. Historically, four in 10 holiday shoppers began shopping for holiday gifts before

Halloween each year, meaning there are plenty of people shopping for holiday trimmings at the

same time they are picking out pumpkins.

Why are Americans Shopping for the Winter Holidays Earlier?

With the economy still driving much of the

consumer spending conversation in retail,

NRF for the first time in 2013 asked holiday

shoppers about the reasons they shop

before Halloween. Ranging from a desire

to avoid holiday crowds to simply the fact

that they shop for the holiday season year-

round, it is clear there’s a desire among

shoppers to get their hands on retailers’

early promotions.

WHEN PEOPLE SHOPPED %

Before September..........................12.4% September.......................................8.2% October..................................... ....20.6% November......................................38.8% First 2 weeks of December...........16.0% Last 2 weeks of December.............3.9%


To spread out my gift shopping budget 60.3%

Prices/promotions are too good to pass up 41.9%

To avoid traditional crowds associated with shopping in November and December 46.5%

I don’t want to miss out on desired items (specific gifts, ornaments, decorations, wrapping paper, etc.) 23.7%

Habit 16.5%

I tend to shop for the holiday season year-round 27.2%

To avoid the stress of last-minute shopping 44.2%

Shopping early gives me more time to really enjoy/celebrate the holiday season 32.3%

I am using layaway services available now 6.9%

…Of those who shop before October:

Why do you begin shopping for the holidays prior to October?


Top ToysWhile traditional toys still top the lists for boys and girls

each holiday season, many parents are saying electronics

such as iPads, apparel and pop culture items like Legos

are more popular gift choices for kids.

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28Source: Prosper Insights & Analytics for NRF, 2013 Consumer Spending Survey

2013 Top Toy for Boys: Legos

2013 Top Toy for Girls: iPad/tablet

According to NRF, 45 million holiday

shoppers turned up for retailers’

Thanksgiving openings in 2013, up

significantly from the estimated 35 million

in 2012. Many shoppers stood in long

lines to be able to shop on Thanksgiving

night, leaving home as soon as the

pumpkin pie was put away — even

sooner for those who had a “must-have”

item they wanted to pick up. But when it

comes to the biggest shopping days of

the holiday season, Black Friday has not

lost any luster with bargain hunters: More

than 92 million shoppers shopped online

and in stores that day, making it the

biggest shopping day of the year.

MILLIONS WHO SHOPPED BLACK FRIDAY WEEKEND

Black Friday and Cyber Monday: Final Numbers for 2013

100

90

80

70

60

50

40

30

20

10

0

Num

ber

of c

onsu

mer

s (i

n m

illio

ns)

THURSDAY

2013 2012 %=growth from 2012 to 2013

FRIDAY SATURDAY SUNDAY

26.7% 3.5% -8.3% -11%



Shopping Online on Black Friday

Savvy holiday shoppers know that the best deals of the holiday season aren’t only in stores. When it comes to

the biggest shopping weekend of the year, those with a keen eye for discounts made sure to check out what the

Internet had in store for them as well as what was in physical stores.

Did you or will you shop online….

Thursday, November 28 (Thanksgiving Day) 26.5%

Friday, November 29 (Black Friday) 47.1%

Saturday, November 30 35.7%

Sunday, December 1 24.5%

Cyber Monday

Cyber Monday, a term coined by Shop.org in

2005, began after retailers noticed a trend

of people shopping online on the Monday

after Thanksgiving. Today, Cyber Monday is

viewed as the kickoff to the online holiday

shopping season, when shoppers flood

websites to take advantage of retailers’

online promotions. In 2013, 131 million

people said they planned to shop online

the Monday after Thanksgiving.

What’s more, 25 million holiday shoppers

said they would specifically use their mobile

device to shop online on Cyber Monday.

25Million Americans shopped with their

mobile device on Cyber Monday in 2013


What is NRF’s prediction for holiday sales growth this year?

NRF is projecting 2014 holiday sales to increase 4.1% to 616.9 billion.

How much did holiday sales change last year?

In 2013, holiday sales increased 3.1% to $592 billion. By comparison, 2012’s increase was 2.9%. On average, not including 2014’s estimate, holiday sales have increased 2.9% for the last 10 years.

Why are these numbers different than what you have previously reported?

The Commerce Department continuously revises retail sales data. NRF relies on the most recent set of estimates from the government for all of its forecasts and sales releases.

How big is the holiday season compared to annual retail sales?

For some retailers, the holiday season can represent as much as 20-40% of annual sales. In 2013, holiday sales represented 19% of total retail industry sales.

Will NRF change its holiday forecast throughout the course of the holiday season?

While NRF reserves the right to change its forecast at any time, NRF rarely does so. The last time NRF revised its holiday forecast was in 2011 when it announced in December the group expected sales to increase 3.8% after originally coming out in October with a forecast of 2.8%. Sales that year actually ended up increasing 5.3%.

Frequently Asked Questions

How do NRF’s surveys differ from its forecast?

NRF’s holiday forecast is based on an economic model using indicators such as housing data, unemployment and previous monthly retail sales reports from the U.S. Department of Commerce. NRF’s holiday surveys, conducted by Prosper Insights & Analytics, provide a snapshot of what consumers say they plan to do for the holiday season. This is the 13th holiday season that NRF has partnered with Prosper to provide holiday data, making it possible to identify year-over-year trends.

How many extra jobs does the retail industry create during the holiday season?

This year, NRF estimates that retailers will hire between 725,000 and 800,000 seasonal employees, compared with the actual 768,000 they hired last holiday season. For historical holiday hiring information, see page 7.

What does NRF classify as the “winter holidays”?

NRF tallies total retail industry sales from November and December — 61 days — to determine holiday sales. Holidays during this period include Thanksgiving, Christmas, Hanukkah and Kwanzaa. This year there are 28 days between Thanksgiving and Christmas. Last year an early Thanksgiving and a shortened December left many companies with little choice but to promote aggressively on the front and back ends.

How does NRF define “retail industry sales”?

Retail industry sales include most traditional retail sales categories such as discount stores, department stores, grocers, specialty stores and non-store sales, but exclude sales at automotive dealers, gas stations and restaurants.


What is Shop.org’s prediction for online holiday sales growth this year?

Shop.org projects online holiday sales to increase between 8-11% to as much as $105 billion during the months of November and December. While not directly comparable, the U.S. Commerce Department reported that final Q4 (October-December) 2013 increased 10% year-over-year.

What factors are used to calculate Shop.org’s online holiday forecast?

Shop.org’s estimates are based on data collected by the U.S. Department of Commerce, the Federal Reserve, the U.S. Census, the Conference Board and NRF’s own calculations. These estimates include personal income and spending, consumer credit, consumer confidence and previous monthly retail reports.

What is Cyber Monday?

Cyber Monday, the Monday after Thanksgiving, is the online retail equivalent of Black Friday. The term was coined in 2005 by NRF’s Shop.org division based on clear consumer behavior in 2003 and 2004. Retailers noticed that many consumers, who were too busy to shop over the Thanksgiving weekend or did not find what they were looking for, shopped online that Monday to find bargains, often from work. At that time, with dial-up modems or no Internet connection at home, many consumers took advantage of the high-speed Internet connections available at work.

Why are many retailers putting holiday merchandise on the shelves so early?

Each year about 40% of consumers begin their holiday shopping before Halloween. While most retailers do not begin holiday advertising until

at least October or November, they recognize that many people like shopping early to spread out spending. As a result, many retailers are putting holiday merchandise on the shelves in September — specifically decorations and greeting cards, which many people buy months in advance.

Is Black Friday the busiest shopping day of the year?

NRF does not monitor or track actual sales by day. However, ShopperTrak, which counts foot traffic at malls, reports that Black Friday is the busiest shopping day of the year, followed by “Super Saturday” and the Sunday before Christmas. NRF research does find that over the entire holiday weekend, beginning Thanksgiving Day, Black Friday remains the busiest day with more than 131 million unique shoppers.

Why have retailers changed their return policies?

Some retailers make return policies more lenient during the holiday season, understanding that there may be a lag time between when a gift is purchased and received. However, many retailers have also begun to change their return policies to account for an increase in return fraud. Last year, according to NRF’s Return Fraud survey, retailers estimated they would lose $2.9 billion due to return fraud during the holiday season.

Are traditional retailers hurt when people shop online?

Most retailers have no preference when it comes to whether customers shop in stores, or online or even through their smartphones — as long as consumers shop with them. Retailers know their customers like to shop in a variety of ways and they have adapted to ensure customers can shop anytime, anywhere.


Tips for Navigating the Retail Insight Center: Access More Data in 5 Easy StepsThe Retail Insight Center is a comprehensive online resource that provides easy access to industry research from

government sources, NRF studies and historical and current consumer trend data from Prosper Insights & Analytics.

1. Go to: r e s e a r c h . n r f f o u n d a t i o n . c o m .

2. Register as a user –– it’s free. Charts are available without registering as a user; however,

users are unable to access all data that’s available, or customize charts, without a login.


3. Go to a topic page. The Insight Center charts are organized by topic and subtopic. Use the

navigation at the top of the page to find what you’re looking for.

4. Customize. Users can select a date range, demographics, and even type of chart — such as a pie,

bar, or line graph — when the data is available.

To do this, click the down-arrows in the top left-hand side of the chart, next to “Options” — this will

display all of the options available for customizing this particular chart and data.

Once your options are set, click the “Update Chart”

button for your new chart to appear.


5. Export or create a report. Users have the option to export charts, download the data or build a report

combining research from various parts of the center. Want to share the information with someone else or your

entire network? Users can send the page they’re viewing using integrated social media “share” buttons.

For more information on reading charts in the Insight Center, check out the Tools and Tips page.

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Holiday Survival Kit 2014

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