Fiserv: What The 2019 Holiday Shopping Data Says About 2020 Spend

’Tis the season for … looking back at 2019 holiday sales trends, and figuring out what they mean for payments and commerce so far. Based on the incoming data, it seems that Amazon might not be the traffic driver some retailers expect, that the consumer experience experiment is going well, that mobile wallets might be enjoying a real moment of glory and that apparel sales are moving away from the traditional brick-and-mortar mix, though it’s hard to tell what’s really happening there.

To get a better sense of what happened during the recent holiday commerce season, Karen Webster of PYMNTS recently caught up with Glenn Fodor, senior vice president of data and analytics at Fiserv (First Data). “Brick-and-mortar had its moments,” he told Webster, “but it struggled.” Data from Fiserv supports that point: Brick-and-mortar retail growth during the 2019 holiday season stood at 1.4 percent, trailing the 8.1 percent growth rate for eCommerce. Total retail growth was 3.8 percent.

However, Fodor didn’t meet with PYMNTS to simply give a tired account of how eCommerce is outpacing physical retail. That’s important, of course, but what also matters is how the ongoing growth of eCommerce is — and is not — impacting brick-and-mortar retail. “The online experience is just getting that much better, as far as ease,” he said.

In addition, online shopping often does a better job of giving shoppers exactly what they want, even though consumers cannot touch products. One sign of that is the increasing willingness of consumers to buy such products as apparel, furniture and sporting goods online — products that still often inspire consumers to test them out or try them on inside physical stores.

Apparel Questions

Clothing, in fact, stands as a strong example of retail moving from the physical realm to online. Holiday season growth for clothing and accessories stores stood at 2.3 percent, according to Fiserv. Yet, that doesn’t necessarily mean consumers are buying fewer clothes. “I suspect people are still buying [apparel], but are shopping for it elsewhere,” Fodor said — and that elsewhere includes online and mobile channels.

Indeed, apparel is playing a big role in determining how this recent holiday shopping season performed from a sales-and-retail-experience perspective. Take Kohl’s, for example. The retail chain has yet to report its fourth-quarter or full-year 2019 earnings. However, in a statement released earlier in January, Kohl’s said its “comparable sales for fiscal November and December 2019 combined (the ‘holiday period’) decreased 0.2 percent over the same period last year.”

Kohl’s gave a few details about why holiday season sales decreased.

“We continue to see momentum in key areas, including our digital business, active, beauty and children’s, and solid performance in footwear and men’s,” said CEO Michelle Gass in the statement. “This was offset by softness in women’s, which we are working with speed to address.”

Those are not the only possible holiday trends to stem from the recent Kohl’s announcement about its holiday sales. The retail chain has a relationship with Amazon that includes a returns program — a relationship designed to deepen the appeal of the chain’s brick-and-mortar stores, and spark more foot traffic. Though Gass recently defended that relationship and the benefits it brings, skepticism is building about whether that’s really the case.

No matter the real story about Amazon and Kohl’s, brick-and-mortar retailers continue to put money and focus into deepening the consumer experience. At the same time, however, customers are demanding more retail convenience (that is, speed, as well as friction-free shopping and transactions), and those two ideals appear to be on a collision course. After all, putting fun and entertaining offerings inside a store can often serve to slow down shopping, and perhaps even lead to lost sales.

“Consumers show that when they get a taste of convenience, they don’t want to go back to experiences,” Fodor told Webster. The tension between those two strategies will continue to play out in the coming months. “I think this experience experiment will be very interesting to watch. In the near term, it’s a novelty, and it’s working.”

Yet, there seems to be one emerging truth from all this, the push and pull between convenience and experience. “If you build it, and build it the right way, [the consumers] will come,” Fodor explained, referencing that famous baseball diamond in an Iowa cornfield. At the least, building a better brick-and-mortar customer experience could help revive the fortunes of certain retailers. “Even if you are faltering, there is still hope for you,” he added.

Payment Methods

Experience or not, commerce is nothing without payments. In the 2019 holiday shopping season, mobile wallets showed fresh signs of growing up and becoming more mainstream. According to data from Fiserv, spending via mobile wallets increased 75 percent year over year during the last part of 2019. Granted, that is from a relatively small base, but could this be the year that mobile wallets really take off?

Perhaps, according to the discussion Fodor had with Webster. Younger consumers are increasingly using mobile wallets — and peer-to-peer (P2P) payments — as part of their consumer routines. As a result, retailers, restaurant operators and others are trying to meet that demand. However, mobile wallets have had numerous premature victory laps, so it’s always wise to be skeptical.

Skepticism is also warranted about general economic conditions, given the ongoing trade wars, political uncertainty, stagnant wage growth and the cottage industry that sprung up in 2019, predicting an imminent recession. Coming out of the 2019 holiday season, though, one can find reasons for optimism, including via consumer confidence reports and spending trends, to say nothing of the rising stock market. “We keep on trucking,” Fodor said, and that seems an apt motto for this new year.