Mastercard: Gift Cards Pack One-Two Punch during Holidays; In-Store Sales Still Dominate
An “extremely strong” November for holiday shopping concluded with a “solid start” over Thanksgiving weekend, according to Sarah Quinlan, senior vice president of Market Insights for Mastercard. Although final holiday shopping data won’t be available until the end of the month, Quinlan spoke with Paybefore about how the shopping season is shaping up for retailers.
Gift card sales “will continue to grow … There’s no doubt about it,” Quinlan says. “I think [sales] will be bigger than last year but how much bigger remains to be seen.” Gift cards offer retailers a one-two punch. There’s the initial sale, but gift cards also play a strong role in the week of shopping after Christmas, which has become almost as big as the week before Christmas, she says. Consumers “go out and do some serious shopping” beyond returning unwanted presents. Many of them are redeeming gift cards and spending more than the face value, she notes.
Many retailers began promoting Black Friday sales immediately following Halloween, offering discounted items in the days leading up to the unofficial start of the shopping season in the U.S. Quinlan says there’s no doubt many retailers tried to lengthen the sale period, but Black Friday still means lots of shoppers because most people don’t have to work and it’s an event that people can do together.
Mastercard saw strong spending on Black Friday, but is forecasting that the Friday before Christmas, the 23rd, will be the biggest shopping day of the year, Quinlan says. The payments network will be releasing Mastercard SpendingPulse on Dec. 29, and will report on national retail sales based on aggregate sales activity in the Mastercard payments network, coupled with estimates for all other payment forms, including cash and check.
Quinlan also addressed incorrect reports in the press—that online shopping is hurting sales growth in stores. In November, only 8.6 percent of total retail sales was done online, and during the five-day period between Thanksgiving and Cyber Monday it was 9.4 percent, according to Quinlan, who adds that there was growth in brick-and-mortar store sales. “I still think online and omnichannel are very important, but as I look at it from the business standpoint of retailers, they should always balance online with the importance of in-store, which still dominates,” she adds.