The impact of Hurricanes Harvey and Irma on retail sales
Hurricanes Harvey and Irma had a similar impact on retail sales and the toll was significant on online spending as well as spending in physical stores.
First Data found that Retail spending plummeted 58.7% week-over-week (43.7% year-over-year) in Houston and its surrounding areas at the peak of the hurricane, according to First Data, released two reports analyzing the magnitude of the impact that Hurricane Harvey and Hurricane Irma had on consumer spending. Across the state of Florida, spending dropped 55.7% week-over-week (or 39.1% year-over-year) at the apex of Hurricane Irma.
“Our data shows that consumer spending in both impacted regions followed a similar trajectory," said Rishi Chhabra, VP, information & analytics, First Data. "Spending increased the week before the hurricanes, with people stocking up on key items like gasoline and groceries, and dropped significantly during the storm. After the worst of the hurricanes, consumer spending rebounded as people began to rebuild.”
Both brick-and-mortar stores as well as e-commerce saw a significant drop in sales, First Data found. In Houston during the week of Hurricane Harvey, online spending dropped 41.4%. By comparison, total U.S. e-commerce business was down only 4.3% during the same week. Post-storm, Houston e-commerce sales continued to drag while national e-commerce sales rebounded.
The same was true for Hurricane Irma. In Miami, online activity started dropping the week before Irma, declining significantly by 39.3% during the week of the hurricane (U.S. online spending was up 3.9%). After the hurricane, Miami e-commerce sales increased 0.6%, dragging behind national spending which was up 12.9%.
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Forrester: Online holiday spending to increase by double digits over last year
Overall positive economic conditions will propel retail sales online as well as of offline this coming holiday season.
That's according to a report by Forrester, which predicts that U.S. online holiday sales will grow 12% to reach $129 billion in 2017, compared to $115 billion last year. Offline holiday sales will inch up 0.3%, to reach $549 billion in 2017.
The total number of online holiday buyers in the U.S. will be 3% higher this year than it was last year, the report said. But the real firing power behind this year’s higher online holiday sales is increased spending. Online holiday shoppers will spend an average of $689, which is 8% more than in the 2016 holiday season.
With just four to six weeks to go before the official start of the 2017 holiday season, retailers must optimize service and functionality to deliver the best bang for their buck. Given the tight timeline, Forrester recommends that retailers focus their efforts on four key areas.
"Capping off months of planning, retailers must focus on four priorities before the holiday season kicks off," the report said. "Review your omnichannel fulfillment processes, re-tune your marketing plans, streamline your mobile checkout process, and craft your performance management strategy.
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