Not All Brick-and-Mortar Retailers Are Feeling the Blues - eMarketer

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Not All Brick-and-Mortar Retailers Are Feeling the Blues

Some sectors notched healthy holiday sales gains

January 11, 2017

The divide between retail winners and losers seemed to widen further this holiday season.

US Holiday Season Retail Sales Growth for Select Categories, In-Store vs. Ecommerce, Oct 29, 2016-Jan 2, 2017 (% change vs. same period of prior year)

The losers seemed to garner most of the headlines over the past week. A parade of retailers, including Macy's, Sears and Barnes & Noble, delivered disappointing holiday sales. Women's apparel retailer The Limited shuttered its 250 brick-and-mortar stores. Retail heavyweight Wal-Mart Stores Inc. reportedly is planning to cut hundreds of jobs before the end of this month.

These retailers share a common thread: brick-and-mortar general merchandise, apparel or book chains, retail sectors that have been hurt by consumers choosing to spend more money online, or on other types of purchases, whether gadgets or home supplies or even experiences.

While general merchandise and discount brick-and-mortar store sales fell 2.8% this holiday season, online demand in the segment actually surged 29%, according to card-payment processor First Data in its 2016 SpendTrend report. Clothing and accessories stores saw a similar pattern, with a 0.8% in-store decline, compared with a 5.4% increase online. Sporting goods, hobby, book and music stores' physical store sales slid 6.9%, but the sub-sector's ecommerce sales surged 19%.

In line with the First Data findings, both Macy's and Barnes & Noble posted online holiday sales gains, but declines at their physical stores.

In total, the First Data study showed holiday season sales rose 3.6%, led by a 12% gain online. Physical store holiday sales rose 1.6%, down from a 2.5% increase in 2015. Ecommerce rose to 21.3% of the 2016 holiday season's sales, up from 15.4% in 2015.

Among the winners, Amazon continued to maintain its outsized lead. Amazon ate up 38% of holiday season online sales, according to Slice Intelligence, which studies digital receipts from a panel of 4.4 million online shoppers. Best Buy, a distant second on the online front, garnered a 3.9% online share, up from 3.5% in 2015.

Slice estimated Best Buy's holiday online sales surged 31%. Apple, meanwhile, was the fastest-growing merchant of the season, posting a 66% online sales increase, according to Slice.

Overall the electronics and appliance segment's 2016 holiday sales jumped 8.5%, reversing a 2.2% decline in 2015, according to First Data. And the sales gains weren't just online: physical store sales in the sector showed a 7.1% increase, while online sales rose 13.2%.

Building materials and garden equipment and supply stores also showed gains, with overall sales rising 10.7%. And for the furniture & home furnishings category, combined brick-and-mortar and ecommerce sales rose 2.2%.

"When people buy for their homes, they are less price conscious," said Crate & Barrel Chief Operating Officer Michael Relich. He said the home-furnishings and furniture chain has seen positive monthly same-store sales. "The home sector does well when the housing sector is doing well."

Slice's data also pointed to the housing-related retailers as one of the season's bright spots. It estimated Home Depot's holiday online sales jumped 40% and Lowe's sales surged 58%. Online retailer Wayfair's ecommerce sales gained 27%, according to Slice estimates.

Health & personal care stores group was another holiday winner. First Data showed combined online and physical store sales in the category rose 5.6%, following a 2.4% gain in 2015.

—Andria Cheng

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