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The Big Spenders of 2017
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By: Darrin Duber-Smith

 

Although the holiday buying season isn't yet finished, the bulk of the shopping has been done. And it looks like the economic gains of 2017 (combined with the fact that Americans are saving less than in previous years) have enabled the best Christmas in recent memory for a beleaguered retail sector.

 

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Consumer holiday spending is up almost 6% from last year, far above any of the estimates, and even department stores are doing well this holiday season, with a 3.6% increase in revenue over last year. And unlike 2016 when retailers were stuck with too much leftover stuff , brick-and-mortar operators are doing a much better job at managing inventories this year, which means fewer items offered at steeply-reduced prices. 

 

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All of this is very good news for relatively healthy retailers like Kohl's and Macy's, but it's really good news for the likes of Sears, J.C. Penney's and other brands that many observers believe might soon be dead. The healthy brick-and-mortar survivors will be the stores that successfully and seamlessly integrate online and in-store merchandising, offer the right mix of products to the right market segments, and provide superior sensory experiences for their customers. Many experts believe that the U.S. has far too many retail locations for its population and that at least 25% of the current retail space will likely be gone in 10 years or so; but e-commerce is still only 11% of total retail sales, which suggests that brick-and-mortar and e-commerce will eventually achieve a healthy balance. And an economy that continues to improve? That certainly helps too.

 

Discussion: Are you surprised that e-commerce is still only 11% of total retail sales? Are you spending more this holiday season?