Bah Humbug! Ad Spending Falls 13% for Retailers This Holiday

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JC Penney's holiday website
JC Penney's holiday website Credit:

With less than 10 days 'til Christmas, we've entered the homestretch of the holiday shopping season, but so far, retailers aren't spending as much on advertising as they did in 2015. During the three-week period of Nov. 21 through Dec. 11, advertising among major retail chains was down 13% to $1.08 billion over the year-earlier period, according to a new report from Kantar Media.

Kantar, which analyzed preliminary results from traditional and digital media, earned social and paid search ads, also specified the declining popularity of newspaper print ads as an advertising vehicle for retailers. The ad spending fallout was led by electronics chains, which spent 32% less than last year, and discount and department stores, which spent 25% less. The report also said paid search ads are replacing print, while mobile search and loyalty apps like Target's Cartwheel program are also gaining in use.

Such a shift in spending is logical considering the continual gravitation of shoppers online. Over the Thanksgiving shopping weekend, the kickoff to the holiday period, 108.5 million consumers bought electronically, while only 99.1 million made their purchases in stores, according to the National Retail Federation. On Cyber Monday, sales totaled $3.45 billion, a record, according to Adobe.

After a warmer-than-expected winter last year led to mass fallout in sales, retailers have been taking no chances this year with deep discounts and heavy promotions. On Friday, JC Penney welcomed "last minute shoppers" with an email blast promoting its Super Saturday, or Dec. 17, deals. Many brands have also offered app-specific deals in order to drive more loyalty and adoption. The NRF is predicting holiday sales will rise 3.6% this year.

A colder December has already been a boon for apparel retailers. The chillier weather should generate a $243 million sales uptick for clothiers, as shoppers open their wallets for parkas, hats and gloves, in the first half of the month, according to the Weather Co., which develops forecast tools for businesses and cites estimates from industry analysts.

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