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5 Things Retailers Need to Consider Heading Into the 2018 Holiday Shopping Season

Posted on by katiecmorgan
NASDAQ  November 16, 2018, 

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For most retailers, the 2018 holiday shopping season will present their biggest opportunity of the year to engage with customers. It will also represent the bulk of their annual sales.

As a result, this time of year is crucial for retailers to achieve success. With that in mind, current conditions make this holiday shopping season look positive for retailers.

1. Consumers Are Upbeat About Spending 

From what we’ve seen, customers are excited about shopping this year.

Brick-and-mortar sales will grow 1.4 percent and online growth is expected to reach 14 percent, according to Forrester Analytics: Online Holiday Retail Sales Forecast, 2018 (U.S.). Various studies also show that the average U.S. consumer will spend more during the upcoming holiday season, jumping from $1,226 per consumer to $1,536.

Deloitte’s annual holiday economic forecast looks great for retailers as well. Consumers seem confident about the economy, their household financial situations, and their spending plans for the upcoming holiday season.

Deloitte’s consumer survey shows online spending continues to grow and is expected to account for 57 percent of all purchases. Also, Deloitte’s research notes that shoppers are enthusiastic about the holiday season and remain price- and value-focused.

Based on the report, retailers are in a good spot to influence where consumers shop this year as many shoppers are entering the season undecided.

2. Thanksgiving is Coming Early

Consumers are doing their holiday shopping earlier based on a study by Bazaarvoice. An early Thanksgiving helps spread the holiday shopping theme to consumers.

Thanksgiving is as early as it can be this year (Nov. 22) which could prove helpful to retailers. Sixty percent of consumers say they begin their holiday shopping before Thanksgiving . This is particularly important this year because there will be 33 days between Thanksgiving and Christmas.

Retailers have that much more time to fully engage consumers this holiday season. Although spending will increase this holiday season, retailers must be conscientious when it comes to identifying their best customers who are most likely to spend the most.

It appears that consumers look forward to spending early for their holiday shopping . This fact, combined with the Thanksgiving retail shopping period that includes Black Friday and Cyber Monday, means brands need to be prepared for this critical holiday shopping period around Thanksgiving.

3. The Strong Economy Will Help Retailers

Consumers are confident about the economy for several reasons. National Retail Federation President and CEO Matthew Shay cited some of these factors .

“Thanks to a healthy economy and strong consumer confidence, we believe that this holiday season will continue to reflect the growth we’ve seen over the past year,” Shay noted.

Holiday sales in 2017 totaled $687.87 billion, a 5.3 percent increase over 2016 and the largest increase since the 5.2 percent year-over-year gain seen in 2010 after the end of the Great Recession.

“Last year’s strong results were thanks to growing wages, stronger employment, and higher confidence, complemented by anticipation of tax cuts that led consumers to spend more than expected,” NRF Chief Economist Jack Kleinhenz said. “With this year’s forecast, we continue to see strong momentum from consumers as they do the heavy lifting in supporting our economy. The combination of increased job creation, improved wages, tamed inflation and an increase in net worth all provide the capacity and the confidence to spend.”

All of these strong macroeconomic factors have contributed to one of the best consumer discretionary spending environments in years .

Consumer confidence in the economy is a powerful thing during the holiday season, which places retailers in an ideal situation to enhance engagement and retention levels.

4. Retailers Can Make the Holiday Season a Memorable One

Retailers can take advantage of the favorable economy and positive consumer sentiment through customer insights data during the holiday season.

Preparation for the holiday season is imperative for retailers. One under-the-radar element of holiday preparation for retailers should be website performance.

Whether it is a brick-and-mortar store or an ecommerce site, online presence marks the essence of every business strategy today. Checking website performance, load time, application performance testing, application load test, and much more are quickly becoming inevitable for commercial success.

All these factors play a vital role, especially during the high-pressure holiday season when every small or big portal is trying to grab maximum profits from the market.

During the holiday season retailers need to ensure that store associates are well versed and excited about the loyalty programs they will be promoting.

5. Customer Engagement Shouldn’t End with the 2018 Holiday Shopping Season

The holiday season is a great time to engage and create new customers, but what happens after that? One of the strategies a retailer can use to achieve this goal is a loyalty program.

There are thousands of loyalty programs out there, but consumers are drawn to ones that are simple and offer real value.

A new study shows  that 40 percent of customers who refrain from signing up for loyalty programs do so because the value of being a loyalty member is not worth the time, money, or effort of signing up. And for those who sign up, 76 percent do so to qualify for special promotions.

Retailers should take note of these statistics and evaluate special offers for loyalty members to ensure that their promotions are competitive and offer value.

Effectively leveraging a loyalty program during the holiday season can go a long way toward retaining customers in the long run. That customer engagement during the holiday season should continue in the New Year to bolster your consumer relationships.

Loyalty program signup is important throughout the year, but it takes on added importance and relevance during the holiday season.

Happy Holiday Shopping Season

If brands listen to their customers, identify their pain points, and meet their expectations, they can build solid two-way relationships that extend well beyond the holiday season.

Given the fact that consumers are upbeat about spending in a strong and vibrant economy, retailers can and should take advantage of the early Thanksgiving and make this holiday season a memorable one through increased customer engagement, more promotions around value-driven loyalty programs, and ensuring that store associates are proficient in your key brand messaging.

Creating memorable moments is a huge part of the holiday season.

Focus on your customers and enjoy a Happy Holiday Shopping Season!

11:06:55 AM EDT By 

Retailers Should Have a Happy Holiday Season

Posted on by katiecmorgan

Barrons Vito J. Racanelli

The Amazon threat still hangs over many bricks-and-mortar retailers, but the coming holiday season should be a happy one for most, according to projections from the National Retail Federation.

The NRF said Wednesday it expects retail sales in November and December—excluding automobiles, gasoline and restaurants—to increase between 4.3% and 4.8% over the year-ago period, or to about $717.5 billion to $721 billion, says NRF chief economist Jack Kleinhenz. The sales rise projected compares with an average annual holiday season gain of 3.9% over the past five years.

Could the tariffs ruin the holidays for shoppers?

Posted on by katiecmorgan
Washington Post
By Rachel Siegel

October 3

“Get out the Ouija board.”

That’s how one retail analyst summed up the tricky task of predicting what lies ahead for retailers and shoppers this holiday season. Analysts say there’s ample reason to expect record-breaking sales on the back of a strong economy, a historically low unemployment rate and upward-ticking wages.

But that’s all hedged by a hefty unknown: the threat of ongoing tariffs and an escalating trade war. President Trump’s latest round of tariffs have kicked in at 10 percent and are set to rise to 25 percent at the start of 2019. Nearly 6,000 products — including electronics and other go-to gifts — will see price increases that, in time, are expected to pass from retailers to consumers.

And while it’s unlikely that the brunt of those price hikes will take a toll over the next few months, experts agree that the sheer concern over how long the tariffs will last, and to what degree, could act as a Grinch to holiday shoppers.

“Business doesn’t manage uncertainty well, nor does the consumer, and there is no way prices don’t get passed through the consumer,” said Mark Cohen, director of retail studies at Columbia Business School. “The problem I have is, who knows on a day-to-day basis where this is headed?”

The retail industry is still optimistic. On Wednesday, the National Retail Federation announced it is expecting retail sales in November and December to increase between 4.3 and 4.8 percent over 2017 results, to as much as $720.89 billion. That forecast compares with an average annual increase of 3.9 percent over the past five years. (If Labor Day is any indicator, Americans spent a record $2 billion online then alone.)

But for comparison, holiday sales in 2017 rose 5.3 percent over the year before, totaling $687.87 billion, according to the NRF.

In mid-September, Deloitte anticipated retail holiday sales to increase 5 to 5.6 percent over last year’s shopping season — totaling at least $1.1 trillion between November and January. Rod Sides, leader of Deloitte’s U.S. retail and distribution practice, said shoppers are unlikely to make their shopping decisions based on geopolitical issues, such as global trade.

“A lot of it comes down to when they look in their checkbook or their pocket,” Sides said. “If they have a few extra dollars, whether it be the stock markets to the election to tariffs, it typically doesn’t trickle down.”

[‘This could be catastrophic’: Small businesses say new tariffs will make it even harder to compete]

At the same time, retailers and industry groups have made their opposition to the tariffs clear. Last month, Walmart sent a letter to U.S. Trade Representative Robert E. Lighthizer cautioning that additional tariffs on $200 billion of Chinese goods would strike a blow. Walmart — the largest retailer in the country — wrote that the “immediate impact will be to raise prices on consumers and tax American businesses and manufacturers.” Target chief executive Brian Cornell said the company was “concerned about anything that would cause higher prices on everyday products for American families.”

That’s in concert with arguments from industry groups that say the tariffs will trigger price increases, even if not by this Thanksgiving or Christmas. The Retail Industry Leaders Association, an industry lobbying group, wrote to Lighthizer in September requesting the removal of more than 650 tariff lines from the proposed list of products subject to the latest wave of tariffs. Any tariffs on consumer goods proposed by Trump’s administration, the group wrote, are “nothing more than a hidden tax.”

Larger retailers have long since secured low-priced inventory to get them through the holidays and into the new year. But Hun Quach, vice president for international trade at RILA, noted that as the Chinese tariffs drag on, businesses large and small will be forced to restructure their supply chains. Changing the source on products as simple as plastic stickers can take as long as a year, she said.

“The pricing impact won’t hit immediately,” she said. “I think a lot of this uncertainty is about how long these tariffs are going to be in place.”

There’s also the question of whether retailers, embracing a strong economy and shoppers with money to spend, could increase prices anyway. But Cohen said that, even with signs pointing toward a strong holiday season, “the prospect of raising prices across the board is extremely problematic. There’s no getting away with that.”

Still, retailers will have to grapple with questions of when to time price increases on goods that will feel the full brunt of the tariffs at the start of 2019.

“Do you start to adjust prices now or do you wait until January?” Cohen said. “That’s a difficult decision.”

Mark Rosenbaum, department chair and professor of retailing at the University of South Carolina, said that many retailers placed their holiday-season orders over the summer, and that it would be unusual for them to alter the prices now because of the tariffs.

Jack Kleinhenz, chief economist at the National Retail Federation, noted that many of the tariffs apply to goods that have “already been ordered, and have been shipped and are on their way.” The “precise effects of the tariffs are not yet completely clear,” but any impacts are likely to hit closer to the start of 2019. The tariffs may hit prices for jewelry by Valentine’s Day, for example, but that may be the earliest shoppers will feel a difference.

In the meantime, retailers and shoppers will have reason to stay merry.

“Thinking about the ability to spend — the data shows that we are in a good place,” Kleinhenz said. “The picture looks very good.”

U.S. retailer group sees 2018 holiday sales up more than 4 percent

Posted on by katiecmorgan

NEW YORK (Reuters) – U.S. holiday sales in 2018 will increase 4.3 percent to 4.8 percent boosted by a strong economy but will be slower than a year ago when consumer spending surged to a 12-year high, according to a forecast from a leading retail industry group.

The National Retail Federation (NRF) said holiday sales growth will be higher than an average increase of 3.9 percent over the past five years but slower than the 5.3 percent growth witnessed a year earlier when consumer spending grew the most since 2005 and was boosted by tax cuts.

“Last year’s strong results were thanks to growing wages, stronger employment and higher confidence, complemented by anticipation of tax cuts that led consumers to spend more than expected,” NRF Chief Economist Jack Kleinhenz said.

“With this year’s forecast, we continue to see strong momentum from consumers as they do the heavy lifting in supporting our economy,” he said.

The combination of more jobs, improved wages, tamed inflation and an increase in net worth all provide the impetus to spend, he added.

The retail trade group said it expects sales for the last two months of the year between $717.45 billion and $720.89 billion, excluding autos, gasoline and dining out. Holiday sales in 2017 were $687.87 billion.

NRF’s forecast is one of the most closely watched benchmarks ahead of the holiday season, when retailers like Amazon.com Inc, Walmart Stores Inc and Target Corp generate an outsized portion of their profits and sales.

The last two months of the year can account for 20 percent to 40 percent of annual sales for many retailers.

The NRF forecast follows other estimates from companies like AlixPartners, which says sales will grow in between 3.1 percent and 4.1 percent as “2017 will be a tough year to follow.” Forecasts from companies like Deloitte and PwC expect holiday retail sales to grow around 5 percent.

NRF also said Wednesday that it expects seasonal employment by retailers to reach between 585,000 and 650,000 jobs, up from 582,500 in 2017.

Shoppers expected to give retailers a holly, jolly holiday season as they buy a bit more

Posted on by katiecmorgan

, USA TODAY Oct. 3, 2018

Shoppers, buoyed by low unemployment and a slight uptick in wages, should make this a jolly holiday season for retailers, an industry trade group predicted Wednesday.

The National Retail Federation, an industry trade group, forecasts that sales in the last two months of this year should rise between 4.3 to 4.8 percent as compared to the holiday period in 2017.

Not counting purchases of cars, gas, or meals at restaurants, shoppers are expected to spend between roughly $717 billion and $720.89 billion in sales this year. The sales increase also tops the 3.9 percent average annual uptick the industry has seen in the last five years.

The forecast underscores the message from many retailers that the brisker sales they’ve reported in recent quarters are not a fluke. Shoppers spent $687.87 billion on purchases during last year’s holiday season, a 5.3 percent bounce over the previous year, and the biggest bump since 2010.

“Our forecast reflects the overall strength of the industry,” Matthew Shay, NRF’s president and CEO said in a statement. “Thanks to a healthy economy and strong consumer confidence, we believe that this holiday season will continue to reflect the growth we’ve seen over the past year. While there is concern about the impacts of an escalating trade war, we are optimistic that the pace of economic activity will continue to increase through the end of the year.”

Giving gifts is great, especially if you can borrow the present later for yourself. Buzz60′ Tony Spitz has the details. Buzz60

National unemployment stands at 3.9 percent, close to an 18-year low. “The combination of increased job creation, improved wages, tamed inflation and an increase in net worth all provide the capacity and the confidence to spend,” said Jack Kleinhenz, NRF’s chief economist.

NRF expects that overall retail sales for this year to be at least 4.5 percent higher than 2017.

Retail sales gain is a sign tax reform may be working

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Retail winners and losers in 2018

Consumers are increasing their spending, which may be a plus for the stock market during a period of volatility. U.S. retail sales rose in March more than forecast after three straight monthly declines, with consumers buying more big-ticket items. This evidence of healthy sentiment could drive markets higher in the second quarter.

Retail sales increased 0.6% in March after a 0.1% drop in February, the Commerce Department reported on Monday. The January retail data was revised down to show that sales declined by 0.2%, steeper than the previously reported 0.1% dip.

Economists polled by Reuters had forecast that retail sales would rise by 0.4% in March. Year-over-year, retail sales increased 4.5%.

There have been hopes that with many Americans seeing their paychecks increase because of tax cut savings, consumer spending would climb. Such an increase, in turn, would be good for the economy overall, with more than two-thirds of U.S. economic growth attributed to consumer spending.

“These are strong numbers, no doubt surging from the shot in the arm tax reform provided,” said Mike Loewengart, vice president of investment strategy at E*Trade. “Consumers are seeing more in their paycheck, and it appears they’ve gone shopping—certainly good news for investors.”

Stock markets have gone through a volatile period and are seeking direction.

“With most earnings reports arriving in the next few weeks, this is a pivotal time for a market that is in search of something positive to latch on to,” Loewengart added. “It appears, at least at the moment, strong economic fundamentals just simply aren’t enough to fire the bull rally back up.”

National Retail Federaton Chief Economist Jack Kleinhenz called the retail sales report a “healthy spending report” despite market volatility, unseasonable weather and uncertain economic policies. “Consumers continue to show resiliency in spending, and these numbers reflect how the economy is performing with a strong job market, gains in wages, improvements in confidence, rising home value and judicious use of credit,” he said.

By RetailFOXBusiness

NRF: March Retail Sales Climb 5%, Three-Month Average Jumps 4.8%

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The March results build on the higher sales seen in February, which was up 0.2% over January and 4.3% year-over-year. These numbers exclude sales of automobiles and at gasoline stations and restaurants.

The NRF numbers are based on data from the U.S. Census Bureau, which said overall March retail sales — including automobiles, gasoline and restaurants — were up a seasonally adjusted 0.6% from February, and up 4.5% year-over-year.

“This is a healthy spending report despite market volatility, unseasonable weather and uncertain economic policies,” said NRF Chief Economist Jack Kleinhenz in a statement. “Consumers continue to show resiliency in spending, and these numbers reflect how the economy is performing with a strong job market, gains in wages, improvements in confidence, rising home values and judicious use of credit. The biggest risk to spending is in market fluctuations that could affect confidence, but we expect these basic improvements in economic fundamentals to continue.”

All sectors except sporting goods saw sales improvements in March on a year-by-year basis. Sporting goods stores saw sales declines of 0.9%.

  • Online and other non-store sales: up 7.6%;
  • General merchandise: up 6.3%;
  • Clothing and clothing accessories: up 6.1%;
  • Grocery and beverage: up 5.9%;
  • Furniture and home furnishings: up 4.1%;
  • Building materials and garden supplies: up 3.8%;
  • Electronics and appliances: up 1.6%; and
  • Health and personal care: up 0.4%.

Retail sales are up in April

Posted on by katiecmorgan

Retail sales data issued today by the United States Department of Commerce and the National Retail Federation (NRF) showed modest sequential gains and varying annual gains.

Commerce reported that April retail sales were up 0.3% annually at $497.6 billion and 0.8% ahead of March’s $496.1 billion. It also noted that total retail sales from February through April were up 4.6% annually.

April also represents the second straight month of retail sales gains, as March snapped a three-month stretch of declines from December through February.

Commerce reported that retail trade sales were up 0.4% in April over March and 4.8% annually. Non-store sales, which include e-commerce, saw a 9.6% annual gain. Furniture and home furniture sales were up 6.1% annually, and electronics ad appliance store sales were up 1.7%.

The NRF reported that April retail sales increased 0.4% on a seasonally adjusted basis compared to March and were up 2.8% annually. NRF’s data excludes retail sales from automobiles, gasoline stations, and restaurants.

“Retail sales growth remains solid and on track as households benefit from tax cuts even though they have faced unseasonable weather and bumpy financial markets,” NRF Chief Economist Jack Kleinhenz said. “The tax cuts and higher savings levels should help consumers afford the recent surge in gasoline prices. And a solid job market, recent wage gains and elevated confidence translate into ongoing spending support.”

NRF’s three-month moving average through April saw a 4.1% annual increase, which matches up with the organization’s estimate of 2018 retail sales rising between 3.8%-4.4% annually.

Various retail sectors saw solid performances in April based on NRF data, including:
● Online and other non-store sales were up 12.2 percent year-over-year and up 0.6 percent over March seasonally adjusted
● Furniture and home furnishings stores were up 5.8 percent year-over-year and up 0.8 percent from March seasonally adjusted
● Building materials and garden supply stores were up 5.6 percent year-over-year and up 0.4 percent from March seasonally adjusted
● Electronics and appliance stores were up 2.2 percent year-over-year but down 0.1 percent from March seasonally adjusted

April retail sales jump 0.4% as e-commerce climbs 9.6% from last year

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Dive Brief:

  • Retail sales in April (excluding sales from auto dealers, gas stations, building materials and food services) rose 0.4% from March 2018, according to the latest monthly report from the U.S. Commerce Department’s census bureau. March sales were revised upward to a 0.8% rise, from the previously reported 0.6%.
  • Nine of the 13 major retail categories posted positive sales results in April compared with March, according to retail think tank Coresight Research’s breakdown of the report. Clothing and accessories rose 1.4%, furniture sales rose 0.8% and e-commerce rose 0.6%. But health and personal care sales fell 0.4%, and electronics and appliance sales fell 0.1%, the Census Bureau said.
  • E-commerce sales in the period rose 9.6% from last year, while overall retail sales excluding auto rose 4.8% year over year, according to the government’s report.

Dive Insight:

April marked another month of robust sales for retailers, despite a cold spring in many parts of the country, thanks to an overall healthy economy.

“Spending was sluggish at the start of 2018, but April marked the second consecutive month of growth,” according to a report from Coresight CEO Deborah Weinswig. “More broadly, consumer spending has been lifted by a falling unemployment rate, which in April was a historically low 3.9%. Measures of consumer confidence have remained high in recent months, which economists attribute to the recent tax cuts, a healthy labor market and broader economic growth.”

And tax cuts could help mitigate the rise in gas prices this year, according to NRF Chief Economist Jack Kleinhenz.

“Retail sales growth remains solid and on track as households benefit from tax cuts even though they have faced unseasonable weather and bumpy financial markets,” Kleinhenz said in a statement emailed to Retail Dive. “And a solid job market, recent wage gains and elevated confidence translate into ongoing spending support.”

But it’s worth looking at just where shoppers are spending the most: As first quarter reports have come in for 39 retail chains tracked by Retail Metrics, retail earnings are up 15.8% year over year, with just four retailers accounting for all that reported growth. Drugstore chains CVS and Walgreens both turned in “sizeable” first quarter surprises that accounted for about 300 basis points of reported earnings growth, according to a Retail Metrics note emailed to Retail Dive. Costco was responsible for another 300 basis points of earnings growth and Home Depot, which reported a 20% year-over-year first quarter operating income boost this week, is responsible for 1,000 basis points.

Without Home Depot, CVS, Walgreens or Costco however, reported Q1 retail earnings fell 0.7%, according to Retail Metrics.

E-commerce continues to outpace in-store sales, according to two indices of U.S. retailers from ProShares, measuring year to date sales through market close on May 14. The Solactive-ProShares Bricks and Mortar Retail Store Index (which includes leading legacy retail companies) fell 3.08%, while the ProShares Online Retail Index (which tracks tracks U.S. and non-U.S. retailers primarily selling online or through other non-store channels with a market capitalization of at least $500 million, including Amazon) rose 19.26%.

Retail Sales Inch Up in April

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The National Retail Federation said that retail sales in April showed a 2.8 percent year-over-year increase in the U.S retail market, excluding auto sales, gasoline stations and restaurants.

“Retail sales growth remains solid and on track as households benefit from tax cuts even though they have faced unseasonable weather and bumpy financial markets,” said Jack Kleinhenz, the chief economist for the National Retail Federation, based in Washington, D.C. “The tax cuts and higher savings levels should help consumers afford the recent surge in gasoline prices. And a solid job market, recent wage gains and elevated confidence translate into ongoing spending support.”

The NRF broke down April results for different retail categories. Results were mixed for apparel stores. Sales for clothing and clothing-accessory stores dipped 0.4 percent in a year-over-year basis. However, April apparel sales were up 1.4 percent compared to the previous month.

Online and other non-store sales were up 12.2 percent in a year-over-year comparison. Compared to the previous month, sales increased 0.6 percent for e-retailers.

Ken Perkins, president of the market-research group Retail Metrics, also posted a recent note saying business was good in April. He said that expectations for the month had been low because cold weather was predicted for much of the U.S. Wall Street analysts also forecast that many consumers may have been suffering from shopping fatigue. The nation’s retailers experienced a spike in business because Easter took place on April 1.

In Perkins’s research note, he discussed the April performance for L Brands, the parent company of Victoria’s Secret and Bath & Body Works. Bath & Body Works reported a 6 percent same-store-sales gain during April. Victoria’s Secret posted a 2 percent decline.