Take-aways from last year’s healthy holiday season
Last holiday season was a bountiful one for retailers across the board, and this one is anticipated to be even more profitable if common pitfalls are avoided.
The weather is finally cooling down, the leaves are beginning to change and the holiday season is fast approaching. That means it’s crunch time for retailers rethinking last minute plans to steal the spotlight.
There’s much to be gleaned from last year’s healthy season, in which sales rose 4.9% over last year — the biggest increase since 2011. Lucky for retailers, this season is slated to be even more profitable, thanks to towering consumer confidence, low unemployment and wage growth. This year, Coresight Research predicts holiday sales will rise 4% year-over-year.
“All signs are pointing even more up. The economy is strong, consumer confidence is as high as ever,” Ryan Fisher, a partner in AT Kearney’s consumer industries and retail practice, told Retail Dive in an interview. Retailers are projecting up their fourth-quarter expectations — and now they have to deliver, Fisher said.
Here’s what retailers should keep in mind this year:
It’s a promotional marathon not a sprint
Over the last several years, the holidays have managed to creep earlier and earlier. As Black Friday morphs into a week-long (if not longer) event, retailers have had to rethink their promotional strategy so that it doesn’t hinge on one blockbuster day. Spreading out promotions is tricky, but it’s worth keeping in mind when consumers shop and what for at different points in the season.
Last year, for instance, shoppers tended to buy for themselves (at a discount) early in the season, and saved gift buying for later on, Marshal Cohen, a retail industry analyst at NPD group, told Bloomberg after last holiday season in a video interview. He added that one of the biggest things he looks for as an analyst during the holidays is whether shelves are consistently stocked.
“Carrying the cost of inventory is high,” Fisher said, so retailers need to find the sweet spot between over buying and ending up in a position where they sell out too quickly. Because as consumer behavior adapts to the speediness of same-day and next-day delivery, shopping procrastination is only anticipated to get worse.
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