Wednesday, October 2, 2019
Volume 2, Issue No. 18

How Retailers Can Win this Holiday Season

Despite an upcoming Holiday 2019 season six days shorter than last year, early forecasts project stronger growth than in 2018. This suggests that recession fears, as well as the ongoing U.S.-China trade war and the smaller consumer buying window, will not negatively impact elevated consumer confidence. Still, it appears retailers’ approach to the important selling season will determine their ultimate sales and profit success for the two months ending Dec. 31. Those who concentrate on seamless experiences, keeping out-of-stocks to a minimum and delivery speed to the shopper will be the biggest winners. Same-day home delivery service store pick-up availability and discounts for picking up order rather than having it shipped should all contribute positively to seasonal sales growth.

“Retailers will be trying to stretch the season on both ends,” proclaimed Rob Garf of Salesforce, speaking on a Retail Touchpoints webinar last week. “A late start [Thanksgiving is Nov. 28)] will electrify the season and lead to retailers creating more ‘early’ moments.”

Deloitte’s annual holiday sales forecast, revealed last week, is calling for 4.5 to 5.0 percent topline growth this year, up from 3.1 percent in 2018, and a 14 to 18 percent year-over-year increase in e-commerce sales, up from 11.2 percent last year, to a range of $144 to $149 billion. Global consulting firm AlixPartners pegs holiday sales growth at 4.4-5.3 percent but is also cautious given current geopolitical concerns.

Given the shorter buying season, Garf sees traditional brick-and-mortar stores as the “Digital VIPs” this year as “Buy Online, Pick Up In Store” (BOPIS) programs will help extend the digital buying season. He also suggests more shopping will move “closer to the edge” as an estimated 9 percent of shoppers make a holiday purchase from emerging digital channels. As for the Gen Z consumer, Retail Touchpoints data shows that 37 percent of Gen Zers see Instagram as their preferred source for holiday inspiration this year.

Rod Sides, Vice Chairman of Deloitte LLC, who heads the firm’s retail and distribution unit, cites consumer disposable income and spending indicators as the key indicators of the season’s growth. The Bloomberg Economic Surprise Index hit an 11-month high and its first positive number of 2019 on Sep. 19 after reports on existing home sales and jobless claims exceeded expectations.

But not all are convinced about the bullish holiday season forecasts, including Wells Fargo analyst Ike Borucho who thinks weather issues, the fewer number of buying days and lower tourist spending could potentially hamper U.S. holiday retail sales.