U.S. forecasters bet Christmas shoppers will spendmore
Sure, it’s barely autumn. You’ve only recently sent your kids back to school and ordered your first pumpkin spice latte of the season.
But for big retailers, the countdown to Christmas is already well underway.
In the last week or so, we’ve begun to see a trickle of forecasts and news tidbits that offer hints about how the all-important holiday shopping season is going to shape up. Here, we round up some of the key take-aways.
Forecasters think this year will be better than 2015.
Deloitte, a consulting firm, predicts U.S. sales will grow this holiday season between 3.6 and four per cent. Another consultancy, Alix-Partners, estimates the industry sales will tick up between 3.3 and four per cent.
That kind of performance would stack up favourably to last year, when the National Retail Federation reported the industry notched three per cent growth.
This year, analysts are noting that the U.S. economy has broadly continued to improve, and that should encourage people to shop.
There are tea leaves to read in retailers’ plans for their seasonal workforces.
Several big chains already have announced how many temporary workers they’ll add to get through the holiday crush.
Macy’s plans to hire 83,000 employees, while Target is moving to add 70,000 store workers and an additional 7,500 people in its ecommerce warehouses.
What’s most noteworthy about these numbers is that they are barely changed from last year. This suggests these big-name stores aren’t expecting any particularly dramatic swings in sales or traffic.
What’s perhaps more interesting than the headline hiring numbers is the fact Macy’s and Target are bumping up their holiday-season hiring for their e-commerce warehouses.
For example, Macy’s had about 12,000 temporary workers in distribution centres last year.
This year, the company is boosting that to 15,000. That’s a clue they expect online, not stores, to be the key driver of sales growth.
Keep an eye on mid-size retailers. Forecasters from Deloitte say these players may present strong competition to big-boxes this year.
While Deloitte did not call out specific retailers it expects to do well, mid-size companies include the likes of men’s apparel chain Bonobos or skin care brand Aesop.
“This group has been collectively taking share from large, traditional retailers to the tune of US$200 billion in annual sales over the last five years,” said Rod Sides, Deloitte’s retail sector leader.
The U.S. presidential election could play a role — albeit a small one.
Analysts suggest the election could shake up the rhythm of when people hit the mall. RetailNext said it expects to see “variability” in early November because of the contest, and Deloitte predicts the event will serve as a “temporary distraction.”
Store traffic is likely to decline — but that might not be all bad.
RetailNext, an in-store analytics company, says it expects brickand-mortar store traffic to be down 11 per cent in November and five per cent in December compared to the same months last year.
That may seem like a no-brainer, since people are continuing their steady march toward buying more gifts online.
And yet there’s more to it. RetailNext also projects that conversion — a measure of when a shopper goes from browsing to buying — will be up 0.5 per cent this year, and will contribute to a 6.5 per cent increase in sales per shopper.
Here’s what that means: When consumers are going into malls, they won’t simply be wandering around looking for whatever catches their eye. They’ll be going with specific targets in mind, and they will only be going to stores where they know they can get them.
So while retailers may end up seeing fewer visits to their stores, the visits they do get could be end up being more productive ones.
“The Force” is still very much going to be with us. Retailers and toy reviewers are beginning to release their lists of “hot” toys for the season, and Star Wars is once again expected to be a dominant presence under the tree. Disney is scheduled to release a new film titled Rogue One: A Star Wars Story, in December, so a flood of new merchandise is slated to hit stores soon.