US re­tail Up­beat for hol­i­day Sales 2018… Learn­ings from Last Year Shap­ing Strate­gies

Learn­ings from last year shap­ing strate­gies

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There are many fac­tors that are rais­ing ex­pec­ta­tions of re­tail­ers for the up­com­ing hol­i­day sea­son from a bumper sale dur­ing the pe­riod last year to the con­tin­u­ous improve­ment in re­tail sales over this year. Re­tail ex­perts and mar­ket watch­ers be­lieve that cur­rently, con­sumer con­fi­dence in the US is high, as un­em­ploy­ment is low and wages are in­creas­ing. Ac­cord­ing to lat­est eMar­keter fore­cast, all hol­i­day re­tail sales (on­line and in-store) in 2018 will grow by 3.8% to US $ 691.9 bil­lion – though this pro­jec­tion is very pos­i­tive, but not as im­pres­sive as the 5.5% gain that US saw last year. On the other hand, Deloitte is pro­ject­ing a 5.0 to 5.6% in­crease in to­tal re­tail sales over­all for the hol­i­day sea­son.

The buzz around Christ­mas sales is start­ing ear­lier than the pre­vi­ous year, for many years now. In fact, many of the pre­dic­tions, sug­ges­tions and analy­ses for the cur­rent year’s sea­son started com­ing in as early as Jan­uary end, as soon as the fi­nal data for the past sea­son was com­piled. This is not sur­pris­ing, con­sid­er­ing that the hol­i­day sea­son is the big­gest grosser for re­tail, both off­line and on­line, and re­tail­ers work metic­u­lously to en­sure that they get a de­cent chunk of the height­ened busi­ness vol­ume. Now that we are into Oc­to­ber, the ac­tiv­ity and prepa­ra­tion for the hol­i­day sales is on full swing…, from prod­uct port­fo­lio to how best the con­sumer is en­ticed.

The first thrust is on get­ting an edge dur­ing Black Fri­day sales that falls a day af­ter the US hol­i­day of Thanks­giv­ing, which is the fourth Thurs­day of Novem­ber and is of­fi­cially re­garded as the first day of the Christ­mas shop­ping sea­son, on which re­tail­ers make many spe­cial of­fers. Of late, as a mar­ket­ing strat­egy, on­line re­tail­ers have started pro­mot­ing what is now called Cy­ber Mon­day and which falls on the Mon­day af­ter Thanks­giv­ing, as a day for ex­cep­tional bar­gains. Data from Adobe An­a­lyt­ics showed that the com­bined to­tals for Thanks­giv­ing Day and Black Fri­day 2017 were up 17.9% to US $ 7.9 bil­lion, while Cy­ber Mon­day 2017 ended up be­ing the sin­gle big­gest US on­line shop­ping day ever with US $ 6.59 bil­lion in sales – just short of the pre­dicted US $ 6.6 bil­lion, but still up nearly 17% more to that of the pre­vi­ous year.

Analysing what worked for re­tail­ers and con­sumers last year, many pre­dic­tions are be­ing made. Go­ing through the many re­ports that have emerged, three ma­jor pre­dic­tions have emerged that are be­ing en­dorsed by ev­ery re­search and mar­ket fore­caster – Hol­i­day brows­ing and buy­ing will start ear­lier than ever; On­line pen­e­tra­tion and im­pact is go­ing to get big­ger, and con­sumers ex­pe­ri­ence and not just a good prod­uct the way for­ward. Other pre­dic­tions are in many ways in­ter­linked with these three core move­ments. The go­ing is tougher for the bricks-and-mor­tar stores, but us­ing the omni-chal­lenge route ef­fec­tively can trans­late into big busi­ness for the stores. Af­ter all, Christ­mas is also about fam­ily time and do­ing things to­gether… Shop­ping is one of the ac­tiv­i­ties fam­i­lies like to in­dulge in as a run up to the fes­ti­val.

Hol­i­day brows­ing and buy­ing will start ear­lier and end much later

In the last few years, it has been ob­served that Oc­to­ber and not Novem­ber is the time when con­sumers start search­ing for deals. Re­spond­ing to this trend, many re­tail­ers from Ama­zon to Wal­mart have started of­fer­ing deals days and even weeks prior to Black Fri­day. The trend im­pacts both on­line and brick­sand-mor­tar strate­gies around the hol­i­day shop­ping week­end, ef­fec­tively ex­tend­ing the ‘big sale event’ through­out the en­tire month of Novem­ber from Black Fri­day on to the Cy­ber Mon­day and in­clud­ing Cy­ber week (the 7-day pe­riod be­gin­ning with Thanks­giv­ing).

Ac­cord­ing to Cri­teo, which works with a grow­ing net­work of over 18,000 brands and re­tail­ers across the globe and sees 1.4 bil­lion shop­pers each

month and 650 bil­lion in com­merce sales each year, Hol­i­day 2017 re­vealed an un­ex­pected op­por­tu­nity for re­tail­ers – the week be­tween Christ­mas and

New Year’s, a.k.a. ‘Cy­ber Week II’. Ac­cord­ing to a re­cent re­port by Cri­teo, be­tween De­cem­ber 26th (Box­ing Day) and De­cem­ber 30th, the US saw up to a 46% in­crease in on­line re­tail sales, which speaks vol­umes of the po­ten­tial of Cy­ber Week II. De­cem­ber 25th marks the be­gin­ning of this week, a pe­riod when shop­pers flood back to the mar­ket to take ad­van­tage of on­line deals. Gift cards in hand, they’re ready to treat them­selves in the run-up to New Year’s Day.

Dig­i­tal pen­e­tra­tion will con­tinue to dom­i­nate sales

There seems to be no U-turn to the im­mense pop­u­lar­ity that on­line shop­ping en­joys among con­sumers; it is only get­ting big­ger, by the day. Hol­i­day e-com­merce sales are ex­pected to in­crease by 15.3%, ac­cord­ing to eMar­keter’s new fore­cast. These fig­ures are very im­pres­sive, though lower than the hol­i­day e-com­merce sales in 2017 that grew by 17.8% – an in­crease that the Na­tional Re­tail Fed­er­a­tion (NRF) at­tributes to ‘grow­ing wages, stronger em­ploy­ment and higher con­fi­dence.’ How­ever, not all pro­jec­tions are as con­ser­va­tive, and Deloitte es­ti­mates that e-com­merce sales could in­crease be­tween 17-22% for the 2018 hol­i­day sea­son, which it de­fines as the pe­riod from Novem­ber 1 to Jan­uary 31. Deloitte’s healthy es­ti­mate is partly be­cause of “solid dis­pos­able per­sonal in­come growth,” says Daniel Bach­man, Deloitte’s US eco­nomic fore­caster. He adds that a strong labour mar­ket should also aid re­tail spend­ing, along with el­e­vated con­sumer con­fi­dence and a sta­ble per­sonal sav­ings rate of around 7%. Adding to the dig­i­tal buzz is the fact that in 2017, more than 40% of all on­line re­tail sales in Novem­ber and De­cem­ber hap­pened on mo­bile phones. Sig­nif­i­cantly, De­cem­ber 23, 2017 (closely fol­lowed by Christ­mas Eve and Christ­mas) was the big­gest day ever in the his­tory of mo­bile com­merce in the US with 48% of all pur­chases made on smart­phones.

Giv­ing con­sumers ex­pe­ri­ence and not just a good prod­uct is the way for­ward

The real hol­i­day sea­son isn’t about the gifts so much as the joy and mem­o­ries that they bring to fam­i­lies and friends, so cre­at­ing mem­o­ries that stay for a long time is im­por­tant. Be­ing present for the con­sumer at his con­ve­nience is gain­ing im­por­tance. Brands that can con­nect, no mat­ter at what time of the day, or the week, or sea­son or the year stand to build a se­ries of mo­ments for their cus­tomers over time – the ones that are filled with dis­cov­ery, joy, hope, ex­cite­ment, and even love. The smartest re­tail­ers and brands are build­ing long-time cus­tomer loy­alty by cre­at­ing the best, most per­son­alised cus­tomer ex­pe­ri­ences across chan­nels and de­vices. Here, be­ing omni-chan­nel is a big ad­van­tage.

As the hol­i­day sea­son nears, re­tail­ers are find­ing ways to be a part of the ex­pe­ri­ence of Christ­mas shop­ping, and with the gen­eral mood in the US econ­omy be­ing pos­i­tive, it is go­ing to be a hol­i­day sea­son to watch out for!

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