As retailers ready for the most wonderful time of the year (at least in terms of revenues), analysts have been equally busy forecasting what’s to come for the holiday season.
And while some of these predictions might seem obvious — shoppers are buying more stuff online, some still like to go to stores — the latter months of the year are important not only because of the outsize impact they have on companies’ bottom lines but also because they tend to be harbingers of what’s to come within the industry. So, naturally, executives are paying close attention long before Black Friday rolls around.
Here are five ideas that are poised to shape the season:
Optimistic consumers are ready to spend.
Consumer confidence hit an 18-year high in October, and holiday spending is likely to reflect this sunny mood. The National Retail Federation predicts an increase of 4.3 and 4.8 percent in holiday retail sales in November and December over the same period last year, for a total of between $717.45 billion and $720.89 billion.
On a per-household basis, consumers said they would spend an average of $1,007.24, up 4.1 percent from last year’s $967.13, according to the annual survey the trade association conducts with Prosper Insights & Analytics. And while the recent stock market correction, which saw benchmark indexes fall between 5 and 10 percent in October, may take some wind out of the economy’s sails, unemployment remains at a near 50-year low, and the average consumer is unlikely to change their shopping plans as long as they’re feeling flush.
Even the financial services firm Moody’s, which has not been bullish on the U.S. retail sector since July 2015, changed its outlook to positive at the end of last month, predicting 5 to 6 percent growth in sales during the holiday season.
Omnichannel options are more important than ever.
Services like buy online, pick up in-store and buy online, ship to store are increasingly becoming table stakes for larger retailers that want to compete with the likes of Amazon for consumers’ dollars during the holiday season. Per the NRF, 50 percent of shoppers said they planned to pick up their online purchases in stores, and retailers are making it easier to do so.
Kohl’s, for instance, recently rolled out a ship-to-store program across all its stores, and is offering $5 in Kohl’s Cash as an incentive for online shoppers to pick up their orders in person during the holiday season. Macy’s, Target, Walmart, Nordstrom and DSW have also found success in investing in BOPIS in order to leverage their brick-and-mortar stores.
According to The NPD Group Inc., a market research company, 6 in 10 consumers will shop both online and in brick-and-mortar stores this year, an increase of 3 percentage points over 2017.
More shopping is going mobile.
We already know that online shopping is gaining market share each year, but it’s also worth looking at the devices that consumers use to buy: according to Deloitte’s annual holiday survey, 67 percent of e-commerce shoppers will make purchases on their phones this holiday season, up from 59 percent last year. With more than half of consumers’ total spend going online (57 percent, per the consulting firm’s research), the opportunity to attract purchasers while they’re on the go is significant.
Early-bird shoppers will show up in droves.
60 percent of consumers surveyed by Deloitte said they planned to start their shopping before Thanksgiving, and this eager group will spend 28 percent, or $370 more than their procrastinating peers.
Natural Insight, a retail execution and workforce management platform, likewise found that November shopping is becoming more popular among in-store shoppers, ticking up 10 percentage points from last year to account for 47 percent of all holiday shopping.
The biggest sales events will continue to draw crowds.
Black Friday and Cyber Monday are still major traffic and sales drivers for retailers across the country, with the former ranking first among the busiest shopping days of the holiday season in stores, according to data analytics firm ShopperTrak.
This year may see an even higher turnout than 2017, as Natural Insight found that 20 percent of November shoppers said they planned to do their holiday shopping on Black Friday, compared with 15 percent last year.