by Dwight D. Hill, McMillan Doolittle LLP
The air is crisp, the holiday trim boutiques have been up for weeks, and the cottage industry of sales predictions by all the pundits is well in gear. Holiday sales predictions this year are coming in around +4% depending on your source, slightly less than last year's 5.2% gain. Will this holiday season be frightful or delightful for retailers? It's anyone's guess, but we offer a list of facts retailers need to be aware of going into Holiday 2015.
1. Get the turkey on the table early. Better start planning Thanksgiving "lunch" versus "dinner" going forward – if you aren't already planning to open your stores on Thanksgiving Day, you soon will be. While many naysayers will trumpet the sanctity of the holiday has been lost, the shopper has proven over the past two years they have no problem spending Thanksgiving evening on a mad dash for deals. We all know the retail institutions of "Black Friday" and "Cyber Monday" are rapidly vanishing into an endless caldron of promotions that blur the entire holiday season. Yet shoppers enjoy the thrill of this kick-start to the holiday season. Thus, the Thanksgiving afternoon/evening openings are here to stay and the number of retailers participating will continue to grow. Retailers: Eventually you will be forced to seriously consider this dreaded Thanksgiving opening if you haven't already.
2. Every day counts: we have a few extra days this holiday season. Just two years ago we witnessed some of the highest levels of promotional activity on record. Holiday 2013 presented the fewest shopping days since 2002 with 26 shopping days between Thanksgiving and Christmas. To make matters worse, Mother Nature provided her own gift in the form of two major winter storms that socked in much of the Midwest and Northeast during two key shopping weekends. As a result, retailers panicked and it turned out to be one of the most promotional in history – shoppers were treated to 30%, 40%, or even 50% off their entire purchases during the last 12 or so shopping days before Christmas – not to mention clearance events that were moved up into the holiday period. It was the shopper's paradise that year!
Now, another holiday season is upon us, and in case you've not checked your calendar, there are 28 days between Thanksgiving and Christmas, giving retailers a few more days to woo shoppers. Even with these extra days, we are likely in for another wild ride as retailers attempt to grab as much of the shopper's wallet as possible through an almost never-ending sea of promotions. Retailers: What is your contingency plan during this 28 day period if sales start to decline?
3. The evolution of the store will continue and likely be more pronounced over the holidays. Store traffic has continued to decline as e-commerce continues to take on a larger portion of retailers' businesses, yet shoppers still like stores, using click and pick up tools as a convenient way to shop between both channels. We will continue to see more pop-up stores as e-commerce brands take advantage of high traffic locations and install temporary physical locations. In addition, the mobile device continues to be the shopping tool of choice as shoppers seek out product and pricing information, store locations, and comparison shop. The takeaway? Is your omni-channel customer journey well thought out and tested from your customer's point of view? Have you thought through ways to extend your brand through new pop-up locations or brand alliances? Fail in these areas and you will lose out to the competition.
Will we see the positive sales increases the retail sages are predicting? It's anyone's guess, but as long as the consumer feels confident, this season certainly promises to be an interesting ride. Retailers: It's now up to you to deliver!
Dwight D. Hill, whose background includes leadership roles with Neiman Marcus and Deloitte LLP, is Partner, McMillan Doolittle LLP. Dwight can be reached at firstname.lastname@example.org. Learn more about our services and perspectives on retail by visiting us at www.McMillanDoolittle.com.
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