It should be a green Christmas for retailers this year. Various retail trade groups have predicted that holiday shopping will increase at a much faster and higher pace this year. Nothing is going to slow down holiday shopping, not even the election or the unpredictable winter weather.
On Tuesday, Oct. 4, the National Retail Federation announced that it anticipates holiday sales to increase 3.6 percent to $655.8 billion, which is higher than the postrecession average of 3.4 percent since 2009, according to the Wall Street Journal. Last year, holiday sales fell short of the NRF’s predicted 3.7 percent forecast, only coming in at 3.0 percent, with holiday sales reaching to $626.1 billion. Poor consumer confidence and bad weather was the reason shoppers stayed at home last year.
Matthew Shay, chief executive of NRF, is pretty hopeful about this year. He believes this year’s presidential election will get people to shop this holiday season.
Retail Trade Groups Forecast Strong Holiday Spending – Wall Street Journal https://t.co/FVZT9U9RSM
— Consumer Products (@ConsuProducts) October 4, 2016
“Certainly one of the candidates has done an enormous job of trying to talk down the current state of America,” Mr. Shay said. “If you believe one of those candidates, you’d think things were terrible out there and why should we spend anything.”
In addition, the International Council of Shopping Centers predicted a 3.5 percent holiday shopping increase at brick-and-mortar stores, compared to the 2.2 percent gain in sales last year. Holiday shoppers revealed that they plan to spend an average of $683.90 this year. The latest numbers are based on an online survey conducted by 2,000 adults from Sept. 19-22.
“We continue to see positive consumer spending intentions ahead of the holiday season,” Tom McGee, ICSC’s chief executive said on Tuesday.
Consulting firm Deloitte LLP announced similar findings for its own holiday shopping survey, but placed greater emphasis on online shopping, reports FootWearNews.com. The firm predicted a similar growth of 3.6 percent to four percent for overall sales, but said that online sales could grow as much as 17 percent to 19 percent year-over-year. A big component for online shopping is that more consumers are doing comparison shopping on their smartphones.
Deloitte Consulting’s Nathan Sloan said that more stores are looking to add more warehouses and call centers to get the product into the hands of consumers as quickly as possible.
“The focus on call centers really is also a focus on the experience and trying to help the buying and return experience,” he added.
According to NRF, retailers are expected to hire between 640,000 and 690,000 seasonal workers this holiday season, in line with last year’s 675,300 employees. Macy’s Inc. said it plans to hire 83,000 associates this year, which is slightly less than the 85,000 seasonal positions they had last year. About 19 percent of the season hires this year are focused on customer support or distribution, compared with last year’s 16 percent.
Retailers Ramp Up Hiring for a Piece of the $655 Billion Holiday Sales Pie https://t.co/fVWn6Sql2C
— Footwear News (@FootwearNews) October 4, 2016
Target has also announced that they will ramp up its seasonal hiring. The company will hire 7,500 employees for its distribution and fulfillment centers for the holiday shopping season, which is 1,000 more than last year. In addition, the stores plan to hire over 70,000 workers. More call centers and retail stores will offer plenty of training to make sure all of their associates are prepared for the busy and hectic holiday shopping season, according to Sloan.
“It’s important brands look to balance in-store and online experience,” said Sloan. “Especially when you look at store labor, as it would affect cost and revenue down the road.”
So, what’s the reason behind the holiday shopping surge? Consumer shopping confidence is on the rise. Rising wages, cheap loans, and easy credit have paved the way for a higher than average holiday shopping season, according to retailers, pollsters, and consultants, reports NPR.
Higher Wages And Easy Credit Likely To Spur Holiday Sales, Retailers Say https://t.co/HpebSbABgu
— NPR (@NPR) October 4, 2016
Still, it’s very early in the holiday shopping season. The election results may shake up holiday spending, along with the unpredictable and unusually warm weather. But retail analysts can agree that more holiday shopping will be done online.
A survey by CreditCard.com revealed that one percent of Americans, or 34 million, said they are already done with their holiday shopping. Meanwhile, 73 percent of consumers agreed that “it is annoying that the holiday shopping season has gotten earlier,” pushing Halloween out of the way. Forty-eight percent strongly agreed while the remaining 21 percent disagreed, according to the site, as reported by Patch. Experts say those who finished their holiday shopping likely made their purchases online.
Black Friday, the day after Thanksgiving, kicks off the first official day of the shopping season, letting us know if the year will be profitable for in-store retailers.
[Featured Image by Kena Betancur/Getty Images]