by Charlene Capps, November 18, 2019
Big Picture: The National Retail Federation (NRF) and Coresight Research align with holiday predictions for 2019, expecting an increase in sales over 2018 by 4% in November and December. The International Council of Shopping Centers (ICSC) is predicting slightly more aggressive growth at 4.9%. Forecasts are expecting retail sales to reach anywhere from $728B to $830B (globally) through the last 2 months of 2019.
Shopping is starting earlier than last year
This year, we will see the shortest possible holiday season with six fewer days and one less weekend between Thanksgiving and Christmas than typical years. According to the NRF, about 20% of all U.S. retail spending occurs between those two major holidays, and it is even higher for more seasonal items like toys. The last time we saw a shorter holiday season was in 2013. That year we experienced a lot of unique retail tactics for the first time, such as retailers opening their doors on Thanksgiving, brick-and-mortar stores staying open for 24 hours the weekend prior to Christmas, and promotions in early November.
Retailers this year will be making up for the short season by ramping up promotions between November 1 and Cyber Week. Many retail marketers are offering Black Tuesday sales and exclusive product drops starting Nov. 26 – 27. Since 70% of consumers will choose where to shop based on discounts being offered, retailers are going to ensure deals are still available right after Cyber Week to prevent the natural dip in sales. They are also ensuring a seamless buy-online-pick-up-in-store (BOPIS) process by adjusting parking lots for quick pick up to ensure a user-friendly online experience. These are only a few ways retailers are bringing new ideas to make up for the shorter holiday season.
Buy-Online-Pick-Up-In-Store is all the rage
BOPIS is perfect for the person who wants to receive their products ASAP, ensure gift secrecy, save money on shipping, and get a guaranteed deal for Black Friday. BOPIS is also perfect for those last-minute shoppers who are scrambling the week before Christmas to finish their shopping. Adobe is predicting consumers are 19% more likely to spend money with retailers who offer BOPIS the week leading up to Christmas, while 82% of BOPIS consumers will shop for additional items while picking up their orders – resulting in a 10% boost in revenue. Last year, buy-online-pick-up-in-store turned into one of the fastest growing trends in retail for physical retailers.
The most likely BOPIS products are home furnishings and décor. For example, Lowe’s reports that 60% of its online orders are picked up in store, Home Depot reports 43%, Kohl’s reports 36% and Tractor Supply reports 70%. Ten years ago, people thought the new trend was going to be showrooming- the idea of going to a store to find what you want and go home to purchase it online. This does happen, but it isn’t all the hype people thought it would be. It’s all about BOPIS and people will go as early as a couple hours after ordering online to pick up their products at a physical store.
To Wrap up the Holiday Trends
Retailers are feeling the pressure to stay on top of inventory and trends during holiday season. Holiday purchases represents about 20% of annual sales for retailers and can be up to 30% for others if products are seasonal like toys. This year we are going to see the average household spend $1,496 on gifts and holiday related items with an increase of 4% over last year. Wrapping up the holiday season we should see retailers being extremely competitive with exclusives and deeply discounted items for longer time periods. Physical stores will be selling experience on top of products because that is why consumers shop in store over online.