Holiday Season 2011: Retail Projections
According to the National Retail Federation, holiday season sales are set to increase 2.8% over last year.
The 2.8% is a modest increase, but a welcome one. It is less than the dramatic increase last year where the 2010 holiday season bounced back 5.2% blowing through all industry expectations. It was a great recovery after 2008 and 2009 saw reduced holiday sales in the marketplace. This year we can expect growth slightly higher than the 2.6%, 10 year average growth rate.
The growth is attributable to month over month retail sales growth, and lower consumer debt per capita. However, shoppers are still weary due to a fluctuating stock market, and high food and gas prices. The NRF’s projection is based on indicators in the Unites States like “consumer confidence, consumer credit, disposable personal income and previous monthly retail sales releases.”
Online shopping will be up. People will be using the web to buy or at least research purchases 36% of the time (up 3% over last year.) Many retailers will be offering free shipping this holiday season to take the competitive edge over their bricks and mortar retail competition. Some sort of free shipping deal will be offered by 92.5% of online retailers. But online isn’t eating as much of in-stores’ lunch as you might think. “Holiday shoppers who shop in multiple channels will spend 22% more this year than people who are only shopping in a store” says the NRF.
It’s not all about price this year. Consumers will be more likely to consider “quality, convenience and service” more this year than the last few. Retail channels with better customer service and experience will be chosen over discounters in more purchases this year. Consumers will also be doing Holiday Shopping in a wider variety of locations than ever; the gifts in your stocking are more likely than ever to come from a drug store, wholesaler, grocery store or other non traditional channels. People will also be buying items that are usable on a daily basis more: coffee makers, coats, watches… luxury items that have a daily benefit.
More spending on “Me.” People will be spending on themselves more this year. People will be carrying $130 in their back pocket ear marked for themselves. They will take advantage of holiday pricing (particularly Boxing Day) but also can’t help themselves by picking up full priced, well-displayed non-essential products.
Sold Out! A phrase you might be seeing more this year than the last few years. Retailers have gotten burned the last few years by holding too much inventory. It was good for those last minute Christmas shoppers, not so much for retailers. This year stores will be more modest with their stock purchases, and have more more ability to transfer stock from low performing locations to hot locations.
Get that Turboman doll you promised your son ASAP!
That said, have you started your holiday shopping yet?