*This article was written by Angelica Valentine, Marketing Manager at Wiser.
Predictions for 2015 Holiday Revenue
The holidays are coming up quickly and recent data from Deloitte has made retailers pessimistic about their revenue outlooks. But not so fast. Even if retail growth is expected to be smaller, that doesn’t have to be the case this holiday season.
While Deloitte cites positive economic factors, like lower gas prices and a better employment outlook, it doesn’t seem that they will translate into increased holiday spending.
Consumers have had higher rates of spending in the past few months, but Deloitte still thinks that it will only increase by a modest 3.5 – 4%, from $961 to $965 billion between the November and January holiday shopping season. That prediction is down from the 5.2% increase the retail industry saw in 2014.
Luckily, online sales should outpace the overall retail growth. According to Deloitte, non-store spending should rise between 8.5 – 9%. This also takes into account mail order shopping. But generally speaking, it is in-line with the fact that online sales grow consistently faster than in-store retail sales.
The vice chairman of Deloitte LLP, Rod Sides, explained, “Online sales continue to be a growth channel, but more importantly, we’ve passed the tipping point where online and mobile engagement play a greater role generating sales in the physical store – where more than 90 percent of retail sales occur – than in digital channels alone.”
Even if the vast majority of sales are occurring in-store, an online presence still plays a large role in the path to purchase.
Whether it’s an effective product description or several images that give an accurate depiction of what shoppers can expect from the product, online acts as both a sales and research channel.
In fact, more than half (64%) of in-store holiday sales will be influenced by online engagement across several devices. This will contribute $434 billion to retail sales.
So what can retailers do to make the most of the holiday season and surpass Deloitte’s spending estimates for 2015 holiday revenue?
1) Integrate All Channels
Deloitte suggests that “Retailers that are likely to come out ahead this holiday season are the ones connecting the dots between their digital channels and their stores – rather than focusing solely on the online ‘buy’ button.” The present and future of retail are inherently omni-channel: shoppers want to be able to use multiple channels and enjoy a consistent and positive experience across all of them.
The numbers confirm this: 80% of shoppers interact with a retailer’s digital channels before going into a store. Each channel that provides a user-friendly experience gets shoppers a step closer to purchasing, so make sure all channels are optimized for research and sales.
2) Have the Right Inventory
Inventory is a balancing act. It’s a matter of having the right trendy products that will get shoppers in the (oftentimes virtual) door and the evergreen products that will keep them coming back.
Knowing the volatility of best selling products helps retailers determine which products are worth adding to their assortment and which ones don’t make sense in the long run.
Be sure to keep up with best selling products on the road to the holiday season so you aren’t caught with large quantities of the wrong products.
3) Price to Perfection
The holiday season is getting longer each year, especially when it comes to online retail. Brick and mortar retailers have to wait for one holiday to pass before they can adequately devote enough space and resources to their holiday merchandise and messaging, but online is a whole different ball game.
You can run holiday promotions and have a holiday component to your home page as early as you want. Shoppers are looking for good deals and better value, and the retailers that are able to provide that will be victorious this holiday season. Beyond marketing promotions, the everyday prices of products should keep up with market trends and this is possible through a dynamic pricing strategy.
It automatically raises and lowers prices in accordance with several internal and external factors to develop an effective pricing strategy.
The holiday season is almost here and it’s time for retailers to solidify their selling strategies to improve sales and profits significantly. Deloitte’s growth projections might be a bit conservative, and there are many ways that retailers can surpass those figures, thanks to a well-balanced inventory, optimized pricing, and integrated channels.