With Christmas around the corner, retailers are all too keen to recognize their growing competition for seasonal shopping: Several chain department stores have closed locations; Hanjin's bankruptcy may affect when some products make it to stores; some consumers may only bite if they know they're getting a deal and e-commerce champions like Amazon are a constant factor.
While all these factors seem dangerous to the retail sector, assessments by certain parties indicate good news. The National Retail Federation is expecting a 3.6% increase in sales in the last two months of the year, based on the trend that Christmas time retail sales have risen by more than 50% over the past 15 years; roughly one-fifth of yearly earnings. Furthermore, a study by PwC indicates this year's Christmas spending will reach its highest point since 2008.
Some of the holiday services that retailers will be offering include:
- Saks shoppers can consult with concierges to help them in deciding on presents, as well as wrapping and shipping them.
- Target will continue to offer in-store pick-up for online purchases.
- Macy's will not offer the same online/in-store purchasing as Target but also a holiday arcade laden with exclusive merchandise.
Re-addressing the closure of major retail locations, Macy's will close 100 locations, accounting for 15% of all Macy's locations; Kohl's will shutter 18 of its least profitable sites; Ralph Lauren is closing 50 locations and Kmart will have shuttered 132 stores by mid-December. The one upside to this rampant downsizing would be the clearance sales. While not a shuttering, the Mall of America will be closed on Thanksgiving; a day most major retailers have been pushing as the beginning of the Christmas shopping season. As the biggest shopping center in the country, Mall of America's decision may send ripples through the rest of the retail industry.
Consulting firm PwC has discerned that most shoppers will only spend 58% of their holiday budget toward purchasing physical goods, meaning that retailers may be able to ease off their regular discounts while still offering Black Friday sales. One unknown factor to this approach is how willing consumers will be to make purchases without the sales and discounts that have been present for years. Another factor to retail profits could include unseasonable weather, affecting clothing purchases. Some analysts worried about Hanjin's recent bankruptcy, fearing that it would imperil the ability for stores to receive their seasonal goods on schedule. Thankfully, most retailers have had no such issue.
Forrester Data, another analysis firm, predicts that, by four years from now, more than two-fifths of all purchases will be e-commerce and some stores are trying to accommodate this change. Loop Commerce allows last-minute shoppers to get their goods after holiday cutoffs have passed or when buying something online hits a snag due to lacking knowledge pertinent to the recipient's sizes. Saks Fifth Avenue is greatly embracing Loop's functionality in order to assure that customers will have every chance to bring gifts to everyone on their lists.