How retailers are trying to beat forecasts of a slower holiday season
How retailers are trying to beat forecasts of a slower holiday season
We may have just rolled into October, but retailers are gearing up for the holiday season. And they’re worried it’s going to be a slow one because of inflation and fears of a recession. One survey from the firm AlixPartners projects a 4% to 7% increase in sales this year. Which, when you adjust for inflation, is actually a decrease in real sales.
As a small-business owner, Rachel Lutz feels a little stuck between how much customers say they’ll spend and how they’re spending already.
“I’m hearing a lot of doom and gloom about a recession, about economic conditions coming ahead,” she said. “But I feel like retailers should be confident going into this season.”
Confident because sales at her women’s boutique in Detroit, called the Peacock Room, are strong. She’s focusing on having unique pieces in stock at all times so she doesn’t lose customers to online shopping.
“It will never replace an in-store experience of feeling and touching and having that immediate gratification of walking out with your purchase,” Lutz said.
Forty percent of people plan to do the majority of their holiday shopping online. That’s up 10 percentage points from 2019. And the more popular digital shopping becomes, the more store- and brand-agnostic shoppers get.
“Retailers need to focus on really understanding what does your consumer want and putting insights into action,” said Alexa Driansky with AlixPartners.
Because of inflation, what consumers want is sales. So stores are starting them early. Target kicks off holiday shopping this week. Amazon’s holding a Prime sale next week.
Brittany Steiger, a retail analyst at Mintel, said a lot of businesses are trying to sell stuff they bought too much of during supply chain snarls.
“As retailers are sitting on piles of inventory, they’re going to want to clear through that inventory,” she said.
Plus, the earlier people start shopping, the more they might spend overall. Nicole DeHoratius, a professor of operations management at the University of Chicago, said a long shopping season is also better for logistics.
“It’s easier to staff for those types of events. It’s easier to plan for sort of a smooth cycle,” DeHoratius said.
It’s why the holiday creep feels earlier every year.
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