The holidays are right around the corner, and if you work in retail, you’re probably starting to get anxious. How will people shop during the holidays? What channels will they use? Will 2016 be a good year?
It’s impossible to know these things for sure, but it wouldn’t hurt to try and predict what’s going to happen so you can prepare for the busiest shopping event of the year. That’s why for this post, we’ve put together the top retail forecasts and insights from industry organizations and experts. Have a look at what they have to say and factor in their input when you’re planning for the holidays.
The industry is optimistic about the 2016 holiday season (save for a few reservations)
The National Retail Federation (NRF) and International Council of Shopping Centers (ICSC) released their holiday forecasts last week, and both organizations are optimistic about the 2016 holiday season.
The NRF predicts holiday sales to increase 3.6% this year while the ICSC forecasts a 3.3% growth. “Consumers have seen steady job and income gains throughout the year, resulting in continued confidence and the greater use of credit, which bodes well for more spending throughout the holiday season,” NRF Chief Economist Jack Kleinhenz said.
That said, there a few factors — particularly in the US — that could offset these expectations. According to the NRF, the US presidential elections and political uncertainty could shake consumer confidence and affect spending. And it looks like other experts agree.
“Perhaps like never before, sales for this holiday season will depend on the outcome of the election next month,” wrote Ron Margulis Managing Director, RAM Communications, in a RetailWire discussion.
“If Drumpf is elected, people at the top and bottom on the income scale will be celebrating for very different reasons. The 1 percenters can expect a nice tax break going forward and so may be more inclined to spend a little extra… The rest of the population will likely pull back on spending in anticipation of what they perceive as the dour economic consequences of the election. Net-net for a Drumpf win is no growth in sales for the season and perhaps a slight decrease from last year.”
He continued, “If Clinton is elected, there will be more spending by the extended middle of the income spectrum (25 percent to 95 percent) and slightly less from the least well off. The 1 percenters will still spend, but perhaps not as ravenously as they would with the prospect of a tax gain. Net-net for a Clinton win is 2 percent to 3 percent growth in sales for the season.”
Omnichannel retailers will thrive
The ICSC’s Holiday Shopping Intentions Survey found that 85% of shoppers said they plan to do online research before making holiday purchases in-store. Thirty-nine percent of shoppers (up from 32% in 2015) also intend to utilize in-store pickup, and 83% of these consumers will make additional purchases when picking up their orders.
Gift cards are at the top of people’s shopping lists
Gift cards topped the list of categories in which Americans are planning to spend. According to the ICSC’s consumer survey, 64% of respondents planned to purchase gift cards for the holidays. This is followed by apparel and footwear (51%), toys and games (46%), men/women’s accessories, cosmetics, fragrances (39%), and electronics (38%).
Singles’ Day might come to the US (and other parts of the world)
While Singles’ Day (which always falls on the 11th of November) is primarily celebrated in China, there is reason to believe that the retail holiday will gain steam in the US and the rest of the world.
Why? One word: Alibaba.
In 2015, the retail giant celebrated Singles Day by offering huge deals on its website, and the results were tremendous. Alibaba logged $14.3 billion in sales on Singles’ Day, dwarfing both Black Friday and Cyber Monday sales. Needless to say, the retail industry took notice, which is why there’s a possibility for merchants outside China to capitalize on Singles Day this year.
While holiday predictions are useful for insights, remember that none of them are set in stone. Take these forecasts into consideration, but don’t forget to factor in data from your business as well as input from your customers and staff.
Now, over to you: Do you have any predictions for the 2016 holiday season? Share them in the comments.
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About Francesca Nicasio
Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.