Retail Holiday Predictions: What You Need to Know About the 2016 Holiday Season

four gift boxes on a table.

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.”

What this means for you

Prepare for a busy holiday season. Foot traffic will likely increase so ensure that your store is well-stocked and adequately staffed. Specific preparations will vary from store to store but, as we mentioned in our post on prepping for the holidays, there are some general best practices to consider, including:

  • Creating holiday-centric displays
  • Hiring seasonal staff
  • Carrying holiday-specific merchandise
  • Stocking up on gift cards
  • Injecting some holiday spirit into your website
  • Hiring seasonal staff
  • Ensuring you have enough supplies
  • Tightening up store security
  • Laying out your holiday policies

Also, keep a close eye on revenue, foot traffic, and customer sentiment particularly after the US presidential elections. As we mentioned earlier, the outcome of the elections could affect consumer spend, so if you see a dip in sales, take immediate steps to ensure you meet your revenue targets.

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.

What this means for you

Clearly, consumers are planning to shop on both digital and physical channels this year, which means the retailers that’ll thrive the most are the ones who can offer amazing experiences across different channels.

So, get your omnichannel ducks in a row. Whenever possible, implement services such as click-and-collect or ship-from-store so your customers can get their hands on their purchases however and whenever they want.

And remember, most shoppers are planning to do online research before heading to physical stores, so see to it that your website can give people the information they need quickly and easily. Write compelling copy, optimize product images, and if possible, include ratings, reviews, and social proof to assist customers further in making purchase decisions.

Additionally, you’ll likely see an uptick in web traffic this season, so ensure that your ecommerce store loads quickly and is secure.

Gift cards are at the top of people’s shopping lists

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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%).

What this means for you

Gift cards are one of the best presents you can give yourself and your customers. Stock up on them and be sure to order cards with holiday-centric designs. Once you have gift cards in your store, market the heck out of them.

Here are a few ideas:

  • Invest in good gift card racks and displays then position them in high-traffic areas of your store.
  • Train your staff to proactively sell gift cards.
  • Sell gift cards on your site.
  • Spread the word using email and social media marketing.

Vend user tip: Are you on Vend’s Advanced or Multi-Outlet plans? If so, sign into your account as an admin and enable gift cards in your store.

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.

What this means for you

Should you get in on the Singles Day bandwagon? That depends on your business and customers. Much like Black Friday and Cyber Monday, Singles’ Day involves offering major deals, so if you’re operating with tight margins, participating in the holiday might not be the best move.

That said, it wouldn’t hurt to be aware of Singles’ Day as you might be able to incorporate it into your marketing and promotions calendar.

Final words

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.

Further reading

expertguide1Do you like reading about retail trends and predictions? Be sure to check out the whitepaper, Preparing for the future of shopping – a collection of insights and forecasts from other retail thought leaders.

It’s a great read that compiles retail predictions and lessons from fourteen of retail’s smartest influencers.

Give it a read and learn about:

  • What’s next for the retail industry
  • What merchants can do to stay competitive
  • The tools and technologies that hit it big in the coming years

Download the guide here.

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+.

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