The retail industry is positioned to enjoy a relatively strong 2014 holiday season in-store to complement steadily growing online and mobile sales. Recent releases of the October Consumer Confidence Index, strong economic indicators and the RetailNext Composite Index suggest that holiday shoppers will be more committed to spending than in the previous year.
The Conference Board released October’s Consumer Confidence Index on October 28, and it was a surprising 94.5, up from 89 in September and well above forecasts. It’s a welcomed signal to retailers that Holiday 2014 will be prosperous, as it reflects consumers’ more favorable assessment of the current job market, the short-term outlook for the economy, and their future earnings potential.
In addition to jobs growth, other strong economic indicators include low mortgage rates and the incredibly shrinking prices at gasoline pumps, giving consumers more reason to be optimistic than last year’s Holiday season, or even earlier this year.
All the trending good news for consumers has begun to show up in the RetailNext Composite Index, the most recent report released just last week. The index showed an improvement in Year-over-Year (YoY) Sales variances from previous months in 2014 for brick-and-mortar stores, down just 3.1 percent in October, comparing favorably to the decrease of 5.8 percent experienced June. Additionally, Traffic declines are less from earlier in the year, down 4.5 percent for October. Conversion is at the highest YoY variance all year at an increase of 0.8 percent.
Striking while the iron is hot
Of course, it’s not good enough to passively rely on bettering macro-economic conditions to realize increased store performance, as all retailers share the same opportunities. To create differentiation and capture the opportunities, physical retail stores are taking proactive steps to improve their in-store shopping experience. These efforts are focused on four primary areas, fueled by both creative thinking and advanced in-store analytics:
- Store theatrics – using in-store technologies like iPads, QR codes, virtual mirrors, augmented reality and more to engage and entertain shoppers.
- Amplification of store connectivity – using Wi-Fi to ease shopping pain points and provide “hassle free” shopping, displaying product information, integrating opt-in Wi-Fi with loyalty programs, powering direct marketing strategies, and enabling mobile payment options.
- Focus on interactions – retailers want to increase the number and quality of “touchpoints” between themselves and shoppers through various digital and physical methods, including messaging, surveys, mobile communications and e-commerce, and, of course, sales associates in the store.
- Personalization – creating customized direct marketing strategies with customers on programs that are relevant to each individual shopper.
The convergence of positive economic indicators with the innovative efforts that brick-and-mortar retailers have been demonstrating and executing over the past year will deliver retailers the best opportunity of the past few years to see strong holiday results.
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