Retailers, it’s time to talk about the “Giant Turkey” in the room.
Indicators are showing a slow start to the 2013 holiday season. RetailNext recently conducted a study for the first half of November analyzing various retailers — more than 9 million shopping trips nationwide, within 450 stores — and their store performance metrics. Preliminary numbers on shopper traffic in physical retail stores demonstrated a 4.8% decline compared to 2012. Traffic was down and will continue to be down as the number of shopping visits will be fewer this year.
This is true for 3 main reasons:
- Customers are being offered additional channels to purchase from on a variety of devices which results in more products being secured in the digital world,
- 6 fewer days of shopping will, itself, mean fewer shopping visits to stores, and
- The pervasiveness of smart phones gives customers the ability to cross-channel shop and price check at the swipe of a screen.
The real story is that there are fewer shopping days and no indications that customers are shopping early – even though retailers attempted to get a jump-start in early November. Brick-and-mortar stores have made an effort to battle the fewer days by changing their store hours, but this isn’t enough. They must also extend the staff coverage for an extra week prior to the holiday sales kicking into the mix.
The RetailNext study also found:
- Sales-per-shopper was up 1.5% — mostly due to a higher average transaction value (ATV).
- ATV was up 4% — attributed to more sales at regular price, less promotion (at least for now), and perhaps a better shopping interaction between selling staff and customers.
But even with the sales-per-shopper up, there is a gap between the uptick in sales-per-shopper and overall traffic decline, which can negatively impact the top line growth. Understanding this gap is a key component going into December as retailers are pressured with a compressed holiday selling calendar.
So how can traditional brick-and-mortar retailers offset these traffic declines? Please visit our latest article published in Chain Store Age this week for the Top 5 Tips for Taking Action Against Predicted Traffic Declines, and for some helpful reminders from last year’s 2012 holiday.
Good luck! The Thanksgiving holiday is about to “officially” start. And wishing you and yours a very happy and safe Thanksgiving holiday from the crew at RetailNext!