RETAILERS ARE POSITIVE ON HOLIDAY 2019

DESPITE A WORLD IN TURMOIL.

As I start going through ALL of my September reading material, (i.e. Vogue, Harpers, InStyle, Elle, Vanity Fair, and WWD), I ran across a few articles that were very uplifting. Here are all my cliff notes comprised into one article for you.

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The outlook for Christmas shopping is holding up. There are turmoil’s over tariffs, sliding consumer confidence, stock volatility, recession worries and utter confusion on what lies ahead around the world.

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And then there’s Christmas... despite economic, political, and consumer perplexities, do not count retailers out for the upcoming 2019 Holiday Season. The thinking, as of now at least, is that gift shopping will be good, generating 4th quarter sales gains in the low single digit range near last year’s gain, which was stated at 2.9%.

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Retailers typically present sunny scenarios when discussing the holiday season which for some accounts for as much as 30% of their annul sales. For holiday 2019 (wait for it!) the glass seems more than half full.

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Store executives, suppliers and industry experts state:

• Back to School business got off to a good start.

• Unemployment remains at a low 3.7%. Average hourly earnings are up 3.2% and gas prices went down 30 cents a gallon on average but are likely to go up.

• Taken all together the consumer has been saving and remains financially healthy to spend on gifts.
   

No consumer seems to be thinking about tariffs or recession. They are spending but spending wisely. The personal savings rate is around 8%.

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Retailers do worry over the mindset of the consumer. What is going on in the world with mass shootings, climate change and political turmoil is potentially weighing on the will to spend and shifting purchasing patterns. Price increases at gas stations will have a big impact on discretionary dollars and spending patterns of middle-income consumers the most.

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In the past few years, retailers holiday promotions have started weeks ahead of Thanksgiving. They are expected even earlier this year. Experts are stating that stretching the season means siphoning business out of Black Friday and Cyber Monday and possibly hurting profit margins with aggressive promoting.

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Watch for bloated retail inventories into the new year as stores have been taking in extra inventory early to beat tariffs. This is the fashion and jewelry industry.

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Experts also state that for Christmas most retailers will be in good shape with strong Thanksgiving promotions and “good values” for gift giving.

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A note to jewelers... be aware that the fashion industry is booming with expensive sneakers, boots, active wear, denim, toys and heart and wellness products. Plus, electronics are huge including the newest TV’s, the new Apple iPhone 11 and Samsung Galaxy Note 10 will all be very popular. Maybe a good Black Friday Promotion?

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The potential recession? No one knows how much consumers will read into that for the holidays. But the season should be ok or on par with previous years. Amazon seems to be the big monster and competing by offering free shipping.

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Remember most consumers get bombarded with emails about sales the week before Thanksgiving.

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I suggest retailers lay it out in an expanded series. Send reminders (which is why Preferred is so important... guaranteeing foot traffic to come back into the store) do product reveals and then promote discounts and offer GWP (gift with purchase) closer to Black Friday.

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I put this together from 5 different magazines. The last part is all me.

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The idea is not to just drive sales but drive engagement.

 

Andie

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