With strong holiday shopping sales forecast, retailers are doubling down on strategies to draw online shoppers into stores, reward customer loyalty in new ways and make toys available for purchase at every turn, according to the global commercial real estate giant CBRE.
The company’s annual Holiday Retail Trends Guide vividly depicts a common theme connecting several of the strategies deployed by retailers for this season by enhancing capabilities to seamlessly cater to shoppers in stores, online and on their mobile devices.
“Retailers have been refining and improving their omnichannel playbooks for several years, and those efforts now appear to be paying off,” says Melina Cordero, CBRE Global Head of Retail Research.
“Several of the trends we see this holiday season – including buy-online/ship-to-store services and enhanced loyalty programs – are designed to encourage and reward shoppers’ use of multiple channels.”
The strong economy and near-full employment helped push retail sales growth to a six-year high in this year’s first half, which in turn has generated forecasts of healthy retail-sales gains of up to 4.8% for the holiday season by observers such as the National Retail Federation (10-15-18, P. 1).
“Retailers excelling in this environment mostly are those so proficient at selling across multiple channels that few of their transactions are strictly in-store or online anymore,” CBRE points out.
Ecommerce continues its meteoric ascent in both overall sales numbers and market share. Online sales are forecast to rise 16.3% year-over-year (on par with 2017 growth levels) and reach 12.5% of total retail sales (up from 11.2% in 2017).
However, the lines between online and in-store are becoming increasingly blurred because retailers have come to recognize and exploit the interdependent nature of brick-and- mortar and online sales growth.
Following extensive experimentation, retailers are learning to leverage online channels to drive store sales and vice versa, says CBRE.
Several pure-play e-tailers and non-traditional retail brands will open their first pop-up stores this holiday season, including Wayfair, Conde Nast and Good Housekeeping magazine.
While this is helping to drive overall revenue, CBRE says it also is blurring the traditional boundaries between online and off-line growth.
For several years, retailers have been promoting buy online/pickup-in-store programs, which focus on merchandise already stocked at the store level.
This season, the latest evolution of that strategy—buy online/ship-to-store, called BOSS—allows shoppers to select from a wider inventory of merchandise stocked at the retailers’ warehouse to be delivered to their nearest store.
Retailers like Macy’s and Kohl’s are betting that BOSS will both cut their delivery costs and generate add-on sales to shoppers who visit stores to pick up their orders. CBRE asserts that the key to BOSS’ success likely will be the incentives retailers offer shoppers to use it.
Retailers are expanding their loyalty programs to retain shoppers. Their “sweeteners” of choice are enhancing their customer experiences and access, according to CBRE.
Retailers including Macy’s, Sephora, Nordstrom, Target and Victoria’s Secret have upgraded their loyalty programs this year to reward shoppers with perks such as access to exclusive events like fashion shows. In Sephora’s case, that even includes meetings with the company’s founders.
“The trend underscores retailers’ efforts to build stronger connections between their shoppers and their brands,” CBRE observes.
Nature abhors a vacuum – and apparently so does Santa. The closure this year of Toys “R” Us’ stores cleared the way for a wave of opportunistic retailers to fill the void. At stake are $1.3 billion in sales in the fast-growing toy category, CBRE notes.
Several leading retailers such as Walmart and Target are expanding their toy sections. Meanwhile, others that aren’t widely known as toy sellers, including Michaels, Party City and Ace Hardware, are jumping in with limited toy offerings.
“This looks to be a strong holiday season for retail for several reasons,” said Brandon Famous, chairman of CBRE’s Global Retail Occupier Executive Committee.
“In addition to the tailwinds of the robust economy and strong consumer confidence, retailers as a whole have gotten smarter and more efficient with their omnichannel strategies and their programs for attracting and retaining customers.”