We’ve made it through the end of another year, another holiday retail season and another decade. 2019 may go down as the year the retail apocalypse came to fruition, with chains like Barney’s, Forever 21, Payless and American Apparel shutting down, contributing to the more than 9,300 stores expected to close by the end of 2019, according to Business Insider. Despite this, estimates for the holiday season are forecast at $143.7 billion, a 14.1 percent increase from last year, according to Adobe.
It’s go time for retailers as the holiday season kicks into high gear. With Black Friday the last day of November, there are six fewer shopping days between Thanksgiving and Christmas, so retailers have started Black Friday deals even earlier than normal and have even more on the line. According to Cowen retail analyst Oliver Chen, “"We're in a very strong consumer environment. If you're having difficulties, what does it mean for the future?" Morning Consult Economic Intelligence currently holds at 110.2 — close to its highest measure in a year and above the 100 line that divides positive from negative impressions of economic outlook.
But before holiday shopping officially begins, many other retailers made headlines this month. Alibaba’s Singles Day on November 11 beat Amazon’s Prime Day sales within an hour of being live, generating $13 billion in sales. Reports came out that luxury reseller The RealReal had sold counterfeit merchandise, calling into question its authentication process. And lastly, LVMH announced it would purchase Tiffany for $16.2 billion, the largest ever in the luxury sector, giving LVMH more access to the US market and helping Tiffany in Europe and China.
Here’s what else caught our eye in November:
Once again the retail industry is gearing up for the holiday season. Wondering what kind of holiday season it will be? The National Retail Federation expects holiday retail sales during November and December to increase between 3.8 percent and 4.2 percent over 2018 to a total of between $727.9 billion and $730.7 billion. PwC’s 2019 Holiday Outlook reports that Black Friday is now more symbolic than significant with almost 50% of shoppers waiting until after Black Friday Week to complete their shopping.
What’s notable is that the winners this holiday season and beyond will be the ones that are combining technology, personalization and in-store services in new ways to drive customer acquisition and increased customer lifetime value. As we approach 2020, it’s about the ability to meet customers wherever they are, in-store, online and in-home.
Stories about technology, personalization and in-store services that caught our attention this month:
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Advertising Week has become a fixture on the New York conference calendar in September, attracting brands, marketers and technology providers as well as retailers and celebrities. This year there were more than 100,000 attendees, 350 sessions and 1,200 speakers. KWI’s Chief Customer Officer, Frank Weil, curated and emceed the Retail track on day one of this four-day conference. With a focus on retail and direct to consumer (DTC brands), Advertising Week’s Retail track featured sessions on modern commerce in the digital world and sought to understand how retail evolved the ways brands sell, and how has it changed the way consumers buy.
The end of summer means back to school and major sales for Labor Day. The National Retail Federation is predicting back-to-school sales will reach a record per-family high this year of $696.70. However, since fewer families have school age children, overall spending will drop to $26.2 billion, down from $27.5 billion last year. Forbes takes a look at what mall retailers should consider for back to school, especially looking past Labor Day for sales and foot traffic.
In other big August news, Lord & Taylor announced it will be sold to Le Tote, the clothing rental start-up. This article examines why new is buying old.
July used to be a lull in the retail world, but that all changed five years ago when Amazon launched Prime Day to celebrate its 20th birthday and created a Black Friday cultural event for Prime members. Vox does a deep dive into the history of Prime Day and how it has evolved, and what may be in store for future Prime Day events as it continues to expand into concerts and events. However Prime Day also brings a boost to competitor brands who also offer their own deals and specials. Walmart, Target and Best Buy all reported increases of in-store traffic during Prime week, as well as online.
Summer is officially here and while many are thinking of summer vacation, the retail industry continued to keep busy in June. Especially Target, which is recovering from a mid-month cash register technology issue that may have lost the retailer more than $100 million in sales. According to RetailDive, the spring quarter was rough for many specialty retailers due to cold weather, increased shipping costs and questions over tariffs. But looking ahead to July, Amazon Prime Day is scheduled for two days this year, July 15 and 16, and has caused many other retailers to create their own shopping experiences to compete with Amazon. Techcrunch reports that 250 retailers will compete against Amazon, with brands like Walmart and Target planning big sales.
The start of the school year and back from summer vacation always come in strong, with retailers still focused on back to school rush while already preparing for the holiday boom. Within the retail industry, a few policy issues have the potential to impact the broader industry. Potential tariff increases from China could have the retail industry increasing prices passed on to the consumer. According to the Bureau of Labor Statistics’ consumer price index, apparel prices haven't gone up meaningfully in at least 7 years, and for items like toys and cosmetics, prices have actually been trending lower. “We’ve trained customers to be so cheap," Sucharita Kodali, a retail analyst at Forrester Research is quoted in Axios. “Amazon is a symptom of the consumer obsession with low prices,” not the cause.