By Stefano Virgilli — For retailers in many countries around the world, Christmas season brings a significant percentage of the annual sales. In recent years, technology has influenced the way people shop, causing a decrease in retail sales. This year’s forecasts show that retailers will enjoy a strong Christmas season, after last year’s online shopping overtake. Therefore, small and medium businesses are quite optimistic about the sales during the holiday season.
According to the American Express Holiday Growth Pulse survey — that included 1,502 small and middle businesses of various industries — 59 per cent of small business retailers are optimistic about this year’s sales. Only 34 per cent of small business retailers think that holiday sales will be roughly the same as last year. By comparison, 81 per cent of middle business retailers support the optimistic viewpoint of small business retailers.
At the peak of the season, 77 per cent of the middle market retailers plan to strengthen their workforce and hire additional staff, compared to 31 per cent of small retailers. Since the sales are expected to rise, retailers are focused on improving customer service, providing the best experience for the consumer, and fighting competition.
Given the race for the upcoming period, retailers feel the pressure of exceeding the consumer’s expectations. One of their strategies is to offer discounts and deals that will be promoted on their social media platforms. Keeping a consistent online presence, promoting the brand, and fighting online stores, like Amazon, is a challenge for retail stores. Social media is one of the best strategies of promotion, with 89 per cent of retailers planning to utilize during the season. Therefore, 64 per cent of small business retailers and 88 per cent of middle market retailers understand the necessity of a more aggressive promotion approach that will help them grow their sales. Gifts and parties for small businesses and large bonuses from middle market companies will be a this years’ strategy to clients and consumers. During the holiday season, more than 80 per cent of small and medium businesses employees’ can expect a bonus, whether it’s something small or of a great size.
Businesses’ main focus this year — as any other — is growth. Numbers show that 91 per cent of middle market companies and 74 per cent of small businesses prioritize growth as their number one on the list during the holiday season.
Susan Sobbott, President of Global Commercial Payments at American Express, says that “retailers are optimistic about the upcoming holiday season and the impact it will have on their growth in 2017.’’
“As small and middle market retailers gear up for this critical season, many are offering promotions to draw customers in, and hire additional staff to ensure quality customer service during the busy season,” she adds.
Moreover, their major concern during the holidays is employee productivity and data security. Retailers will keep their focus on improving internal things to assure a great holiday experience.
According to the US National Retail Federation, 2016 will be an excellent holiday season. US retailers can expect a 3.6 per cent rise in sales — excluding gas, car sales and restaurants — during the season, which is estimated at $655.8 billion. Which is crucial, since during the holiday season, as much as 30 per cent of the annual sales are generated.
A whole of 10 per cent contribution to the sales is expected by online businesses. Last year, it was the first time when the majority of shoppers decided to visit online shops, instead of going to actual shops.
It was estimated that in December 2015, retail sales dropped 0.1 per cent, and the year was the slowest of gains since 2009. Throughout the whole year, sales grew by 2.1 per cent, expanding at a rate of 5.1 per cent in the period of 2010 to 2014. During the period, more people earned an income and job creation did not suffer. The decrease in sales can be connected to falling gasoline prices, affecting sales at gas stations with a decline of 1.1 per cent and 1.3 per cent in November and December, respectively. In this categories are clothing and grocery sales, that also experienced a decrease in 2015. Sales were especially weak at stores and departments that sell electronics and appliances.
On the contrary, Internet sites, sports stores, and home furnishers rose, showing that people utilize the Internet for shopping more than before. Auto sales and restaurant sales increased as well. That is a quite positive sign of the confidence of the shoppers. Bars and restaurants experienced a rise in sales of 8.1 per cent compared to 2014. Last year, the sales of new autos hit a record.
Hence, if the consumers have steady jobs and feel confident in spending their money in restaurants and purchasing new cars, why was a decrease — excluding gas — in overall sales? Many economists believe that a great amount of people’s income goes to healthcare and rents — whose prices are constantly rising. Regardless the cause, forecasts show that this year, retailers will enjoy a merry Christmas.