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Despite Supply Chain Bottlenecks, Record Sales Are Projected For This Holiday Season
The National Retail Federation released estimates on Wednesday which project holiday sales during November and December to rise between 8.5% and 10.5% year-over year. In total, the NRF believes that the US will see between $843.4 billion and $859 billion of sales.
For perspective, holiday retail sales have grown year-over-year by an average of 4.4% in the past five cycles. Melissa Repko of CNBC noted that, “last year, holiday sales rose 8.2% from 2019 to $777.3 billion, according to the NRF, as consumers cheered themselves up with gift-giving during the pandemic.” That Q4 bump help stabilize a rocky year for retailers across the board.
This year, NRF President and CEO Matt Shay believes that sales have stabilized as consumers have eased into new spending patterns. More time at home, stimulus funds and the gradual reopening of brick and mortar locations in the wake of widespread vaccine availability, has all led to a buying bonanza.
Shay did acknowledge this week on a conference call with the media that supply chain bottlenecks and labor shortages will cause headaches for merchants and consumers alike, but that strategic inventory management on the part of US retailers should keep the flow of goods moving through the holiday season.
“It’s not as if there are not some headwinds and challenges, and yet in spite of that, we have a great deal of confidence that consumers will continue to power the economy in this last quarter of the year,” he said on a call with reporters on Wednesday.
Shoppers have also begun their holiday shopping earlier than ever, a trend that could offer supply chains some relief in the coming months.
A final interesting note from Shay’s conference call: vaccinated tourists. Starting November 8th, international tourists with proof of vaccination will be able to visit the US. Shay closed the call by noting that “we think that’s also going to give a jolt to the retail side.”
Trends From Major Retailers
At Clyde we’re always on the lookout for scalable solutions and tactics that can help our merchants drive higher revenues while sidesteping potential pitfalls. Major retailers like Walmart, Amazon, Target and Best Buy have announced earlier holiday sales events, but they haven’t stopped there.
All four are now offering exclusive access to products for loyal customers, which includes early access to Black Friday/Cyber Monday deals. This is helping these companies alleviate supply chain logjams by moving products ahead of the holiday season, while also building stronger relationships with their customers. This is a great way to organically build customer loyalty while fostering a positive brand image.
Interested In Customer Outreach Techniques, <INSERT FIRST NAME HERE>?
The Indicator, an NPR podcast focused on business tactics and the economy, examined a tried-and-true sales tactic that may be backfiring more than you think. Repeating a customer's name is a common practice among salespeople because it can build trust with the customer, but does it work in every situation (in-person, email, text)?
Harvard marketing professor Frank Cespedes says the strategy is backed up by science, and is important, especially when it comes to one particular category of sales. Want to find out what that category is? Listen to the podcase episode here.
Is Your Company Ready To Move Ultrafast?
Gopuff, a pioneer in the “instant needs” category, launched Wednesday in New York City. Gopuff delivers daily essentials in minutes, from food delivery and home essentials to baby items and pet products. The new company is even testing alcohol delivery in select markets. The upshot is that companies like Gopuff can deliver in urban areas within an average of 30 minutes. Industry analysts believe if the first few providers through the wall show promise, this "instant need" category is set to explode in the coming years.
“When Amazon came out with two-day Prime [delivery], that was the most revolutionary thing,” Yakir Gola, co-founder and co-CEO of Gopuff. told CNBC this week. “Now, people want it in 20 minutes. In 10 years, people are going to want it in five, 10 minutes. At the end of the day, people value time, so you have to keep innovating.”
This wave of instant delivery also represents a way for small and medium sized businesses to compete with the major retailers who have already built their own express delivery systems. Walmart has a two-hour or less express delivery option and Target owns the same-day delivery service Shipt. Ulta Beauty and LVMH-owned Sephora recently announced plans for same-day delivery of lotion, lipstick and other beauty goods in select markets. Developing an "instant need" gameplan, even if it only exists in major U.S. cities appears to be climbing the priority ladder for brands big and small.
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