Retailers Pin Hopes on Holidays After Sluggish Summer Sales
Expectations for the holiday season are upbeat, even as retailers grapple with the fallout from slow summer sales and shifting consumer shopping habits.
Retail sales in November and December are expected to hit $617 billion, according to National Retail Federation projections. That's a 4% increase over 2013, which saw a 3% increase over 2012 holiday sales.
"Retailers could see a welcome boost in holiday shopping, giving some companies the shot in the arm they need after a volatile first half of the year and an uneventful summer," said NRF President-CEO Matthew Shay.
A cool summer and the cost of opening new stores was blamed for Uniqlo's U.S. stores failing to turn a profit, the Japanese company said last week. Also last week, J.C. Penney revised its third-quarter guidance, noting sales were soft in September and citing the "continued difficult retail environment." It now expects same-store sales growth will be in the low-single-digit range, rather than the mid-single-digit area.
The NRF in recent years has focused research and communications on what motivates early holiday shoppers, and retailers keep pushing holiday displays deeper into October and September.
Kmart launched an ad titled "Merry Birthday" last month. The ad takes a humorous approach to Christmas Creep, with a Kmart employee announcing, "Hello, America, it's too early for Christmas. So just to be clear, this is not a Christmas commercial. However, let's say you have an event in late December that you need a lot of gifts for, like maybe your entire family is having a birthday on the same day. Now is the time to go to Kmart and put those gifts on layaway."
But the reality, at least at Walmart, is different. "We're seeing this tendency for the consumer every holiday to shop a little later," said Matt Kistler, senior VP-global consumer insights and analytics at Walmart, in a talk at a University of Arkansas' Center for Retail Excellence conference last week. So, the retailer is mining data to find ways to convince more people to shop in November or early December.
One focus for Walmart in this year's holiday promotions will be gift cards and working around an interesting, if troubling-for-Walmart insight, as U.S. Chief Marketing Officer Stephen Quinn described it at the same conference.
"The No. 1 gift card people want to get is from Walmart, because of all you can buy," Mr. Quinn said, but it "is also the card that they're most nervous about giving to someone. So what we need to do is actually lower people's 'guilt level.'"
To that end, he said, "I think you'll see us use a lot of ideas that can very simply lower people's guilt and give them ideas" on how Walmart gift cards can improve people's lives.