Fitch Ratings: U.S. retail sales to grow 3% to 4% in 2017
Retailers and restaurants in the United States won’t get any relief in 2017 in the battle to win customers.
That’s according to Fitch Ratings' Outlook report, which says that retailers will continue to face a competitive environment in 2017 as they navigate changing customer preferences.
Fitch projects U.S. retail sales, excluding automobiles and gasoline, will grow 3% to 4% in 2017, which is in line with the 3.8% forecasted for 2016 due to a generally consistent economic backdrop. Retailers on a positive trajectory will include Dollar Tree, Burlington Stores, Levi Strauss, Coach and J.C. Penney, according to Fitch. Sears, Claire's Stores, Gymboree, Abercrombie & Fitch, Vince and Bon-Ton will be challenged to maintain share, liquidity and positive same-store sales.
Facing a shift in customer shopping habits and attitudes toward discretionary expenditures, many retailers have responded by moving to omnichannel models that holistically serve the customer across their online and bricks-and-mortar presence.
"Spending focus on services and experiences appears here to stay, so the dividing line between best-in-class retailers and market share donors is increasingly going to be determined by which retailers can cater to the evolving landscape," says David Silverman, senior director, U.S. Corporates. "Those that find success have invested in the omnichannel model and have differentiated their products and customer service to draw customers in."
The full report, "2017 Outlook: U.S. Retail and Restaurants," is available at Fitchratings.com.
Interim CEO of Limited Stores joins fast-growing specialty retailer
Altar'd State, a fast-growing women's fashion and home décor brand, has added to its senior leadership team with two retail veterans. Founded in 2009, the company now operates some 70 stores and is expanding.
John Buell has joined Altar'd State as senior VP, CFO. Buell is a 13-year Limited Stores veteran, having most recently served as Interim CEO. Prior to joining Limited, Buell spent 15 years at Sears, Roebuck, and Co.
In addition, Kelly Walker has been appointed VP, merchandise planning at Altar'd State. For the past eleven years, Walker served as executive director of planning, allocation, and tactics at Urban Outfitters and supported the company during their rapid growth expansion. Previously, he worked at Limited Stores, where he served as director of planning and senior buyer, women's knit tops and he spent time at Macy's and Lord & Taylor earlier in his career.
“The expansion of our senior leadership team will support our ability to provide an exceptional experience for our guests, while enhancing our operational capabilities and achieving the company's strategic growth plans." said Aaron Walters, chairman and CEO, Altar’d State.
Tech Bytes: Three pet peeves disengaging holiday shoppers
The countdown is on.
With 12 shopping days left before Christmas, holiday shoppers mean business. They have their shopping lists in hand, devices are charged, and they want their desired merchandise in their hands — fast. And with Adobe reporting that 5% of customers drive 35% of revenue, retailers would be foolish not to deliver.
As chains watched Cyber Week sales hit monumental levels however, there is no question that some brands are becoming complacent when it comes to continually delivering an exceptional digitally-influenced shopping experience — an issue that is creating a new level of “brand infidelity.”
Retailers that don’t make it easy for shoppers to browse, shop, even procure merchandise across channels make it very easy for shoppers to “explore elsewhere.” And all a competitor needs is one excellent experience to woo an under-appreciated shopper away from a once-loved brand.
Among the biggest pet peeves sending omnichannel shoppers into the arms of competitors are:
• Poor Web performance. E-commerce site crashes are never welcome — especially during the holidays. Yet, poor planning puts all companies at risk. For example, overwhelming online traffic forced many of Macy’s Black Friday shoppers to continually “reload” the site to gain access — a move that translates to abandonment. It’s not too late for retailers to invest in Web performance optimization solutions designed to manage peaking levels of online traffic, and improve content and page load times.
• Inaccurate merchandise availability. Running out of merchandise during the holidays is the kiss of death for any chain — and this is only exacerbated when a shopper gets mixed messages channel-to-channel.
For example, during the month of November, Target was already at a 6.8% out-of-stock level on the season’s most popular items, while Jet had a staggering 28.8% rate, according to a recent study by Boomerang.
As retailers strive for transparency between digital and physical channels, their inventory must also be transparent. Chains must break down silos to streamline inventory availability enterprise-wide — and give the shopper the chance get her desired merchandise when and how she wants it — all shopping season long.
• Misleading promotions. I bought a holiday gift based on a sounds-too-good-to-be-true, pre-Black Friday email promotion I received from a national retailer. I didn’t find out until after I got to the store that the deal was exclusive to members of the retailer’s loyalty program. Since I am a member, I wasn’t put off.
Back home, I re-read the email again and still didn’t see any pre-requisites. To avoid turning off customers, deals exclusive to loyalty club members or that have other qualifications, should be clearly marked as such. Don’t get customers to the point of purchase — particularly during the hectic holiday season — only to anger them because the “great” deal doesn’t apply to them. If you do, chances are you will kiss them goodbye — for good.