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FTI Consulting forecasts 4.9% increase in holiday sales

BY Marianne Wilson

West Palm Beach, Fla. — FTI Consulting predicts a 4.9% increase in sales this holiday season in its 2013 Holiday Retail Report. Despite slowing discretionary spending growth in recent months and anxiety over political turmoil in Washington, FTI retail and consumer products industry professionals anticipate a potential silver lining to this holiday season.

"Our forecast for 2013 holiday sales indicates that this will be an average year by historical standards, but, nonetheless, one with which we suspect most retailers will be pleased," said Bob Duffy, global leader of the firm’s retail & consumer Products practice and global co-leader of the corporate finance/restructuring segment. "Historically, there’s been a trend of resiliency in the sector, even in years of economic weakness or mild contraction, and we expect this to continue during the holiday season as retailers actively court consumers through aggressive promotions."

FTI Consulting believes that retailers’ gross margins will continue to be pressured by aggressive promotional activity. Retailers focused on the bottom-line must decide how to approach holiday markdowns without jeopardizing the profitability of the season. Declining EBITDA margins among retailers during the last two holiday seasons show that large retailers are willing to sacrifice gross margins to achieve incremental sales growth, and margin pressure has continued through the first half of 2013.

The promotional strategies of certain large chains in the sector could quickly ripple through the lower-end and mid-market retail sectors. Furthermore, the ambitious turnaround efforts of several struggling chains could impact this season’s sales and margins for the entire middle market sector.

"Department stores continue to be a closely watched segment of the retail sector given their challenge to stay competitive in today’s value-oriented shopping environment, and these retailers need a strong holiday season to validate that their strategies are working," said Duffy. "Moreover, the relevance and viability of some longstanding retailers will be closely watched this season and could prove pivotal to their future as going concerns. Ultimately it is the customer that wins in this type of environment, as promotions and pricing transparency create better deals for shoppers with long shopping lists and relatively fixed spending budgets."

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Propelics helps Family Dollar improve mobile strategy

BY Staff Writer

San Jose, Calif. — Propelics, a provider of enterprise mobile strategy and mobile apps, today announced strong adoption for its solutions in the retail market. The company said it helping such retailers as Family Dollar, Payless ShoeSource, and Hallmark as improve the customer, store associate, and store operations experience though the implementation of a solid enterprise mobile strategy.

"We are experiencing rapid-growth, tracking to open 500 new stores in 2013,” said Bill Lord, DVP IT, architecture and engineering, Family Dollar, which operates some 7,600 stores. “We believe leveraging technology to help in this expansion process could deliver significant cost savings. In just eight weeks, Propelics helped us create a comprehensive mobile strategy. They helped us to identify and leverage the huge opportunities mobile presents our business."

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Survey: Female shoppers driven by mobile alerts fueling in-store sales

BY Marianne Wilson

Los Angeles — Women are more responsive to mobile alerts detailing discounts and more likely than men to shop in-store to save on shipping costs, according to recent data from fashion shopping app Snapette, a business unit of PriceGrabber. The survey revealed that mobile ad spend grew by 81% this year, with women aged 25-34 driving the highest click through and conversation rates.

Shoppers of both genders are overwhelmingly visiting retail stores in response to viewing fashion products and promotions displayed on online platforms and mobile phones. Fifty-eight percent of those surveyed responded that seeing a product online has directly resulted in a visit to a fashion store. Additionally, 51% of shoppers reported that mobile phones play some part in their shopping experience.

"Retailers are well-aware that mobile is driving meaningful retail sales, but one of the most surprising revelations to come from our survey is the way in which women differ from men in their uses of mobile as part of their shopping journey," said Sarah Paiji, co-founder and president of Snapette.

Over 44% of women surveyed responded that they visit stores based on mobile alerts drawing their attention to nearby sales. Men respond far less enthusiastically to discounts, with 56% responding to the same question with either "rarely" or "never."

When asked why they would choose to shop in-store rather than online, women out-voted men in all categories except for one: the desire for additional customer service. Nearly twice as many men than women said that they prefer to shop in-store for the additional customer service (13% versus 7% for women). Snapette’s survey results indicate that men tend to prefer a more researched and personally targeted approach when making fashion-related purchases and value input from customer service in-store.

Female focused retailers should recognize the larger opportunity to drive women into stores using mobile as well as deliver regular and engaging touch-points for female shoppers to remain continuously with their favorite brands and retailers. Snapette’s survey findings underline that women are especially responsive to mobile alerts displaying sales nearby. Non-promotional retailers can equally capitalize on female shoppers’ preference to experience retail items in person and save on shipping fees by sending mobile alerts about new collections available in-store.

Paiji said: "This holiday season fashion retailers should not fear the expansion of mobile and online platforms playing into the shopping funnel, but rather take advantage of those outlets to send further information and incentives to shoppers about products and promotion in-store."

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