Facebook Pinterest Search Icon SourcingJournal_horiz Tumbler Twitter Shape photo-camera graph-trend Shape latest-news icon / user

Retailers are Working to Ensure a Happy Holiday—But Will it be Enough?

With each milestone—back to school, the beginning of fall—retailers get closer to their make-or-break season. And this year, the question hanging over the holidays will be how well they’ve been able to implement the raft of changes they’ve been touting since 2017 rang in with a flood of bad news.

Almost without exception, retail CEOs—those who oversee mall-based or apparel-heavy chains, especially—have spent much of the last year outlining how they’re transforming their locations, embracing multichannel, rejiggering assortments and improving in-store experiences.

Well, we’re about to see how well that’s all going. The holidays have a way of shining a klieg light on miscalculations and compounding pressures on underperforming operations.

Justine Mannering, managing director at the global investment banking firm Alantra and a ACG New York member, said consumer behavior last year amounted to a perfect storm with a faster shift to mobile than retailers were prepared for combined with a general aversion to the mall.

“We’ve seen a lot of retailers through the year work hard to address those trends and to use customer data to reposition themselves and try and make sure they’re ready to compete this year,” she said, pointing to Sephora and Anthropologie as two chains that effectively market to their core demographics through data. “They’ve managed to focus their marketing messages and their product and their formats on the customer and that will come through for them. I think it will still be tough in the mid-range, multi-label brands or mall-based retailers. They’ll still struggle to the extent that they haven’t been able to move forward this year.”

Nikki Baird, managing partner at RSR Research, said mobile will likely be the differentiator—as it was last year. She recalls seeing consumers in stores on their phones shopping at another store. And she said, that behavior will likely continue. “Retailers who focused heavily on mobile in 2016 had an advantage over their peers,” she said. “If [retailers] haven’t made better investment in mobile in the intervening year that could be a place where the holiday could be the loser that tips them over the edge.”

Holiday hiring

But a focus on mobile to the exclusion of all else isn’t the answer either. These days, you have to meet the customer wherever he or she is, as evidenced by online/offline tie-ups like Amazon/Whole Foods and Walmart/Google. And if they find themselves in stores, you’d better make it worth their while, Baird said.

“If retailers want to turn around the trajectory of falling traffic and falling sales in stores, then one thing they have to pay attention to is their staffing levels through the holidays because if consumers come in and don’t get the help they need, then it becomes a self-fulfilling prophesy [with consumers saying,] ‘Why did I come in here in the first place? I should have just shopped online,’” she said.

And increasingly, there’s more and more pressure on businesses that have large brick-and-mortar fleets to justify their overhead. If their in-store sales can’t, we may be in for more store closures in the new year. To grab as much of the predicted 3.8% and 4.4% holiday sales increase as possible in stores, retailers are ramping up their holiday help.

[Read more about the predictions for the 2017 holiday season: Deloitte, AlixPartners: Holiday Sales Could Increase 4.4% or More]

Though Walmart isn’t staffing up, the company is acknowledging the need for to provide better customer service to harried shoppers and get them in and out as efficiently as possible by providing current employees with more hours.

Target is preparing for what’s been predicted to be a robust shopping season with 100,000 additional staff members in stores plus 4,500 elves for its distribution and fulfillment centers. Similarly, The Bon-Ton Stores will welcome 10,000 new associates in stores and 500 in fulfillment roles. At Macy’s much of the focus will be on online needs, which means a 20 percent boost in hiring over last year to 18,000. With fewer stores however, the department store chain will hire fewer in-store sales clerks, bringing its total seasonal help down from 83,000 in 2016 to 80,000 this year.

And the online carriers are staffing up to. UPS has announced it will need 95,000 seasonal workers—35,000 of which could carry over as full-time help after the holidays, the company said.

Predictions & problems

Whatever retailers are doing to prepare for the holidays, they’d better do it sooner than later because the season creeps earlier and earlier each year.

“The retailers who will win are the ones using customer data and those that have a multichannel/omnichannel strategy and are able to put them into place early,” Mannering said. “The statistics coming out show the expectation is shopping will start early this year, and retailers really need to be prepared to start engaging with customers long before they’re in the stores or online.”

[Read more about what to expect this holiday: Report: 12 Trends Expected This Holiday Shopping Season]

One distraction retailers won’t face this time around: the 2016 presidential election. “Historically you see sales come through earlier. It felt that they came through a little later, which led to retailers discounting more aggressively much earlier. And resulting in the bigger, mid-range retailers really struggling,” said Mannering of last year’s Q4.

But, she said, just because the Trump/Clinton saga is behind us doesn’t mean Washington won’t have an effect on spending. “It will be interesting to see what happens with tax reform, if those do come through, that could impact consumer spending,” she said, adding the effects of which could go either way—with any uncertainty tipping things in a negative direction.

Overall though, she’s optimistic about holiday 2017, as all indicators show positive signs.

“Consumer confidence is back to some extent, the economy is good, unemployment is low, so there’s an expectation that 2017 should be a good year,” Mannering said. “The question is who will be the beneficiary of that?”

Related Articles

More from our brands

Access exclusive content Become a Member Today!