Although the 2014 holiday retail results are not yet finalized, early reports indicate a less-than-stellar fourth quarter, even with lower gas prices, increased business spending and a growing GDP. Nevertheless, many top economists predict positive retail trends for 2015.
Noting powerful gains in the 2nd and 3rd quarters of 2014, Kiplinger believes the 4th quarter “pause” is unlikely to continue into 2015. The strongest 2015 retail industry forecast signs include a near-record number of job openings, improving wages, growing motor vehicle production and predicted recreational spending, increased health care spending and other positive indicators. With interest rates still low, home buying is also strong. That translates to better prices for sellers.
If you noticed your local shopping mall was eerily quiet on Black Friday 2014, you’re not alone. Although early discounting and Cyber Monday kept holiday shoppers away from the mall on the day after Thanksgiving, CIT/Harris Poll research indicates that retailers are rapidly growing more cyber-savvy. An expanded digital strategy meant using social media to drum up business, as well as using online and mobile marketing to boost sales.
A Shifting Landscape
What is the biggest threat to brick-and-mortar businesses that specialize in certain sectors? One-stop shops in the virtual space, the CIT/Harris Poll revealed — a trend echoed by Under Armour CEO Kevin Plank in Bloomberg Businessweek. “Omnichannel retail is a reality. It’s happening…three years ago it was nonexistent, and now it’s over half our business.” Retail businesses that adapt quickly to an online model will grow faster than point-of-sale-only, flagship-style stores.
High-Tech Becomes In-Store Mainstream
In-store tracking beacons, mobile apps and commerce, and the blend of brick-and-mortar and online retail aren’t on the horizon — they’re already here. What’s next? According to STORESMedia editor Susan Reda, same-day and next-day delivery. “Consumers…want convenience and control, and they want it now,” Reda tells InteractionsMarketing.com.
Businesses that can accommodate the instant gratification approach — such as WeDeliver, Uber and Amazon — are likely to gain an edge. Brick-and-mortar businesses may be extremely well-positioned to provide same-day delivery services to addresses in the local area. Reda notes, if a local business can “connect with a service like Uber and deliver an item in 3 hours,” that business can change the competitive landscape and earn a loyal customer at the same time.
2015 Retail Predictions
Overall, jobs in the American economy remain unfilled and unemployment is dropping. Retail, once in the number two spot behind manufacturing as the country’s largest employment sector, dropped behind Health and Human Services. Nevertheless, “retail remains a vitally strong and vibrant sector of the America economic powerhouse, and continues to drive creation of new jobs,” according to IndependentRetailer.com.
Economic forecaster Michael Niemira predicts the retail sector will increase hiring by 11 percent over last year, a strong indicator that the retail sector is primed for a successful year. If his prediction comes true, the number of retail seasonal employees would be the most recorded since 1990. More employees means more wages, and more wages means more spending — and a brighter 2015 ahead.