Holiday Retail Outlook: Strong and Creative

By Scott Baltic, Contributing Editor

Melina Cordero, global head of Retail Research, CBRE

“Optimism, integration, loyalty and opportunity” sounds like a slogan for something, but what? A political party? A scouting organization?

In truth, these are more than buzzwords, they’re qualities that CBRE, in its just-released 2018 Holiday Retail Trends Guide, says will characterize the holiday retailing season.

These four trends in brief:

• The optimistic shopper—The core of any strong holiday shopping season is a solid economy and low unemployment, and the resulting consumer confidence.
• BOSS—Buy-online/ship-to-store, an evolution of the buy-online/pickup-in-store model, could integrate online and in-store sales more smoothly than ever before.
• The rewards of loyalty—Many major retailers are upgrading their loyalty programs, sometimes in creative ways.
• Opportunities in the toy sector—With the death of Toys “R” Us, retailers from Walmart and Target to Ace Hardware are looking to fill parts of the huge gap left by that category-killer.

“Retailers have been refining and improving their omnichannel playbooks for several years, and those efforts now appear to be paying off,” Melina Cordero, CBRE’s Global Head of Retail Research, said in a prepared statement. “Several of the trends we see this holiday season … are designed to encourage and reward shoppers’ use of multiple channels.”

And now a closer look at each trend.

Optimism

Retail sales growth hit a six-year high in the first half of 2018, according to CBRE, driven by a strong economy and nearly full employment. Based on that, forecasts see retail-sales gains of up to 4.8 percent for the holiday season.

“Retailers excelling in this environment mostly are those so proficient at selling across multiple channels that few of their transactions are strictly in-store or online anymore,” CBRE sums up.

Speaking of which …

BOSS

The buy-online/pickup-in-store model focuses on products that are already in stock at a specific store location. In contrast, the buy-online/ship-to-store (BOSS) approach lets customers choose from the wider inventory of merchandise at the warehouse level.

Retailers hope that shipping from warehouse to store, rather than from warehouse directly to the customer, will cut their fulfillment costs—and lead to add-on sales in the store. Macy’s and Kohl’s are among those going this route.

Loyalty programs

With all the shopping options consumers have now, retailers have to work harder to both get and keep business. “This holiday season will usher in a significant innovation in retailer loyalty programs, with a shift in focus from discounts to experiential services and rewards,” CBRE predicts.

Macy’s, Sephora, Nordstrom, Target and Victoria’s Secret are among the chains that this year will reward shoppers with perks like access to exclusive events, such as fashion shows.

After a giant falls …

With the demise of Toys “R” Us, opportunities in the $1.3 billion toy category abound—for retailers that are nimble and clever enough to claim them.

The players are diverse. CBRE reports that Walmart and Target are expanding their toy sections, even as Michaels, Party City and Ace Hardware will be trying limited toy offerings.

Image courtesy of CBRE