Deloitte sees holiday gains despite headwinds


The analysts at Deloitte tick off a number of challenges facing retailers this holiday season. Flattening consumer spending patterns. Weak confidence. Higher prices for everyday necessities. Trouble brewing in Europe. Tough comps to holiday 2010. Yet it still sees room for a modest uptick in sales.

In the face of all of these factors, the company is predicting 2.5%-3% gains for the 2011 holiday shopping season.

Deloitte economist Carl Steidtmann commented, “Consumer spending was on the rise for several months despite dampened confidence in the economy among U.S. households. Those earlier gains have begun to flatten and may be tempered by persistent weakness in the housing and employment sectors and pressures from the European debt crisis.  Despite some relief in energy prices, consumers may feel the strain from food, apparel and other categories where prices are markedly higher compared to the previous holiday season. Additionally, retailers will face tougher comparisons this year after last year’s substantial increase in holiday sales.”

There is some tough news for brick and mortar venues, however – online and other non-store venues such as catalog and interactive television sales are expected to enjoy double-digit gains in the 14% area. Successful companies will effectively utilize all available channels for sales.

“Double-digit growth in the non-store channel has given the industry a major boost, and retailers that put online channels to work for their physical storefronts have the advantage,” said Alison Paul, vice chairman, Deloitte LLP and U.S. retail & distribution sector leader. “The brick-and-mortar store is still central to the shopper experience.  Retailers that integrate the power of the sensory experience in-store with relevant, timely information via their websites and mobile applications are well-positioned to lead the way this holiday season.”

Paul concluded, “As many holiday shoppers will be researching online and on their smartphones both before and during their trips to the store, retailers need to be sure their digital strategy is both flexible and focuses on a personalized experience this season.  Store associates can be a critical element to any digital strategy to complete and upsell once the customer comes into the store. It’s important that they are well-versed on the latest products, promotions, pricing and competitor offerings that consumers receive through online and mobile channels.”

RBR-TVBR observation: Broadcast is a great venue for driving both in-store and online traffic. Don’t let the retailers in your neighborhood forget it!