With a lower unemployment rate, moderate wage gains and cheap fuel and food prices, the pieces are falling into place for a more robust holiday shopping season.
Yet while the outlook is slightly more upbeat for retailers, a round of sales forecasts is calling for growth that’s roughly in line with last year.
Despite 2015’s results being held back by unseasonably warm temperatures — which forced retailers into taking aggressive price cuts — Deloitte predicts holiday spending will increase between 3.6 percent and 4 percent from November through January, to top $1 trillion. That’s roughly in line with last year’s results, when sales excluding motor vehicles, gasoline and restaurants rose 3.6 percent.
A separate prediction from Kantar Retail is calling for 3.8 percent growth in the fourth quarter, compared with a 3.4 percent gain in 2015. Its forecast excludes the same categories as Deloitte’s prediction.
Retail Next is calling for a more dramatic uptick from last November and December, when it says sales grew 1.3 percent by its measures. Still, it expects 2016 holiday growth to be roughly in line with the other two forecasts, at 3.2 percent.
“Folks are opening up their wallets a little bit,” said Rod Sides, who heads up Deloitte’s Retail & Distribution practice.
Indeed, consumers are loosening their purse strings. The personal saving rate was slightly lower in July than at the start of the year, falling to 5.7 percent from 6.2 percent, according to government data. Meanwhile, preliminary consumer confidence figures rose to 89.8 percent in September, up 2.6 percentage points from the prior year.
Yet an expected rise in health-care costs will likely weigh on consumers’ psyche, Sides said. That’s because Americans will be selecting their coverage plans for the upcoming year at the same time they’re doing their holiday budgeting.
Uncertainties surrounding the election are also seen keeping the lid on spending early in the season, though retailers are expected to make up for any lost spending once all the votes have been tallied. They could even see a lift from pent-up demand, Deloitte said. That would be just in time for the most critical shopping days, including Black Friday.
Thanks to a series of minimum wage hikes across the U.S., Sides predicts the low-income consumer will be in better shape to spend this holiday. But while the upper echelon of shoppers still has purchasing power, he said they will likely dedicate a larger share of their income to experiences over traditional goods. That trend has held back retail sales growth for more than a year.
Consumers’ addiction to discounts has likewise challenged retailers’ ability to grow the top line, as lower prices mean they have to sell more units to increase sales. Even though retailers’ inventory levels are more rational heading into this holiday season, Sides expects those with run-of-the-mill merchandise will be forced to continue down the path of excessive promotions.
“They can have a reasonable holiday season, but the price will be at [the expense of] margin,” he said. On the flip side, those retailers who can carve out a niche — or create a sense of scarcity for their merchandise — will win.
Companies who check off those boxes are off-price chains, where the merchandise is always changing, or small business players who are slowly stealing share from their larger competitors.
Online sales are once again expected to edge some 17 percent to 19 percent higher, reaching $96 billion to $98 billion, according to Deloitte. That growth rate is in line with last year’s figures, Sides said. Kantar Retail is calling for a similar 15.9 percent lift in fourth-quarter online sales, which would be a slight acceleration over last year’s 14.8 percent increase, by their methodology.
Retail Next predicts digital sales will rise 14.9 percent, compared with 12.6 percent in the final two months of last year. If realized, they would account for 16 percent of total retail sales in November and December, up from 14.4 percent in 2015, the firm said.
The “experience” generation has spoken & it’s not what you would think. Online retail has long been forecasted as the ultimate decline of the traditional brick & mortar, but not so so fast. Even though millennials spend ample time on every internet device possible, when it comes to shopping, they want to see-feel-touch the products they’re buying. Very interesting read below from retailtoday.com:
Gen Z and Millennials are big on physical stores—even more so than their older counterparts.
That’s one of the findings of a new research study by insights firm iModerate in which 74% of all respondents said it is important for brands to have a physical location rather than solely selling online. Interestingly, 80% of Gen Zers and 82% of Millennials respondents said it is important, compared to 69% of Gen Xers and 65% of Boomers.
One of the biggest lures for in-store shopping is the assurance that comes from seeing, feeling and trying on merchandise, particularly items such as clothing, shoes and cosmetics, according to the study. This is especially true for first-time buying experiences.
“One of brick-and-mortar’s greatest advantages over other channels is that there’s an opportunity for shoppers to interact with products, and that gives them the confidence they need to make a purchase,” said iModerate CMO Adam Rossow. “Retailers can take even small steps to capitalize on these exploratory shopping habits, such as creating close-up experiences with new styles, providing samples and demos, and ensuring there are ample mirrors and fitting rooms.”
Big Box Stores: The study noted that while big-box chains are likely affected by e-commerce more than other types of stores because they sell commodity products, they still appeal to busy shoppers who want quick, one-stop-shopping.
iModerate identified three factors that can tip the scales in either direction for big-box shoppers, and lead to different perceptions of the same brand:
Personnel – Big-box stores are often well staffed, but consumers complain that sales associates lack product knowledge.
Convenience – Although they carry a wide array of products, consumers find inconsistency with selection, layout, maintenance and management within each store, causing them to spend more time shopping than they’d like.
Layout – Larger stores with wider aisles allow for easier navigation, but these cavernous spaces can feel cluttered and dirty when not well maintained.
“When it comes to big-box stores, providing a consistent brand experience across every store is essential,” said Rossow. “Retailers should identify the locations that best uphold their brand promise, figure out what consumers love about them, and implement those best practices across all of their locations to the best of their ability.”
The study also revealed that each generation is looking to get something different from their store visits:
Gen Z – Seeks the reassurance found through the sensorial. Stores like Forever 21 enable them to try on various sizes and styles that are difficult to perfect online, and brands such as Sephora offer samples and demos.
Millennials – Seek efficiency and quality. Many are launching careers and have young families so they need to shop frequently, and favor big-box stores for their ability to quickly find everything they need in one place.
Gen X – Seeks an escape and discoveries.
Boomers – Seek comfort and space. They also value low music, light scents and seating.
iModerate conducted the survey with 844 consumers who ranged in age from 15 to over 65, and who shop in a store or online at least monthly.
Energy costs consume a major portion of every facilities budget. Recently a new law went into effect that could provide a tax break when energy management systems are installed in certain buildings.
The Protecting Americans from Tax Hikes (PATH) Act, has been extended along with more than 50 expiring provisions of the tax code. The bill included a two-year extension of the Energy-Efficient Commercial Building Deduction, or section 179D of the tax code.
The owner of an eligible building can claim 179D and qualify for what can be a $1.80 per square foot tax deduction. Owners of these buildings can allocate the accrued tax savings to the businesses responsible for the energy-saving enhancements. In order for a building to qualify for the deduction, the energy based improvements must be made to either the HVAC, hot water or interior lighting systems or to the building’s envelope.
HOUSTON, Feb. 11, 2016 /PRNewswire/ — Near the end of last year, Congress passed and President Obama signed into law the Protecting Americans from Tax Hikes (PATH) Act, a broader, bipartisan tax bill that extended (and in certain instances, made permanent) over 50 expiring provisions of the tax code. Among a host of other pro-business tax provisions, the bill included a two-year extension of the Energy-Efficient Commercial Building Deduction, or section 179D of the tax code. alliantgroup applauds both the PATH Act’s extension and modification of section 179D, citing the tax deduction as not only a vital incentive for U.S. job creation and economic growth, but also as sound environmental policy.
“By extending 179D, Congress has done architects, engineers and contractors a major favor as we have seen firsthand how this incentive has helped companies expand both their workforce and the scope of their services,” said Dean Zerbe, alliantgroup National Managing Director and former Senior Counsel to the U.S. Senate Finance Committee. “Not only is 179D critical to the success of U.S. designers and builders everywhere, it is simply just good tax policy, taking a completely technology neutral approach to incentivizing energy-efficiency.”
Section 179D was originally passed by Congress as part of the Energy Policy Act of 2005 in response to data from the U.S. Department of Energy showing that 73 percent of all electricity consumption was by buildings, with about half of that coming from commercial buildings. The owner of an eligible building can claim 179D, but in an effort to allow architects, engineers, construction companies and energy service providers to qualify for what can be a $1.80 per square foot tax deduction, section 179D allows eligible designers and builders to qualify through energy-efficient enhancements made to government-owned buildings at the federal, state or local levels. As government entities do not traditionally pay tax, the owners of these buildings can allocate the accrued tax savings to the business responsible for the energy-saving enhancements.
In order for a building to qualify for the deduction, the energy based improvements must be made to either the HVAC, hot water or interior lighting systems or to the building’s envelope. The PATH Act retroactively extends section 179D for 2015 and into 2016, but stipulates that buildings placed into service this year must meet ASHRAE 2007 standards as opposed to the old ASHRAE 2001 baseline. The bump up in the standard is a policy nod to modernizing energy-usage techniques and the need to raise the thresholds accordingly.
“The extension of 179D is tremendous news for our clients,” said alliantgroup Senior Managing Director Rizwan Virani. “Even with the higher baseline beginning in 2016, 179D will remain broadly applicable to architects, engineers and contractors across the country. The deduction will continue to provide these companies the funds necessary for broader reinvestment and will allow them to be more competitive not only in their bids, but serve to make them more competitive in the marketplace as a whole.”
The Professional Retail Store Maintenance Association recently released their 2016 Trends Report. Among the top forecasted trends was the “Internet of Things.” To put it simply; how facilities maintenance crews are integrating technologies to gain true business intelligence.
“Technological advancements have transformed the work of facilities maintenance and the management of facilities operations. Smartphones and tablets have unleashed numerous innovations to help business get done, but these advancements have not gone far enough. There’s too much data – produced and gathered from too many different resources, and not enough integration to make sense of it all or capitalize on potential savings.” PRSM 2016 Trends Report
Big projects equal big data, but what good is the data if you’re not putting it to use to better understand your business & make decisions that equal better efficiency?
Powerhouse built a dynamic system that we use to create successful projects, but also allows clients to access site data they don’t typically get. Powerhouse clients are able to review and evaluate that data through our real-time information management system, Infinity by Powerhouse. Through Infinity, you can access graphs, charts and other information that shows exactly how each component of the project is progressing. Photographs and renderings are all conveniently accessible, right at your fingertips.
We developed Infinity to be the most comprehensive data management available. Each time new data is entered at a work site, Infinity is updated as the information is collected, providing you with up-to-the-minute information. Infinity can also send status reports to your email inbox.
Communicate the most recent data
Expedite issue resolution
Ensure quality control
Monitor progress so deadlines are met
Evaluate future needs & opportunities
PRSM’S full 2016 Trends Report is available to read online HERE.
NACS serves the convenience and fuel retailing industry by providing industry knowledge, connections and advocacy to ensure the competitive viability of its members’ businesses. For more information about the 2015 show, check out the video below or visit them ONLINE:
NEW YORK– The Back-to-School (BTS) season is officially underway in the United States, and more than one-third (34%) of consumers have already begun shopping, according to the International Council of Shopping Centers’ (ICSC) BTS Consumer Spending Survey. Consumers still prefer physical stores for BTS shopping, with 83% of their purchases involving physical stores, including 7% of purchases that will be made online and picked up in-store. Of those who will order online and pick-up in-store, 79% said they are likely to buy additional items once in the store.
Driving in-store BTS purchases in 2015 are the 42% of respondents who still prefer the opportunity to physically examine merchandise before purchasing, while 37% like the convenience of one-stop shopping. The importance of omnichannel continues to grow significantly, as 79% of respondents plan to use a mobile device while shopping in-store for BTS.
Of those planning to use a mobile device while shopping in a physical store, 44% will use their phone to compare prices, 28% will use digital coupons, 26% will check ratings and reviews, 24% will check inventory and availability of items and 17% will email or text friends and family for a second opinion on an item. As expected, millennials are the most likely demographic to use their smartphones while shopping.
“Retailers are enjoying a strong start to the BTS shopping season after a sluggish first quarter of 2015,” said Jesse Tron, spokesman for ICSC. “While typically viewed as an essential expenditure, BTS shopping also highlights many of the trends occurring in the shopping center industry. As physical spaces merge with digital to further enhance the omnichannel experience, consumers are shopping in physical stores, participating in webrooming and using mobile technology at shopping centers. It’s good news as we progress into the all-important latter half of the retail calendar.”
The share of consumers expecting to spend more this year increased significantly year-over-year to 67%, compared to 50% of shoppers in 2014 and 39% who expected to increase spending in 2013.
When discussing why consumers plan to spend more this year, 29% of respondents stated it was because of a need to replace wardrobes and school supplies, while 30% cited a change in school requirements. Additionally, 12% of respondents plan to spend more to keep up with changing fashion trends.
BTS shoppers are planning to buy a variety of products, including school supplies (76%), apparel and shoes (75%), electronics – including computers, phones, accessories and wearables (53%), backpacks and bags (45%) and eyeglasses (22%).
Marketing, Deals & Trends are Driving BTS Shopping
Marketing appears to be the main driver of BTS shopping, as 74% of consumers report that they will likely start BTS purchasing when advertisements from major retailers begin to appear. While those cues from advertising play a major role in consumers’ decision to start BTS shopping, the survey found that nearly half (46%) of consumers believe they will get the best deals in August, compared to 30% in July and 15% of respondents who believe the best deals will be found Labor Day weekend or in September.
The results show August leading the BTS season, with 53% of BTS spending taking place in late summer, and the remainder of shopping split between June (10%), July (21%) and September (17%).
Discount Retailers Prevail, Apparel Specialty Stores Increasing in Popularity
ICSC found that discount stores are still the leading BTS shopping destination, with 77% of consumers turning to discount retailers for their BTS shopping needs. Another of this year’s winners is apparel stores, where one-quarter (25%) of consumers plan to shop this season.
Overall, BTS shoppers plan to shop at a variety of store types that also include office supply stores (40%), online-only retailers (29%), department stores (38%) and wholesale clubs (22%). Only five percent of respondents indicated they would use catalogues.
When choosing a retailer, the top three factors indicated were price (76%), convenience (48%) and quality (41%).
Beyond a Place to Shop
The survey found that most BTS shoppers (88%) plan to go to a mall or open-air shopping center during the BTS season, and many will do more than shop. More than half (53%) of shoppers surveyed plan to dine at the food court and nearly one-third (30%) plan to eat at a table-service restaurant, while 28% will see a movie and 17% will attend an event such as a concert, go to the gym or do an activity such as bowling.
Founded in 1957, ICSC is the premier global trade association of the shopping center industry. Its more than 70,000 members in over 100 countries include shopping center owners, developers, managers, marketing specialists, investors, retailers and brokers, as well as academics and public officials. For more information, visit www.icsc.org orwww.thecenterofshopping.com.