A new survey of retail CMOs predicts that people will have less to choose from when they start their holiday shopping, with the number of products available actually declining a bit.
That’s because U.S. retailers are expecting a lukewarm gain in holiday sales, up 2.9%. “And in August/September, when these chains were firming up their inventory decisions for the holiday period, consumer confidence was kind of in a freefall,” Doug Hart, partner in the Retail and Consumer Product Practice at BDO USA, LLP, which conducted the study, tells Marketing Daily.
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CMOs predict a 0.2% dip in SKUs, with inventories up just 0.7%. The cutback in elections is evident across the board, he says.
Only 41% of those in the survey -- the most recent edition of the BDO Retail Compass Survey of CMOs --expect an overall increase in holiday sales, down from 2010 (52%) and 2009 (47%). The bigger the chain, however, the higher the hopes: CMOs at the top 100 largest retailers are more upbeat, with 67% expecting an increase in overall holiday sales.
And the majority are gung-ho on gadgets, with tablets and e-readers tops on the list. Overall, 58% of the CMOs named consumer electronics as the most likely candidate for strongest category, followed by toys (16%), apparel (11%), home goods (10%) and lifestyle goods (5%). And while other studies have predicted a dip for gift cards, this group expects to sell plenty of them: Of those who offer gift cards, 57% expect an increase in gift card sales, a big jump from last year’s 47%.
The group also sees unemployment as the greatest possible Grinch, with 52% saying it will have the greatest impact on sales. Other concerns include the housing market (19%), energy and fuel costs (17%) and global market volatility (9%).
Hart says the recent trend of chains like Walmart, Target and Best Buy opening at midnight on Black Friday is evidence that stores are determined to get their price message across to eager shoppers. “If you’re going to go for it on Black Friday, why not be seen as a leader? They’re looking for ways to add fun, excitement and sizzle to the experience.”