NRF Projects 2.8% Growth This Holiday Season
According to a report released today by the National Retail Federation, forecasts for the 2011 holiday season can be summed up in one word: average. On the heels of a 2010 holiday season that outperformed most analysts’ expectations, holiday retail sales for 2011 are expected to increase 2.8 percent to $465.6 billion. While that growth is far lower than the 5.2 percent increase retailers experienced last year, it is slightly higher than the ten-year average holiday sales increase of 2.6 percent.
“Retailers are optimistic that a combination of strong promotions and lean inventory levels will help them address consumer caution this holiday season,” said NRF President and CEO Matthew Shay. “While businesses remain concerned over the viability of the economic recovery, there is no doubt that the retail industry is in a better position this year to handle consumer uncertainty than it was in 2008 and 2009.”
Though several economic indicators paint a solid picture for the holiday season – including 14 consecutive months of retail sales growth and a substantial reduction in household debt – continued consumer uncertainty over the stock market, higher gas and food prices, fiscal policy and sputtering job growth will impact spending this holiday season. Additionally, the substantial year-over-year gains for the 2010 holiday season will create more difficult comparisons for retailers to achieve this year.
“Just when you think the U.S. economy is turning around, another factor comes into play that changes the game,” said NRF Chief Economist Jack Kleinhenz, Ph.D. “Persistently high unemployment, an erratic stock market, modest income growth and rising consumer prices are all combining to impact spending this holiday season. How Americans will react to shaky economic data is the question, but the good news for retailers is that shoppers have not yet thrown in the towel.”
NRF’s holiday sales forecast is developed based on an economic model using several indicators including consumer confidence, consumer credit, disposable personal income and previous monthly retail sales releases.
What does this mean for bicycle retailers?
It means stay the course with your holiday sale plans. Don't break the bank on marketing, but do what you can afford to get the word out to your customers and compete for their holiday dollars.
Does direct mail have a place in your holiday sale plans? Or should you just focus on low-cost electronic marketing?
The answer to that question depends on your remaining marketing budget and the quality of your offers. If you are planning on making a sincere effort to put together a good holiday sale with meaningful discounts for your customers, then do whatever it takes to get them through the door. The planning involved in a sale is wasted if your customers don't know it is happening.
The best promotional plan for your sale is a mix of direct mail, email, social media, and website marketing. Harvest has a winning formula that we'd like to share. Give us a call and we can help you put together a holiday marketing plan that will help you achieve growth in the final months of 2011.