While some economic indicators like home values are showing improvement, others remain anemic such as the unemployment rate. Against this backdrop, Baynote and the eTailing Group surveyed 77 retailers to get a sense of their expectations of the 2013 holiday season. The holidays are so crucial to retail performance that the fourth quarter is make or break time for many an annual plan.
Not surprisingly, retailer sentiments echo the broader economy. They are optimistic and see signs of improvement, but are not yet willing to give themselves over to wanton optimism. Around 50% of our respondents are companies with less than $100M in annual revenues. Of those, half claimed at least 25% or more of their revenues from ecommerce.
Over 60% of our respondents expected growth of 10% or greater in their ecommerce business in the season ahead. Only 14% said they were pessimistic and had adjusted their plans downward. So while they are feeling bullish, retailers also felt strongly that consumers will need promotions in order to really come through for them this holiday. There is caution and discipline in this strategy. All eyes will be on bottom line profitability, so consumers beware – you may need to act fast on special offers as they will not linger. Perhaps even more telling, is what retailers have been doing in their “off season.”
Like many businesses, retailers have not been spending in recent years, but things are changing. 92% of our respondents said they have made limited to significant investments in SEO and SEM throughout the year, followed by another 81% making investments in ecommerce platform upgrades and 82% investing in enhancements to their mobile strategies. Retailers are clearly planning for better times ahead and this in an optimistic sign.
What’s the old cliché – “Hope for the best, plan for the worst?” Based on what we are hearing from retailers, its sage advice for the fourth quarter of 2013.