Retailers are ready for a strong holiday shopping season
The holiday season is always a critical time for retailers and 2021 is expected to deliver. North Plainfield-based Levin Management Corporation completed its annual pre-holiday poll of store managers and finds sentiment is strong going into the holiday season.
CEO Matthew Harding said that's because several factors come into play here. First, pent-up demand. People are returning to the shopping scene, following the COVID-19 pandemic. Second, there's still an influx of stimulus money in the system and he said people are using that money to shop. They are also feeling generally good about the state of the economy and the future. He said people are shrugging off a lot of the uncertainty from COVID that was lingering throughout last season.
The survey found 72% of retailers were more optimistic about doing better this holiday season than last season. 95% of respondents said they're going to add marketing dollars or marketing events to at least the same level or better than last year.
However, there is still some uncertainty in 2021 among retailers. The top dark cloud is supply chain issues. "Are they going to get the merchandise to meet demand?" asked Harding. The number two concern is labor. There's a good percentage of retailers are looking to hire but more than half fear it's going to be difficult to hire. So, it's not clear if they will be properly staffed for the busy holiday season.
Approximately half of retailers have increased hourly wages and doing other kinds of incentives to attract workers such as referral bonuses, performance bonuses, end-of-season bonuses, free meals at work, to name a few. Harding said retailers are doing everything they can to permanently bring in staff.
E-commerce is at the bottom of the list of concerns. In the past several years, e-commerce had been a threat to brick-and-mortar stores. But this year, that concern hit rock bottom. "I think we're really seeing this omnichannel method of reaching a customer online and bricks-and-mortar playing a very important role, has really come together," said Harding.
Ordering online and pick up in stores have been very strong, he added. The connection between the two shows more than 70% of people who order online expect to buy something extra when they go to pick up their merchandise.
The survey found 85% of people plan to spend money at physical stores this season.
Harding said the bottom line is that people still love to shop in person. People like to socialize and look at merchandise in person. "That is not going to go away. I think it's bred into us, particularly folks in New Jersey as well," said Harding.
Stores are also planning to ramp up marketing. 95% of respondents plan to either maintain or increase levels of holiday marketing including special events in-store, more social media marketing and email marketing, and rebranding themselves. That could mean refreshing the look of the store or revamping restaurant menus and even full rebranding rollouts in time for the season.
Sentiment going into the holiday season is very positive. "We're seeing it terms of sales. We're seeing in terms of the optimism of the respondents in our survey and we're also seeing it in leasing. We've done nearly a million square feet of new leases, renewals for space this year," said Harding.
That's more than 15% more than last year and even more than in 2019. This just shows this is not just about holiday season optimism, but rather long-term optimism about the economy and the future of their own businesses said, Harding.
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