The outlook among economic forecasters is positive for U.S. retail sales for the holiday season and 2018 overall. Deloitte, the London-based multinational financial services firm, forecasts holiday retail sales this year (excluding automobiles and gasoline) to exceed last year’s 5% growth to reach upwards of 5.6% year-over-year between November and January, for the first time exceeding a total of $1 trillion. Of that amount, Deloitte expects holiday Ecommerce to total between $128 and $134 billion. In fact, NetElixir, the Princeton, New Jersey-based digital marketing firm, predicts 15% sales growth in Ecommerce this season year-over-year, representing the strongest results of the past several years.
These bullish projections are supported by strong Ecommerce results in the first half of 2018, with about a 17% increase in orders and 15.5% rise in revenue over 2017.NetElixir sees a surge in mobile shopping, expected to make up about 42% of all online purchases, as well as a growing use of shopping initiated by voice search.
Deloitte cites positive economic factors fueling strong retail sales, including tax cuts and the prospect of wage growth, a solid labor market with low unemployment, and high consumer confidence. Consumers are expected to see a disposable income growth rate in the 5% to 5.4% range this year, according to Deloitte’s U.S. economic forecaster Daniel Bachman, which is likely to make shoppers feel more comfortable spending more on holiday purchases.
Kiplinger predicts that 2018 will go down as a good year for retail, with sales overall, excluding gasoline and autos, rising 4.9%, better than 2017’s 4.2% pace, and the best since 2011. The Washington, D.C.-based publisher of business forecasts and personal finance advice predicts Ecommerce will have another banner year, jumping 15% in 2018, while in-store year-end sales will see a moderate 3.4%, cited as its best showing since 2014.
Thanksgiving weekend was reportedly better than 2017, reports the business magazine, Forbes, which noted that holiday promotions started early this year with stores advertising “Black Friday” sales to entice shoppers ahead of Thanksgiving weekend. With Thanksgiving on Nov. 22, the Christmas selling season stretches over five weekends. Moreover, Forbes notes that the eight-day Jewish holiday of Chanukah is expected to sustain early sales in certain markets, since it also starts early this year (Dec. 2).
Jewelry Sales Forecasts
“The economy is good, sales are good, and jewelry is holding its own,” describes Michael Lerche, COO of Goldstar Jewellery, based in New York City. “We’re having a good year, and it sounds like most retailers are doing well.” He notes that big retailers are doing well, because they sell price points and in volume. But independents cannot compete with that, and some are struggling. Deloitte cites that “balanced” retailers (which deliver value through a combination of price and promotion) are generally doing worse than either price-based retailers (which deliver value by selling at the lowest prices)
or premier retailers (which deliver value via highly differentiated product and/or experience offerings). Specifically, premium retailers have seen their revenues soar 81% over the last five years, while price-based retailers have seen their revenues steadily increase 37% over the same period. This contrasts with balanced retailers, whose revenue has increased only 2%. Deloitte reports that consumers are more likely to recommend premier or price-based retailers than balanced, suggesting that retailers at either end of the spectrum are more in tune with the changing needs and are better able to meet consumers’ expectations than those in the middle.
Staying focused on the needs of your customers is critical to success, says Jeffrey Cohen of KGS Jewels, based in New York City, whose company has been very attentive to its account base. “We have really tried to concentrate on concepts and styling specific to each of our clients targeted needs. In our case, less was more.”
Samantha Barker, Brand Communications Assistant Manager for Citizen Watch America, New York City concurs that honing in on what you do best is critical in today’s market. “Our business continues to be strong in all of our distribution channels as we maintain our No. 1 market share position in the $50 to $1,500 price point category.” She cites timely product introductions as important to the brand’s continued growth, noting its focus for 2018 has been its Promaster franchise in all categories—land, air and sea. Good traction in sales has lead to dedicated case space from some of its retailers to showcase the collection.
There is one thing that’s clear, cites Barker, anyone engaged in retail must embrace and invest in digital and advancing technology to be able to satisfy the needs of consumers today. Cohen concurs and encourages jewelers be willing to adapt to the buying patterns and habits of younger consumers.