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Target, REI, H&M Take On The Holidays In Unique Fashion

Will the recent terror attacks in Paris have a dampening effect on holiday sales? What other factors will impact holiday shopping in 2015? Retail TouchPoints has been following all the news and predictions around what to expect this year, and in this article you’ll find a comprehensive collection of predictions, implementations and strategies.

Most forecasters continue to predict that the 2015 season will be a robust one for retailers. Lower gas prices are putting more dollars in consumers’ pockets, and rising confidence is making shoppers more willing to take that money out of those same pockets.

For their part, retailers are turning the volume up to “11” with promotions and offers such as free shipping and returns. They are also leveraging mobile, attempting to meet consumers wherever they are in the course of their often fragmented shopper journeys. Retailers large and small are also getting smarter about their use of social networks, both to more accurately track consumer trends throughout the season and to try and influence shoppers at key decision points.

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Target, for example, is targeting shoppers’ “hearts” to generate mobile sales. Using the “heart” icon, customers can bookmark items, while the retailer gathers the data to make more targeted future product recommendations. Target also is making greater use of user-generated content from social networks such as Instagram, providing shoppers with the ability to see what’s trending in real time and simplifying “social shopping” processes.

In the higher-tech realm, IBM has been busy. In addition to recently purchasing The Weather Channel to help retailers more accurately personalize offerings, the company has launched the IBM Watson Trend App, which scans 10,000 sources across the Internet to provide consumers with trend information, and to predict the hottest items for the season.

Forecast: Strong Sales Ahead

Multiple sources indicate 2015 will show significant improvement over last year’s holiday season, including:

• The National Retail Federation (NRF) projects November and December sales (excluding autos, gas and restaurants) will climb 3.7% over 2014’s total for the same period, reaching $630.5 billion. Online sales are forecast to increase between 6% and 8%, reaching as high as $105 billion.

• The MasterCard SpendingPulse projects a 4% increase in holiday sales, citing its survey revealing that three-quarters of consumers are either equally confident, or more confident, this year than they were last year.

• 40% of U.S. consumers plan to spend more on their holiday shopping this year compared to 2014, a substantial increase over the 25% who said they would increase their holiday spend the previous year, according to the Accenture Holiday Shopping Survey.

RetailNext forecasts a 2.8% year-over-year increase in in-store sales during the holiday season, with a 16.2% boost in digital sales as a primary driver.

ShopperTrak forecasts in-store sales will climb 2.4% during the 2015 holidays compared to 2014, with more sales occurring early in the season (in November prior to Thanksgiving).

Turkey Day Shopping Backlash?

Speaking of Thanksgiving, 2015 has seen at least a partial retreat from the trend of brick-and-mortar stores staying open on the holiday. REI has gone the furthest with its #OptOutside initiative, providing its 12,000 employees with a paid holiday on both Thanksgiving and Black Friday, encouraging them (and by extension their customers) to enjoy the outdoors rather than shop.

In addition, for the first time, H&M will close its U.S. stores on Thanksgiving day, joining Costco, GameStop, Petco and Sam’s Club. Still, major retailers including Macy’s, Target and Best Buy will keep their stores open on the holiday.

Retailers closing their doors on Thanksgiving may be motivated by the desire to give their employees a break before the holiday madness truly kicks in, and/or to be seen as a progressive, family-friendly company. But a larger reason is that, vital as in-store sales still are, the holidays are truly digital commerce’s time to shine.

Digital Dynamism

MasterCard’s data indicates that during the 2014 holiday season, nearly 8% of total sales were online, compared to a 6.3% average for the full year. Digital devices inform 80% of consumer purchases, and 60% of consumers report they are doing more online research than in the past.

Globally, web site visits are projected to increase 22% during this holiday season compared to 2014, according to Demandware. Increasingly, the devices being used are phones rather than desktops, laptops or even tablets. Phones’ percentage of peak season traffic rose from 23% in 2013 to 33% in 2014, and Demandware projects it will hit 47% globally this year.

The rise of digital commerce lowers the stakes regarding the decision to keep stores open on Turkey Day, but it puts added pressure on retailers to have a comprehensive digital marketing program for the entire week surrounding the holiday (as well as the entire season, of course). Now more than ever, brick-and-mortar retailers need to focus on the entire Thanksgiving week to build momentum into the rest of the holiday season, according to Shelley Kohan, VP of Retail Consulting at RetailNext.

“The event is now a weeklong endeavor so planning accordingly will eliminate reactionary price reductions that diminish margins,” said Kohan. “While Black Friday, Super Saturday and Cyber Monday will still have starring roles, the best strategy to optimize sales will be with a well-laid out plan for the week.”

Finally, while this holiday season may be a boon for retailers, it might not be as immediately beneficial for those making the actual products that are given as gifts. SAS reports that gift cards, rather than any actual item, are the number-one gift choice for consumers overall. Toys and games come second, followed by apparel.

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