As we approach the 2014 holiday season, retailers are hoping they will be on Santa’s nice list, as many are expressing restrained optimism about sales this year.
According to new research by global management consultancy Hay Group, nearly one quarter (24%) of retailers expect significant increase (5% or more) in year-over-year sales during the 2014 holiday season. And 70% are predicting sales will be similar to the 2013 season. Hay Group said that seasonal hiring plans also reflect this cautious optimism, as emphasis has shifted from seasonal to permanent workers: 24% of companies plan to hire more permanent staff in 2014, compared to 13% in 2013.
“Retailers have their fingers crossed for a strong 2014 holiday season,” said Craig Rowley, Vice President and Global Practice Leader for Hay Group’s retail practice. “In the meantime, however, they’re acting prudently. Though we’ve seen GDP jump by more than four percent in the second quarter, the same economic bump hasn’t yet translated to the retail sector. Foot traffic remains slow, and back-to-school shopping had a slow start this year, so retailers are being careful in their holiday season planning.”
Omnichannel is driving a lot of change, as well as heavily influencing staffing strategies for this year season. Almost half (47%) of surveyed retailers have pinned down an omnichannel strategy for 2014, compared to just 14% in 2013. At a reported 71%, most retailers will be relying on their mobile platform to help drive holiday sales.
This focus on omnichannel will be reflected in the hiring approach. Retailers increasingly want to hire seasonal staff who identify closely with their brand culture, and 59% of retailers say that their omnichannel strategy has impacted staff training. In addition, nearly 3 times as many retailers (24% vs. 9% in 2013) are hiring seasonal staff to support multi-channel efforts. For example, 29% will increase seasonal staff in distribution centers.
“Retailers can no longer settle for point-and-sell stockers when it comes to staffing their stores," said Maryam Morse, National Practice Leader for Hay Group’s retail practice. "Consumers now expect a seamless shopping experience across channels. To respond to this demand, retailers must have well-trained and nimble in-store employees who can serve as true brand ambassadors, leading customers to the point of sale, regardless of where the product resides."
Finally, retailers are indicating that their holiday promotions are creeping earlier and earlier into the year. Over half (53%) will begin promotions in early September (18 percent vs. 13 percent in 2013) or October (35 percent vs. 22 percent in 2013) this year.
All in all, retailers will be promoting their holiday offerings earlier this year, with cautious optimism and a focus on enhancing the customer experience through omnichannel.
“Retailers are stepping up to the omnichannel challenge this year in an effort to drive sales from what’s proving to be a very disciplined consumer,” said Rowley. “Even so, the 2014 holiday season is likely to be a testing ground for many large retailers as they try to get a better grasp on what today’s consumer is going to buy, where they’re going to buy it and how they want to receive it. Retailers who come out on top will be those with the flexibility to quickly adapt to customers’ needs across a variety of channels.”