The US retail sector is rubbing its hand together with collective glee with news the recent holiday season delivered the high sales that were expected.

Figures released by the National Retail Federation indicate holiday retail sales totalled $730.2 billion, putting them at the upper echelon of predictions and indicating growth of 4.1 per cent on 2018.

The welcome news arrived as a further NRF report revealed convenience is now a key factor that consumers seek.

So, let’s walk through the bumper holiday season and also examine the findings of the latest NRF Consumer View Report.

A bumper holiday

In October 2019,  the NRF released their sales predictions for the holiday season ahead, noting they anticipated holiday sales during November and December would increase between 3.8 per cent and 4.2 per cent for a total of between $727.9 billion and $730.7 billion.

The final figures were in the upper band of what was expected with actual sales growth of 4.1 per to total $730.2 billion.

This was almost twice the growth rate of 2018, with online sales leading the retail charge.

Statistics indicate:

• Online and other non-store sales were up 14.6 per cent year-over-year
• Grocery and beverage stores increased 2.9 per cent.
• Furniture and home furnishings stores were up 2.6 per
• Health and personal care stores were up 1.6 per cent
• Building materials and garden supply stores were up 1 per cent
• General merchandise stores were up 0.4 per cent

 

Areas faring less well and reporting slight reductions included:

• Sporting goods stores, which were down 0.4 per cent
• Clothing and clothing accessory stores – down 1.6 per cent
• Electronics and appliance stores – down 2 per cent

 

Noting the sales totals reflected a “healthy holiday period”, NRF Chief Economist Jack Kleinhenz said it indicated consumer confidence.

“Despite a late Thanksgiving and worries about tariffs, the consumer didn’t go away. We’ve had months of strong employment numbers, high wages and strong household balance sheets,” he said.

“There’s no doubt that gave consumers a sense of confidence about their ability to spend, and they did their part to keep the economy moving.”

In the meantime, the NRF has also released its latest Consumer View Report, looking at the role of convenience in modern retail.

Latest consumer findings

The latest Consumer View Report takes a deep dive into which factors impact purchasing decisions.

Conducted over winter and the holiday sales period, the report found quality ranks as the most important factor in most people’s purchasing decisions, with 32 per cent of survey respondents indicating it was the main reason they selected an item.

Low price was the second most important criteria at 30 per cent, while convenience ranked third (13 per cent), brand values came in fourth (12 per cent), and overall brand accounted for 11 per cent.

However, the concept of convenience proved an interesting one.

The role of convenience in retail

Although only one in 10 people indicated convenience was the main factor that prompted them to make a purchase, an astounding 97 per cent of shoppers noted they have backed out of a purchase because it was inconvenient to them.

Meanwhile, 83 per cent indicated convenience is now more important to them than it was just five years ago, and for some purchases, convenience is far more important than for others.

The report found groceries top the list of products where consumers seek convenience, with 63 per cent of survey respondents saying it was “very important” and 64 indicating they’d be willing to pay more for it.

Next was clothing. Almost half (47 per cent) said convenience was very important, while 61 per cent will pay more for it.

Third was electronics, with 42 per cent of people indicating convenience was very important, and 59 per cent noting they’d be willing to pay more for it.

Personal care products and also pet supplies were next on the list, with 41 per cent of people indicating convenience was very important when purchasing in either of these categories, and 58 per cent were willing to pay more for it when buying products.

When convenience counts

Finally, the report noted convenience matters more at some points of the purchasing journey than others.

In online retail, 38 per cent of people indicated convenience matters most in the research phase, that was followed by post purchase (23 per cent), then right before the purchase (20 per cent), and finally at the checkout 18 per cent.

In store, convenience matters most at the checkout (40 per cent), right before making a purchase (25 per cent), post purchase (18 per cent), and then in the research phase (16 per cent).

The final takeaway

As consumers feel more pressed for time, convenience now counts more than ever, and that’s only likely to increase in the coming years. As a result, consumers have welcomed initiatives like Buy Online Pickup Instore, but for many retailers there’s room for improvement, and the rewards will be worth the effort.

If retailers can offer a more convenience shopping experience, chances are consumers will pay more for the privilege.

Retail is alive and well, but changing rapidly. That’s the key message from this year’s NRF Big Show, which this week took place in New York.

Running from January 12-14, this year’s show was entitled NRF 2020 Vision and drew a record crowd of over 40,000 attendees from 100 countries representing 16,000 retailers – all of whom gathered to better understand the current state of retail and the future ahead.

Here’s a recap of just some of the highlights.

Alive and well

Opening the conference on January 12, NRF Board Chairman Chris Baldwin told attendees retail was alive and well, but changing quickly. He noted massive investment had been made in technology over recent years and for many retailers that was paying off, particularly in the arena of customer satisfaction.

Backing this claim, he cited NRF statistics that indicate 83 per cent of customers say convenience is more important than it was five years ago, and 60 per cent say retail’s investments have improved their shopping experience.

On the customer’s terms

Nordstrom co-president Erik Nordstrom took to the stage for an interview about serving the customer on their terms.

He noted digital versus online was barely relevant with a consumer. Instead, customers go back and forth looking for a singular experience.

More than half of Nordstrom sales have an online component and over one-third of its online sales involve a store experience, but the reason for having a physical store has changed significantly.

Nordstrom explained stores need to be more experiential and not just about picking up an item. In Nordstrom’s case, that’s led to innovations like a bar in a flagship store shoe department.

“People are smiling,” he said. “Strangers are talking to each other. We think a lot about shoes. I don’t know why it took us so long to put drinking and shoes together, but it’s a great combination.”

Syncing with today’s consumer

Today’s consumer is more diverse than ever before, and Bonobos and Universal Standard executives offered an insight into meeting that challenge.

They noted the industry is in the grip of change where inclusion will be part of the conversation – whether it relates to body size, gender identity, culture, or politics.

“I think what’s interesting is how fashion can help express the entirety of who they are,” Bonobos CEO Micky Onvural reflected. “We want to create a world where we all fit.”

Universal Standard provides clothing lines ranging in size from 00 to 40, with co-founder Alexandra Waldman noting retail was at a “tipping point”.

“Everything is about to be different, and we want to be part of that change. We want to spearhead the inclusion of everyone in the conversation, which has never been done before.”

A journey to sustainability

Sustainability is becoming a major driver of consumer behaviour as customers bring their ethical expectations to the purchasing table.

Retail executives from cosmetic co Lush and lifestyle brand West Elm took part in a conversation on the issue, sharing their journey of sustainability and covering concepts like ethical sourcing, handcrafted products, fair trade and reduced packaging.

Both noted the importance of building relationships with suppliers and reflected how their commitment had evolved and grown.

“It’s been an evolution, and it’s been a journey,” West Elm’s Jennifer Gootman explained. “I think for a lot of retailers that are really interested in this space, that’s important to recognize. Not everything happens at once. You can evolve and learn and figure out what’s material to your business and develop it from there.”

More insight and detailed accounts of the topics discussed at NRF 2020 Vision is available on the National Retail Federation website.

Know your loss

To devise the most effective anti-theft strategies, retailers need to know exactly where theft and loss is occurring.

For most retailers, the major cause of loss is shoplifting, which means understanding exactly which products are most likely to be targeted and using suitable techniques to mitigate the opportunity for theft.

Ascertaining this generally involves a deep-dive into both analytics and anecdotal evidence. In involves asking: which products most frequently encounter unexplained out of stocks? Which items generally attract shoplifter interest according to research? And which items are usually found on the shoplifters apprehended in your store?

While shoplifting currently ranks as the greatest contributor to loss throughout the sector, employee theft, supplier fraud and administration error also play a role. Combatting each of these also involves examining where and when shrink is happening and altering policies and procedures to address the issue or employing technology such as RFID to assist.

Protect at a product level

Product-based protection such as security tags, security labels, spider wraps and lockable cabinets are considered the most effective ways of protecting individual items against theft.

In fact, electronic article surveillance, involving the use of antenna, and security tags and labels, is one of the most comprehensive and popular anti-theft strategies available to the sector.

Now is the time to reflect on whether you are using this technology to its best effect, whether the tag or label suits the product in question and whether your EAS still meets your retail requirements.

Consider the vulnerable areas of your store

In addition to knowing what products are likely to be stolen, retailers should be looking at which areas are vulnerable within their store and addressing this through better layout, better lighting and available technology.

The shop floor, the fitting room, the Point of Sale, the storeroom and the supply chain are all key areas to look at, with technology available to assist in protecting each.

You can learn more about protecting the five vulnerable areas of a retail outlet here, but technology to consider includes security tags and labels, fitting room EAS protection, POS analytics, CCTV, RFID product tracking, and smart locks.

Screen and train staff

Staff play an integral role in deterring both shoplifting and employee theft. That means every employee should be adequately screened before gaining employment, then trained accordingly in the art of customer service and the signs to watch for when it comes to shoplifting.

Research indicates the simple act of meeting and greeting customers and being attentive to their needs combats customer theft, while staff who feel valued and are adequately compensated for their work are also less likely to steal.

Upgrade where required

As retailers consider which products are likely to be stolen and where in their store loss is occurring, it’s also the opportunity to gauge whether there are better, more effective systems and tools available and whether the current technology they employ needs upgrading.

Recent years have seen the retail anti-theft arena come on in leaps and bounds. In terms of electronic article surveillance, there are now high-strength tags available, magnet-resistant tags, all-in-one tags like the Alligator Tag, and also more intuitive antenna systems.

New innovations like the Apparel Guard make protecting the fitting room easier, improved analytics at the mobile Point of Sale make recognizing shoplifting trends simpler, and technology like RFID means products can be tracked and accounted for from the point of manufacture right through to the retail floor.

For more advice on anti-theft strategies for your store, see here, or shop our extensive range of security tags and security labels directly.