CHICAGO--(BUSINESS WIRE)--Despite some early season promotions, retailers still expect consumers to be active for the official start of this year’s holiday shopping season. According to a survey of top retail chief marketing officers by BDO USA, LLP, retailers anticipate a 3.1 percent increase in sales on Black Friday this year, mirroring their projections from last year. However, retailers have moderated their expectations for growth in Cyber Monday sales, predicting that sales will grow by 3.7 percent this year, down slightly from last year’s sunnier 4.3 percent growth projection.
Retailers’ expectations for Thanksgiving Weekend sales reflect the shifting character of Black Friday & Cyber Monday as more retailers plan to open stores earlier on Thanksgiving Day, and as some brands such as Wal-Mart and Amazon emphasize online deals throughout the season. Though in-store sales declined last Black Friday, retailers still posted considerable gains in online sales that day, with IBM Digital Analytics Benchmark reporting a whopping 20.7 percent increase last year. This highlights the ongoing shift in consumer preferences from brick-and-mortar to the convenience of e-commerce, particularly on a day known for long lines and large crowds. Moreover, there were 12 days during the 2012 holiday season that saw over $1 billion in e-commerce sales, according to comScore, proving that consumers are clicking beyond Cyber Monday.
“Retailers understand that consumers are no longer limiting their shopping just to Black Friday and Cyber Monday,” says Ted Vaughan, partner with the Retail & Consumer Products practice at BDO. “Though they remain important shopping days, retailers feel less pressure to post major sales gains on these two days alone, and instead are focusing on offering a compelling experience for shoppers throughout the season.”
These findings are from the most recent edition of the BDO Retail Compass Survey of CMOs, which examined the opinions of 100 chief marketing officers at leading retailers located throughout the country. The retailers in the study were among the largest in the country, including 11 retailers in the top 100 based on annual sales revenue. The telephone survey was conducted in September and October of 2013.
Additional findings of the 2013 BDO Retail Compass Survey of CMOs include:
Despite headlines, most retailers don’t plan to begin holiday promotions early. Several major retailers, including Wal-Mart, began prepping for the holiday season in early September, prompting headlines about “holiday creep.” Yet many retailers, including Target, experienced consumer backlash over early promotions last year, prompting them to move back toward a more traditional promotional timeline. Our survey found that only 13 percent of retailers plan to begin their holiday promotions ahead of Black Friday, fewer than the proportion who don’t have any promotions lined up at all (16 percent) and equal to the proportion that plan to concentrate their promotions over the Thanksgiving weekend. And, further highlighting the decreasing emphasis on Thanksgiving weekend, half say they will spread their promotions evenly throughout the season. Regardless of timing, consumers can expect to see a growing number of discounts this holiday season: A majority of CMOs (63 percent) anticipate more deals this year.
Retailers still prioritize in-store sales. Though e-commerce has proven itself a powerful vehicle for sales during the busy holiday season, retailers still hope to attract shoppers to brick-and-mortar locations. A plurality (47 percent) of CMOs plan to focus the majority of their promotions in-store, a 15 percent increase over last year, outpacing those who hope to focus online (13 percent) or equally across channels (39 percent). However, consumers can expect to see a broader variety of promotions to get them in stores. Last year, 66 percent of CMOs pointed to exclusive in-store deals as their favored tactic; this year, that number declined to 38 percent. Meanwhile, the percentage of CMOs citing exclusive in-store brands and partnerships—such as H&M’s much-anticipated collaboration with designer Isabel Marant—doubled this year, and the proportion of retailers citing extended hours tripled.
Social media promotions are growing more prominent. Free shipping remains a top online sales trigger for retailers, with a plurality (38 percent) citing it as their preferred online promotional tactic. Many retailers that have previously shied away from free shipping, such as Neiman Marcus, are now making it a standard feature for online orders. However, retailers are increasingly turning to social media to drive sales. This year, 20 percent of CMOs cite social media promotions as a top tactic, a 43 percent increase since last year and a doubling since 2009. Simultaneously, email promotions were cited by only 20 percent, down from 31 percent last year. Email is becoming an increasingly difficult way to get in front of consumers as providers, such as Gmail, begin to filter promotional emails out of users’ primary inboxes.
The BDO Retail Compass Survey of CMOs is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to chief marketing officers, using a telephone survey conducted within a scientifically-developed, pure random sample of the nation’s retailers.
About BDO
BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through 50 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 1,204 offices in 138 countries.
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit: www.bdo.com.
