Jennifer Mancuso, store sales manager for Orloff Jewelers shows off some of the watches for sale at the Fig Garden store. While she has only been at Orloff for a number of months, her extensive background in jewelry lets her take time to help her customers, one of the reasons that brought her to Fresno from the Bay Area. Photo by Edward Smith.
Written by Edward Smith
It wasn’t Halloween before retailers began moving the ghosts and ghouls aside to bring out Christmas lights, toys and trees.
Earlier seems to be one thing forecasters can agree on when it comes to holiday shopping after a less-than-expected shopping season in 2018. Economic prophets predict sales growth at numbers varying from 3.8% to 6%, differing as to the effect political and trade uncertainties will have on consumers’ wallets. And bricks-and-mortar stores have an uphill battle to seize a shrinking market against online shopping, but still have a few tools in their belt to compete.
“The retailer has to get out there early before the rest of the world does, before the internet does, so they can create their own type of buzz,” said James Orloff, CEO of Orloff Jewelers in Fresno’s Fig Garden Village.
While Orloff wishes he could wait until Thanksgiving to start putting up the tinsel, he sees online competitors rolling out holiday deals and he has to react. Economic forecast company Kiplinger put a quarter of consumers as starting their shopping before October. In particular, jewelry sales between Thanksgiving and Christmas used to make up a third, but now total only a quarter.
“I wish it was more like in the old days when we would complain about the department stores putting up Christmas and Thanksgiving, but now we’re dealing with too many other variables,” Orloff said.
Rob Fox, owner of Professor Toy in Fresno, sent out his toy catalog earlier this year than last. He says starting earlier actually gives him an advantage because he can see what is popular and can gauge what he needs to be ordering.
However, tariffs on imports are causing prices to be passed down the line. Some vendors told Fox goods not ordered before November might see price increases.
Kiplinger anticipates a robust 6% sales growth year-over-year following 2018’s mere 2.3% gain. The forecast letter acknowledges growth of economic risks and a slowing GDP, but takes more into account low unemployment and rising wages to justify what would be the strongest sales growth since 2004, according to U.S. Census data.
The National Retail Federation, however, puts a more modest 3.8-4.2% prediction, giving more credence to dropping consumer confidence. That totals an increase of between $727.9 billion and $730.7 billion. The Foundation excludes auto, gasoline and restaurant sales.
“The U.S. economy is continuing to grow and consumer spending is still the primary engine behind that growth,” NRF President and CEO Matthew Shay said in an October release. “Nonetheless, there has clearly been a slowdown brought on by considerable uncertainty around issues including trade, interest rates, global risk factors and political rhetoric. Consumers are in good financial shape and retailers expect a strong holiday season. However, confidence could be eroded by continued deterioration of these and other variables.”
UPS announced it would waive holiday delivery fees this year after beefing up operations, according to the Motley Fool. FedEX didn’t charge extra in 2016-18, and is expected to continue the trend into 2019. This will help online purchases grow an anticipated 24% year-over-year, according to Kiplinger. They predict online purchases will make up a fifth of all sales this year.
One shopping method that has become popular is buying online and picking up in store. Sixty percent of retailers will offer this versus 52% last year.
Author and marketer Deb Gabor of Sol Marketing says this is a great way for purveyors to demonstrate to shoppers the advantages of buying in-person.
“At a time when still more people are actually shopping in physical retail during the holidays, the smart retailers are the ones that are going to use that as an opportunity to increase their value to shoppers with something that only in-store sales can do,” she said.
People purchase with their hearts, minds and wallets, in that order, Gabor said. Businesses that offer free gift-wrapping or extended hours can create an “irrational loyalty” that creates a bond with shoppers. Irrational loyalty can cause people to disregard price and almost feel guilty when they shop somewhere else.
Orloff echoes this sentiment. What has been successful for him is his employees have become more teachers than salespeople. Online shoppers only know what to look for based on what the internet says. In-store shoppers can spend time with sales people to discover what they actually like.
“They get to meet the people that they are working with in the store and they find a connection to people,” Orloff said. Shopping is still a social experience, he says.
Gabor says what physical stores have to overcome is the perception of inconvenience.
“The biggest barrier to convenience is the line,” she said. “And more stores are moving toward mobile payment.”
People respond to the local business aspect, said Fox. He uses services like gift-wrapping to bring people to the store.
For many companies, capturing those holiday sales means the ability to weather what some feel will be a tumultuous 2020 with ongoing trade battles and an election year.
“We’re finding that people coming in, they have a lot to say about what’s going on,” said Orloff. “Everybody wants to have a positive year amongst all the turmoil that’s plaguing our country right now. I think people are looking forward to a happy holiday season.”