Unusual Holiday Season
The Big Picture
Although hopes of a second government stimulus package are fading, retail sales have continued to improve. Overall sales for September increased by 1.9%, a 0.6% improvement from August, according to U.S. Commerce Department figures. The boost came in parallel with growing consumer confidence.
What’s more, sales at clothing stores rose 11%, representing a large portion of the gains. Even department stores saw an improvement of 9.7% in September, which is surprising. We attribute much of these gains to pent-up demand as states reopened and shoppers felt more comfortable leaving their homes. Also keep in mind that these figures were against August, not last year.
Beating Plan
Among our better, independent stores we also saw increases, but they weren’t as dramatic. Stores that were able to land new product early saw gains in the mid-single digits, but some continued to face challenges when it came to receipts. That said, 45% of our clients beat their plans for September— a 50% increase in performance over the previous month.
In October inventory issues receded and sales have continued to improve, with better margins thanks to new fall merchandise. Stores located in the South and resort locations across the country continue to outpace city centers, where there are generally more coronavirus cases.
Holiday Ahead
Although sales will still be down compared to last year, we expect lighter decreases over the holiday season. It’s worth noting, however, that many shoppers have said that they plan to buy early due to potential shipping delays, which means that we need to be ready to go with new holiday inventory in early to mid-November. This needs to be followed by small, frequent drops of new merchandise through December.
We expect Knits, Sweaters, Outerwear and Winter Accessories to do well, but look at your 90-day trends to determine what’s selling for you.
This holiday will be unlike any other, so be ready for change. Be prepared to host many smaller events due to social distancing, as well as offering virtual presentations and curbside pickup. It’s hard to tell how comfortable shoppers will feel as winter comes and virus cases potentially spike.
The key is to be in constant contact. This season will be more spread out in terms of sales, with no big spikes. Keep customers engaged with newness.
