How high will the holiday retail sales ball bounce in 2019?
How are retail holiday selling season sales like a bouncing ball?
Roshan Varma, a director in the retail practice of AlixPartners, said that sales during the past five Christmas seasons have been “up one year and down the next.” The ups, just like a bouncing ball, however, have been “lower and lower.” So, how high will the retail sales ball bounce this year?
Separate forecasts by AlixPartners and Deloitte point to a strong holiday season with sales up as much as 5.3 percent and five percent respectively over last year.
AlixPartners’ forecast, however, comes with caveats.
Joel Bines, managing director at AlixPartners, described the “unprecedented uncertainty” surrounding the holiday season.
“From on-again, off-again tariffs, to a growing chorus concerned about a recession, a looming election and geopolitical uncertainty, this season is unlike any in recent memory,” said Mr. Bines. “While our forecast is bullish, we are nevertheless advising clients to be nimble. These are uncharted waters, and the best course to set is one that includes strong cost control and flawless execution.”
One element that bodes well in year-over-year comparisons is that sales fell off last December in part because of President Trump’s decision to shut down the federal government. A similar event is not expected this year.
Adam Pressman, a managing director at AlixPartners, addressed retailer moves into new businesses with the holiday season approaching.
“Models such as subscription services and resale programs and services might be ways that both traditional and digital-native retailers can drive success this holiday season and beyond,” said Mr. Pressman.
“Any program or model is only as good as the planning that goes into it, its implementation and its ongoing execution,” Mr. Pressman added. “Such efforts should be deployed in a manner where the focus is on the customer and how to message and engage with them in a manner that truly drives value for both them and the retailer.”
DISCUSSION QUESTIONS: Are you bullish or bearish on the upcoming Christmas selling season? What economic, geopolitical or other factors do you think are most likely to affect sales in the last two months of 2019?