November 6, 2021
The National Retail Federation gods have spoken, and it’s official: This Holiday season is going to be a doozy.
NRF’s holiday forecast – which is based on (among other things) analysis of employment, wages, consumer confidence, disposable income, consumer credit, previous retail sales and weather – predicts a record-breaking November and December, during which holiday sales will grow between 8.5 percent and 10.5 percent over 2020. In dollars? That’s as much as $859 billion.
So why the surge? NRF cites a variety of reasons, but the biggest is momentum. “Consumers are in a very favorable position going into the last few months of the year as income is rising and household balance sheets have never been stronger,” says NRF President and CEO Matthew Shay. Apparently we’re entering into a time of “considerable customer demand.”
This has huge implications for store teams, of course, but even bigger implications for the kind of communication that will be needed to keep those teams informed, agile, and engaged during what’s shaping up to be an unprecedented holiday season.
NRF points to a variety of factors that could continue to shape the trajectory of consumer spending throughout November and December. Below we’ve broken down four of the biggest, and how we see communication playing a role in enabling front line teams to navigate their impacts:
“If retailers can keep merchandise on the shelves and merchandise arrives before Christmas,” Kleinheiz says, “it could be a stellar holiday sales season.” But this seemingly innocuous requirement is actually far more complex in the light of recent supply chain disruptions.
It seems everywhere you turn these days there’s another article urging shoppers to start their holiday shopping now. The reason is obvious: the pandemic has snarled every inch of the global supply chain. Shipping containers are stranded atop cargo ships off the California coast, and if goods do make it into port – well, there are no drivers to drive them to stores anyway. Add to that a serious dearth of warehouse workers and retail associates, and it all adds up to a pretty bleak picture.
For retailers, this will likely manifest in a variety of strategies, including: reducing the number (or penetration) of time-honored holiday sales, implementing proactive communication to customers warning of shipment delays and limited stock, and pulling inventory down sooner to appease consumers who want to shop earlier in the season.
In all of the above cases, timely and accurate communication to stores is non-negotiable. The knock-down effect of a product shortage, for instance, is huge: stores would need to flex their merchandising strategies, pull new product forward and swap out displays, and maybe even need to offer discounts to appease certain customers. All of this direction would need to be delivered to store teams in a way that’s visible and instantly actionable. This information can’t be buried in a back room binder.
In the past two years, the pandemic has ebbed and flowed – much to the chagrin of consumers and scientists alike. Given how many Americans remain unvaccinated, and how much remains unknown, it makes sense to stay cautious. “While it appears new COVID-19 infections and hospitalizations are down, a variant surge could potentially sidetrack the current trajectory of spending,” says the NRF report.
This means that retailers (and their store teams) will need to remain vigilant, prepared to shift policies and procedures at a moments’ notice. Masks that are optional one day may be required the next. Companies may choose to double-down on vaccine requirements for employees. Responses to a variant surge would likely differ from region to region, too. In order to be fully prepared, retailers will need to implement a localized communications strategy capable of delivering different directions to stores in different areas. Whatever the change, an agile communications platform that can deliver critical updates in real-time will be essential.
Is there anything retail leaders love more than analysing the impact of weather? (Who knows – maybe every store leader really missed their calling as a meteorologist.) For decades, retailers have been known to base sales bets on whether or not parade-goers in front of the Herald Square Macy’s are wearing earmuffs or short-sleeves on Thanksgiving Day. Like it or not, weather always plays a role in holiday sales.
This year, the National Oceanic and Atmospheric Administration is predicting a high likelihood of a La Niña pattern of cooler and wetter weather in the north and warmer and drier weather in the south. “This climate phenomenon has in the past correlated with stronger retail sales and could be a factor in 2021,” explains NRF. But weather, like everything else in retail, is fickle.
Keeping employees in the field up-to-date on shifting weather patterns isn’t just about displaying sweaters one day and flip-flops the next. It can also be a matter of safety. Snowstorms and other inclement weather can cause store locations to lose power (bye-bye, POS) or flood (hello, early closures). During the time of year when every transaction counts, it’s more important than ever that retailers communicate inclement weather procedures clearly and accurately. Ideally, these types of communications are available on a mobile device, so team members have the proper information in the palm of their hand at all times.
NRF expects retailers will hire between 500,000 and 665,000 seasonal workers, compared to 486,000 seasonal hires in 2020. Already many retailers have announced thousands of open positions in brick-and-mortar stores as well as warehouse and distribution centers, with some dangling perks like free college tuition and high starting wages in front of a dwindling number of applicants.
Increased demand for seasonal workers begets a new kind of communications strategy for retailers – one focused on “in the moment” learning so new hires can jump in and make an impact without needing to endure hours-long training first. In a world dominated by labor shortages, retailers will need to accomplish more with less this holiday season. That means giving new employees just enough information to address the tasks at hand, without eating up too much of their time (and valuable labor hours!) with cumbersome training. It almost goes without saying: communications and learning management technology is essential to be able to engage a fleet of frontline workers in this way.
Planning your own holiday communication strategy? Consider Zipline as your one-stop shop; your vehicle to deliver the seasons’ top priorities and initiatives in real-time along with task and readership reporting to help keep everyone across the fleet on track. If you’d like to learn more about how Zipline can help during this time of year, reach out today.
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