Retailers to Focus on Buy-Online, Ship-To-Store Holiday Strategies

According to CBRE, U.S. retailers will seek to cap a strong year this holiday season by doubling down on strategies to draw online shoppers into stores, reward their loyalty in new ways and ensure that toys are available at every turn.
 
CBRE's annual Holiday Retail Trends Guide found a common theme connecting several of the strategies prepared by retailers for this season: Enhanced capabilities to seamlessly cater to shoppers in stores, online and on their mobile devices.
 
"Retailers are in for happy holidays this year, as a healthy economy and strong consumer confidence should yield a big holiday spend. In Manhattan, the declining rents and increased number of stores available for rent have created new opportunities for many retailers to experiment and take risks that should pay off this season," said Nicole LaRusso, Director of Research and Analysis, CBRE Tri-State. "Specifically, retailers that are shifting to omnichannel strategies should see a big pay off this year, as shoppers increasingly look to toggle from online, to mobile, to in-store when it comes to purchases and exchanges. Retailers are seeing that success online and success in brick-and-mortar stores go hand-in-hand and are both a part of a successful business strategy."
 
In New York City, the retail sales growth rate was 3.1% during H1 2018, up from 2.4% during the same period of 2017.
 
CBRE's 2018 U.S. Holiday Trends Guide outlines four trends shaping this season as it unfolds:
 
The Optimistic Shopper
 
The strong economy and near-full employment helped push retail sales growth to a six-year high in this year's first half, which in turn has generated forecasts of healthy retail-sales gains of up to 4.8% for the holiday season. Retailers excelling in this environment mostly are those so proficient at selling across multiple channels that few of their transactions are strictly in-store or online anymore.
 
Buy-Online/Ship-To-Store (BOSS)
 
For several years, retailers have promoted their buy-online/pickup-in-store programs, which focus on merchandise already stocked at the store level. This season, the latest evolution of that strategy - buy-online/ship-to-store, or BOSS - allows shoppers to select from a wider inventory of merchandise stocked at the retailers' warehouse to be delivered to their nearest store. Retailers including Macy's Inc. and Kohl's Corp. are betting that BOSS will both cut their delivery costs and generate add-on sales to shoppers who visit stores to pick up their orders. Key to BOSS' success will be the incentives retailers offer shoppers to use it.
 
Experience The Rewards Of Loyalty
 
Retailers are enhancing their loyalty programs to retain shoppers, and their sweeteners of choice are experiences and access. Retailers including Macy's, Sephora, Nordstrom Inc., Target and L Brands' Victoria's Secret have upgraded their loyalty programs this year to reward shoppers with perks such as access to exclusive events like fashion shows. In Sephora's case, that includes meetings with its founders. The trend underscores retailers' efforts to build stronger connections between their shoppers and their brands.
 
Toys "R" All Of Us
 
The closure this year of Toys "R" Us' stores cleared the way for a wave of opportunistic retailers to fill the void. Several leading retailers such as Walmart and Target are expanding their toy sections. Meanwhile, others that aren't widely known as toy sellers, including Michaels, Party City and Ace Hardware, are jumping in with limited toy offerings. At stake are $1.3 billion in sales in the fast-growing toy category.
 
"This looks to be a strong holiday season for retail for several reasons," said Brandon Famous, Chairman of CBRE's Global Retail Occupier Executive Committee. "In addition to the tailwinds of the robust economy and strong consumer confidence, retailers as a whole have gotten smarter and more efficient with their omnichannel strategies and their programs for attracting and retaining customers."