Chicago - Bolstered by improving consumer confidence and unemployment numbers, retailers are expressing increased optimism for Black Friday and Cyber Monday sales. According to a survey of top retail chief marketing officers by BDO USA, LLP, retailers project a 3.1 percent increase in sales on Black Friday. This optimism follows last year's modest projection of 1.6 percent growth, which preceded record sales over Thanksgiving weekend.
In 2011, Cyber Monday marked the biggest online spending day in history, with sales topping $1.25 billion. While it was followed by several more billion-dollar online shopping days, retailers expect it will be another banner event this year. CMOs anticipate a 4.3 percent increase in Cyber Monday sales, the largest projected increase in the survey's history. The optimism surrounding Black Friday and Cyber Monday aligns with retailers' broader positivity heading into the holiday shopping season. However, strong Thanksgiving weekend sales will not come without heavy promotions. A majority of CMOs (66 percent) expect an uptick in discounts and promotions this holiday season.
"Retailers have learned to adapt to new consumer realities and shape them to their advantage," says Ted Vaughan, partner in the Retail and Consumer Products practice at BDO USA, LLP. "Consumers are looking to spend, and retailers are responding by offering a broad mix of offline and online deals not just on Black Friday and Cyber Monday, but throughout the season."
These findings are from the most recent edition of the BDO Retail Compass Survey of CMOs, which examined the opinions of 100 chief marketing officers at leading retailers located throughout the country. The retailers in the study are among the largest in the country, including 20 retailers in the top 100 based on annual sales revenue. The telephone survey was conducted in September and October of 2012.
Additional findings of the 2012 BDO Retail Compass Survey of CMOs include:
Email promotions and free shipping are top online sales triggers. Retailers are casting a wide net to reach their customers online and will offer a variety of incentives for online holiday shoppers. Over one-third (34 percent) of survey respondents cite free shipping as their top tactic to generate online sales, and 31 percent cite email promotions. Now that "Free Shipping Day" has become a mainstay of the holiday calendar, CMOs at the top 100 largest retailers by revenue indicate an overwhelming preference for free shipping promotions. Despite the strain it can place on margins, 70 percent say they expect it to be their top driver of online holiday sales.
Retailers hope to bolster sales with in-store-only deals. When asked which promotional tactic they will focus on to draw customers into their brick and mortar locations, most retailers (66 percent) identify in-store exclusive deals. Despite the emerging trends of exclusive in-store brands and retail partnerships, retailers understand that value remains a top priority for consumers who are looking to stretch their dollars as much as possible during the holiday season.
Consumers to receive equal share of online and offline promotions. With more and more consumers expecting a cohesive brand experience across multiple platforms, a plurality (44 percent) of retailers say they will devote equal efforts to online and in-store campaigns. However, getting shoppers in stores is still a major priority for 41 percent of retailers, who will focus the majority of their promotional activities on in-store deals. Consumers can expect to see extended store hours, doorbusters and loyalty rewards again this year.
The BDO Retail Compass Survey of CMOs is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to chief marketing officers using a telephone survey conducted within a scientifically-developed, pure random sample of the nation's retailers.
Material discussed in this release is meant to provide general information and should not be acted on without professional advice tailored to your firm's individual needs.
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