Industry Responds to Consumer Wish Lists with Value, Convenience and Service
Retailers in Levin Management Corporation’s (LMC’s) leased and managed shopping center portfolio anticipate solid 2024 holiday sales performance against a backdrop in which strong consumer confidence comes face-to-face with the realities of higher, inflation-driven pricing.
The North Plainfield-based commercial real estate services firm today released its annual Pre-Holiday Retail Sentiment Survey findings. The results reveal a price- and convenience-conscious environment, with retailers simultaneously offering more sales and discounts while becoming increasingly innovative in leveraging the benefits of the brick-and-mortar experience.
High Expectations Amid Record-Spending Forecasts
Overall, 66.4% of LMC survey participants are optimistic about their stores’ performance this holiday season, and nearly two-thirds of this group expects their 2024 holiday sales to be the same or higher when compared to 2023. A mere 6.3% of respondents are pessimistic about the 2024 season, with only 10.5% of that group expecting sales to be notably lower than 2023.
Studies by industry trade and research groups mirror this largely positive outlook. The National Retail Federation projects 2024’s holiday consumer spending will reach a record $902 per person average, when gifts, food, decorations and additional seasonal items are included. The organization forecasts spending growth between 2.5% and 3.5%, while PwC and Deloitte forecast spending growth of 7% and 2.3% to 3.3%, respectively.
“Retail is doing well generally, and that bodes well heading into the core holiday season,” noted LMC’s Matthew K. Harding, chief executive officer. “While seasonal forecasts are varied, they all anticipate record spending yet on a moderated growth trajectory. Through history, the holiday season has been prioritized by consumers as a time to spend extra on gifts for loved ones – and themselves. It appears this year is shaping up to be no exception.”
Peak Sales – Shifting Anticipation
Over the past decade, LMC’s survey findings have mirrored the evolving trend of consumers shopping early for their holiday gift-giving purchases. The 2024 poll breaks with this movement, with retailers’ expectations of early peak spending shifting significantly from recent years. This year, 35% of respondents anticipate their peak sales will occur during or prior to the Black Friday/Thanksgiving weekend, down from close to 50% in 2022 and 2023.
Further, 20.5% say they expect their peak sales to occur the weekend before Christmas, marking the highest percentage recorded in the LMC survey since 2012. The poll – now in its 13th year – has tracked a trailing average of just about 15% of respondents expecting peak sales to occur that late in the game.
“Although our survey didn’t explore why retailers’ peak period expectations may have changed, the 2024season does have some distinctive attributes,” noted Harding. “This included the presidential election – which could have impacted the earliest spending boom – and a shorter-than-usual shopping period between Thanksgiving and Christmas.”
Balancing Value, Innovation and Tradition
When LMC survey participants ranked various factors likely to impact seasonal performance, inflation was at the top of the list. And nearly 32% of respondents say they will have more holiday sales and discounts compared to 2023, a 12.6% spike from last year and likely a reflection of this year’s more cost-sensitive climate.
Regardless of whether their customers are tightening their budgets or ready to splurge, retailers are working to meet demand for convenience – and experience. Nearly 38% of survey participants said they are trying new ways to enhance their customers’ holiday shopping experiences, such as in-store services, loyalty programs, same-day delivery, or online purchasing with curbside or in-store pickup. In an increasingly omni channel retail world, 62.5% of respondents now offer an online option for purchasing goods, scheduling appointments for services or placing orders for pick-up.
“We have seen a distinct shift from the conversations about ecommerce growth cutting into brick-and-mortar success to an acknowledgement that providing a range of channels benefits all, by enabling consumers to shop in whatever combination of in- store and online best meets their needs,” said Harding. “The formula for success this season will be balancing innovation with tradition.”
That tradition can be found in the distinctive appeal of brick-and-mortar holiday shopping. Survey participants were asked to rank the advantages of the physical store environment during this key season. Topping the list are:
- In-person customer service and
- Product discovery (touch/feel/try-on).
- The convenience and gratification of “getting it ”
“People like to shop in person during this festive season,” noted Harding. “In addition to the best prices, they also are looking for convenience and service. Savvy retailers that can balance value with ‘all of the above’ benefits of brick-and-mortar will be well positioned for a bright and merry holiday sales outcome.”
For seven decades, LMC has served as a trusted single-source commercial real estate services provider for institutional and private owners. The firm’s next Retail Sentiment surveys, which poll retail store managers in the LMC’s 125-property, 16 million-square- foot leasing and management portfolio, will be conducted in January, exploring 2025 outlooks, and in June, gauging mid-year performance and technology trends. The award-winning research program reflects the firm’s commitment to understanding issues and opportunities impacting retailers from a street-level perspective.
