NRF forecasts 4.1% rise in retail sales for 2014, online to grow
WASHINGTON — Retail industry sales — which exclude automobiles, gas stations, and restaurants — will increase 4.1% in 2014, up from the preliminary 3.7% growth seen in 2013, according to the National Retail Federation. The association’s 2014 economic forecast, released Thursday, calls for online sales to grow between 9% and 12%.
A number of factors contributed to NRF’s 2014 economic forecast, including:
- Economic growth is expected to be above its long-term historical average. Early estimates for growth in the economy as measured by real GDP could fall between 2.6% and 3%, a noticeable improvement from the estimated 1.9% rate for 2013, and the fastest pace in the past three years.
- The labor market is expected to continue its modest recovery averaging approximately 185,000 jobs per month, helping decrease unemployment to near 6.5% or lower by the end of 2014.
- Inflation as measured by the CPI is predicted to inch higher to as much as 1.7% in 2014.
- The housing sector is expected to continue to improve in 2014, and stronger household and business confidence should spur more consumer spending overall.
“The economy remains susceptible to buffets as we are already witnessing in the New Year, thanks to harsh winter weather, domestic and global financial issues,” NRF chief economist Jack Kleinhenz, said. “While we are careful not to ignore the challenges, we are optimistic and hopeful that future disruptions will be limited, allowing employment and business investment to grow all the while giving retailers and their customers the confidence in the economy they need.”
Out in the cold
For those of us living in the Midwest — and perhaps throughout the country — we have become familiar with a weather term "polar vortex." No doubt you've heard the phrase pinging around the news media in recent weeks. One of the coldest Arctic outbreaks in two decades has blanketed a significant portion of our country, bringing bitterly cold temperatures to the Midwest, South, and East.
This unusually cold weather has likely put a deep freeze on retail sales, also. Not only did the retail sector experience a lackluster holiday shopping season, but now they are also hit with the reality that some shoppers are simply not going out into the cold. The winners may very well be online retailers.
What could this signal for traditional brick-and-mortar operators? It’s time to develop an omnichannel strategy before it’s too late. I’m not suggesting that these retailers dip their toes into the icy water, but rather they take a polar plunge … without hesitation.
Here are five strategies for retailers who want to get started:
- Make it personal – engaging customers in a dialogue across all of their desired platforms in a consistent, meaningful way is paramount
- Create synergy – the mobile and in-store experiences should appear seamless (disparity will undermine clarity)
- Tap social media – reach shoppers when and where they are through effective alignment of social media assets and transactional sites
- Reward shoppers – offer reasons for shoppers not only to be loyal, but to keep coming back, bringing others with them
- Assortment strategy – consistently display products with up-to-date images, content, and details to make shopping easier while guiding a shopper’s path to purchase to fill their market basket
The evolution towards an integrated physical, digital, mobile, and social shopping experience is underway. Retailers are increasingly moving towards cross-channel customer experiences. It will be interesting to see what happens and what works – but the chill of this winter should motivate many to get moving.
Hamacher Resource Group vice president Dave Wendland, a 20-plus-year retail industry veteran, is a popular presenter and discussion facilitator available to speak at corporate and association events on a variety of retail-related topics. HRG is a research, marketing and category management firm specializing in consumer health care at retail. Product manufacturers, healthcare distributors, retailers, technology partners and others rely on HRG for strategic and creative solutions to help build their business. Learn more at www.hamacher.com.
Coca-Cola, GMCR enter partnership
ATLANTA and WATERBURY, Vt. — Coca-Cola and Green Mountain Coffee Roasters have signed a 10-year agreement to work together on the development and introduction of Coca-Cola’s global brand portfolio for use in GMCR’s upcoming Keurig Cold at-home beverage system.
Under the agreement, the companies will cooperate to bring the Keurig Cold beverage system to consumers around the world. The companies also entered into a Common Stock Purchase Agreement; Coca-Cola will purchase a 10% minority equity position in GMCR.
As part of the strategic partnership, GMCR will be Coca-Cola’s exclusive partner for the production and sale of Coca-Cola-branded single-serve, pod-based cold beverages. The companies also will explore other opportunities to collaborate on the Keurig brand.
“With the Coca-Cola Co. as a global strategic partner in our multi-brand at-home Keurig Cold beverage system, we believe there is significant opportunity to premiumize and accelerate growth in the cold beverage category by empowering consumers with an innovative, convenient way to freshly prepare their favorite cold beverages at the push of a button,” Brian P. Kelley, president and CEO of GMCR, said. “This global relationship combines the Coca-Cola Company’s unparalleled brand, distribution and marketing strengths with GMCR’s innovative technology and beverage system expertise.”
The Keurig Cold single-serve beverage system currently is under development with expected availability in fiscal year 2015.