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NRF exec: Mobile’s role will be “incredibly significant” this holiday season

October 4, 2013

The In-Store Mode home screen

Mobile's role in holiday shopping continues to grow

Mobile will play a bigger role in supporting retail sales this holiday season as well as in how merchants engage customers, helping to drive ecommerce sales gains of between 13 and 15 percent, according to the National Retail Federation’s forecast.

Overall, the NRF predicts retail sales to gain only 3.9 percent as the United States economy continues to try to rebuild following the Great Recession. However, online sales broadly, and mobile sales more specifically, will be a bright spot driven by growing consumer adoption and retail innovation.

“I think [mobile’s role] is going to be incredibly significant,” said Matthew Shay, president of NRF, Washington. “It is a significant component of overall online.

“It is clear from the buzz around the summit this week in Chicago, that this is an area where retailers continue to make significant investments,” he said. “They continue to build out their capabilities here.

“We’re going to see even more of it as we get into the holiday season and it is showing no signs of abating and in fact just continues to increase.”

Government shutdown
NRF expects sales in November and December to increase 3.9 percent compared to 2012’s actual 3.5 percent holiday season growth rate.

The forecast reflects the incremental gains the economy has made so far this year, such as positive growth in the U.S. housing market and more consumers buying larger-ticket items.

However, the government shutdown adds a level of uncertainty to the economy that could negatively impact holiday sales depending on how long it lasts.

The looming debt ceiling crisis could also potentially impact the economy and consumer confidence.

“At the moment, we think we can weather this if it gets resolved quickly, but obviously we are very concerned that if this drags on for an extended period of time, it is going to affect consumer confidence and it’s got implications for the entire rest of the holiday shopping season,” Mr. Shay said.

“We still think, with two-thirds of Americans saying it is not going to affect them, that consumers will come out and shop and spend,” he said.

Cost-conscious consumers
NRF’s digital division released its online holiday sales forecast earlier this week calling for growth of 13 of 15 percent over last holiday season. Last year, ecommerce sales increased 15.5 percent.

Part of what is driving the growth in online and mobile sales is that cost-conscious consumers are taking to the Web to do product research and to look for the best deals.

Consumers are also expected to use retail options such as buy online and pick-up in store, retailers’ apps and mobile Web sites to find gifts.

“[The ecommerce] number is obviously growing much more quickly and really being driven by consumers and the way in which they want to shop today and be engaged with retailers and by retailers who are getting increasingly creative about deploying social media and mobile tactics and a variety of other technological means to stay connected,” Mr. Shay said.

“We think that is going to continue to grow and expand – consumers love it,” he said “That’s the way consumers live their lives today.”

‘Tis the season
The holidays are a crucial time for retailers, accounting for anywhere between 20 and 40 percent of their total annual sales.

Therefore, many retailers are not going to take any chances on how confident consumers are feeling and will likely aggressively push promotions and special offers such as free shipping, much as they have done over the past few years.

Mobile is increasingly playing a bigger role in retailers’ promotional efforts as it enables them to deliver personalized offers to customers who are nearby to drive them into a store.

Retailers are also increasingly leveraging mobile once customers are inside a store to enhance the experience with a variety of shopping tools, offers and other content.

Mobile retail innovation also continues to be strong, with retailers leveraging mobile for enabling self-checkout and mobile payments, by leveraging augmented reality for unique experiences and to support how shoppers are engaging with social media, to name just a few examples.

“I think it is going to be highly promotional,” Mr. Shay said.

“You are going to see lots of technology applied to staying engaged,” he said. “You are going to see people opening maybe earlier, starting sales earlier.”

“There is a lot of innovation going on here and I suspect as we get closer to the season, we are going to see more of that and the ways that is all coming together.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York

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