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Holiday sales to grow as much as 4%

BY Mike Troy

NEW YORK — Deloitte is forecasting holiday sales will increase between 3.5% and 4% as the economy’s health and the presidential election take center stage among consumers this fall.

Despite some distractions this year, retailers should expect a modest increase in 2012 holiday sales, according to Deloitte’s annual holiday forecast release Tuesday morning.

"Economic headwinds nagging consumers this fall include stubbornly high gasoline prices that continue to creep up and soft housing and job markets," said Carl Steidtmann, Deloitte’s chief economist. "While consumers turned out in the summer to give retailers solid gains for a few months, that pace may be difficult to sustain through the end of the year. Consumers and businesses alike may pause in advance of the election; however, retailers may benefit from a post-election consumer spending boost."

Deloitte’s retail and distribution practice expects total holiday sales to climb to between $920 and $925 billion, representing a 3.5% to 4% increase in November through January holiday sales when compared to last year. While that is a respectable increase, it is below last year’s growth rate of 5.9%.

Additionally, Deloitte forecasts a 15% to 17% increase in nonstore sales, which is primarily attributable to ecommerce. Nearly three-quarters of nonstore sales result from the online channel with additional sales coming from catalogs and interactive TV. 

"Nonstore sales continue to outpace overall growth, but increasingly influence consumers’ experience with the retail store, from trip planning, to in-store product research, and post-purchase reviews and sharing," said Alison Paul, vice chairman, Deloitte LLP and retail & distribution sector leader. "This holiday season, retailers’ most lucrative customers may be the ones they engage across physical and virtual storefronts."

Paul noted that consumers also might consolidate or reduce trips to the store in response to higher gas prices. Conversely, she added, consumers are expected to keep a sharp eye on promotions and pricing, making retailers’ digital connections with consumers before and during each shopping trip even more critical this year. "This year, we anticipate retailers will come to the starting gate with true omni-channel pricing strategies, as opposed to disparate or reactionary strategies of the past," Paul said. "Consumers should see more price transparency across mobile, online and store channels, and retailers will use these same channels to gain insights into their core customers’ behavior. Retailers that interpret and respond to real-time information about shoppers can hit the right notes on pricing and promotions that drive traffic without eroding margins."

Deloitte forecasts that mobile-influenced retail store sales will account for 5.1%, or $36 billion, in retail store sales this year as consumers increase store-related smartphone activity such as product research, price comparison or mobile application use. 

"Retailers that welcome the smartphone shopper in their stores with mobile applications and wi-fi access, rather than fear the showrooming effect, can be better positioned to accelerate their in-store sales this holiday season," Paul said.

The firm’s recent research shows shoppers armed with smartphones are 14% more likely to make a purchase in the store than those who do not use a smartphone as part of their in-store journey.

"The mobile channel is a powerful customer engagement tool, enabling retailers to capture a shopper’s attention at the point-of-purchase, while gleaning valuable information about shopper behavior regardless of the shopper’s location," Paul said.

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McCormick adds Lilly exec to board

BY DSN STAFF

SPARKS, Md. — Global flavorings leader McCormick named Eli Lilly executive Jacques Tapiero to its board.

Tapiero has served as SVP and president of emerging markets for Lilly since 2009 and brings more than 25 years of international business experience to the $3.5 billion spice company. Tapiero currently leads Lilly’s business strategy in many of the world’s fastest-growing markets, such as China, Russia, Brazil, Mexico, South Korea and Turkey. He is a member of Lilly’s executive committee.

Previously, Tapiero served as president of the intercontinental region for Lilly, which comprised offices in Asia, Australia, African and Middle East countries, Canada, Latin America and Russia. Prior to this role, Mr. Tapiero has served as president and general manager for both Lilly France and Lilly Brazil, as well as managing director of Lilly Sweden. He has held several sales and finance positions in Indianapolis, France, Sweden and Switzerland since joining Lilly in 1983.

"We are extremely pleased to have Mr. Tapiero join our board. His broad business experience and extensive global background will bring our board meaningful insight and expertise as we continue the global growth of our business," McCormick chairman, president and CEO Alan Wilson said.

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New solutions for health system in crisis

BY Jim Frederick

The nation’s health system is critically short of front-line doctors and in dire need of new solutions. Walgreens is ready to step into that breach.

“The public is demanding that someone fill that role,” said Jeff Kang, M.D., SVP health and wellness services and solutions.

“With more than 27,000 pharmacists, we want to move away from just filling prescriptions  Our community pharmacists are a precious resource and can be part of the solution,” he said.

Kang joined Walgreens last fall after serving as chief medical officer at Cigna. He is board-certified 
in internal medicine and geriatrics, and also was chief clinical officer at the Health Care Financing Administration (now the Centers for Medicare and Medicaid Services) from 1998 to 2002.

As Walgreens expands the repertoire of disease management, chronic care and preventive health services its pharmacists and Take Care Clinic nurse practitioners can provide — and transforms its stores into “destinations for health and daily living” — the chain already is well along in its evolution from traditional drug store to something very different, Kang said. The company has become a source of health services and solutions for payers, providers and patients in desperate need of more convenient and cost-effective access to care.

“Five or 10 years ago, our purpose was to fill prescriptions as fast and conveniently as possible,” Kang pointed out. “From an organization standpoint, we’re now very clear about our purpose, and it’s fundamentally to help our customers get, stay and live well." Walgreens, he added, is working “to position our clinicians and pharmacists as an extension of the physician’s office. “We’re not seeking to substitute for the physician. The reality, though, is that in this current market, … they’re overwhelmed. Our nurse practitioners and pharmacists can complement that physician care.”

How? By “investing in consumers’ health and wellness” by “helping them live and stay well with prevention, screenings and behavioral risk-factor modification,” he said.

“About two-thirds of the diseases in the United States are driven by four behaviors: lack of exercise, diet, smoking and stress. So if you deal with those four risk factors, you could create a lot of health savings.”

Walgreens, Kang said, can play a role in helping Americans reduce those risk factors.

The accelerating adoption of health information technology and electronic patient health records, he noted, also is putting that collaborative care model within reach.

Call it the commercial version of health reform. Walgreens is doing its part to force the healthcare system to break with the past and abandon a century-old model. “Everyone is guilty of designing processes in a provider-centric fashion. So we’ve developed a clinician-centric system at the convenience of the clinician,” Kang said. For instance, he said, “you go to a doctor’s office, and it’s all built around the doctor’s schedule and the workflow.”

Walgreens, he said, is pushing to replace that model with one that puts the patient at the center of the picture. The future network of care providers — including physician practices, clinics, health plans, and pharmacy and wellness retailers like Walgreens — should be built around the patient and should adapt to his or her needs with services that are more convenient and accessible. And if it follows the concept of medical homes advanced by the health-reform law passed in 2010, Kang added, “the home should be where the patient is.”

“The technology is there now, and what it’s going to take to change that is for consumers to demand a system that’s patient-centric,” he asserted. “What the consumer wants is an integrated system that’s coordinated on his or her behalf, and convenient to him or her.”

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