Retail Sales Soar As Consumers Continue To Swipe-In The Holiday Season

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Overall, while global advisory firm Deloitte expects two-thirds of consumers to begin their holiday shopping journeys at on-line retailers, with few or no physical locations, including auction sites, the in-store experience “still plays a major role,” as many shoppers “still prefer to interact with products in person.”

However, they noted that over half of shoppers plan on doing in-store research and buying on-line. “This consumer journey of mixing online and in-store for research, pricing and comparisons is now commonplace,” Deloitte added.

Market participants widely anticipate same-store cannibalism of product sales, as omnichannel options typically pit mobile swiping or desktop clicking against in-store purchasing.

Easy to Chew, But Hard to Swallow

The potential cannibalization of physical store sales due to e- and m-commerce signals that shoppers seem to prefer not only the convenience of the digital check-out and delivery processes but also have been experiencing the ineffectiveness of the entertainment value in in-store shopping.

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Indeed, current brick-and-mortar stores largely resemble giant warehouses, with employed staff mainly serving the mechanical functions of product retrieval and sales ringing. In fact, many stores seem to be stocking ever-lower levels of inventory, perhaps in anticipation of lower foot traffic for their goods, while offering instead to order items on-line for their customers.   

Some anecdotal evidence suggests that it is not unusual to find abandoned registers and skeletal staff with less-than-ideal product expertise roaming the floors among larger retailers such as Macy’s (NYSE: M).

In fact, the general lack of in-store enthusiasm may be having an adverse impact on the Macy’s brand in general, as its third quarter of 2019 comparable sales fell 3.9% from the prior year, with adjusted earnings of US$0.07 per share down from US$0.27 over the same period.

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DISCLOSURE: AUTHOR SECURITY HOLDING: NO POSITIONS

The author does not hold any positions in the financial instruments referenced in the materials provided.

The analysis in this material is ...

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