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Which Retail Strategies Led to Holiday Season Wins?
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Evidence of the rapidly shifting retail landscape was never more evident than in 2017. Yet, amidst the chaos of store closings and the increasing pervasion of online shopping, a number of interesting positive trends emerged last year.
Many retailers struggled to adjust to changes, but among those who appeared to find traction were Target, Kohl’s Corp., Macy’s Inc. and J.C. Penney Co. In fact, their strategies for the holiday period paid off.
In the case of Target, the Minneapolis-based retailer successfully leveraged both physical stores and online sales. Its strategy involved using retail space to fulfill 70% of digital orders via in-store pickup, or shipping from stores to customers. Target’s same-store sales rose 3.4% in November and December, which was a pleasant turnaround from last year when supply chain and online competition mismatches hurt the retailer.
Target counted on a network of 1,800 stores to serve as fulfillment centers. In the coming year, the company is expected to scale up use of the Shipt same-day delivery service it acquired.
Even some department stores fared better than expected over the holiday season. Kohl’s reported holiday sales increased 6.9%, compared with a 2.1% decline a year earlier. Macy’s reported same-store sales rose 1% in November and December from a year ago, and even J.C. Penney’s sales increased 3.4%.
Macy’s Jeff Gennette told the Wall Street Journal that “It was the first November-December increase for us since 2014,” and the retailer is seeing that momentum continue into 2018.
The sector’s improving numbers likely received a boost from the economy. And growth is expected to continue in 2018, as a result of high consumer confidence, low unemployment and new tax legislation.
Other chains such as Sears Holdings Corp. did not fare as well. It plans to close more than 100 stores this spring.
For comments, questions or concerns, please contact Dennis Kaiser
