More Than Half of Retailers Had to Raise Prices for Holiday Season to Manage Tariff Costs, Says Adobe
Fifty-one percent of retailers had to raise prices this holiday season to manage the costs of the Section 301 tariffs on Chinese goods, said an Adobe report released Tuesday. Four in 10 retailers are concerned about staying “price relevant” through Christmas, said Adobe, releasing findings from a holiday retailer survey.
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Some 23 percent of retailers are worried about shipping to consumers on time; 20 percent are most concerned about competing on perks such as free shipping, said the analytics firm. Twenty-two percent are focused on converting online visits to sales.
Retailers will turn to experiences over the holiday season to stand out from the “noise,” said Gary Specter, Adobe global head-commercial business. Retailers need to find "fun, new ways to win consumer hearts and minds because in today’s experience-led age, that’s the only way to win wallets.”
To overcome concerns, exacerbated by a short retail season, 78 percent of retailers plan to bump up communication with customers and focus on experiences, said Specter, while 61 percent plan to send holiday-specific marketing emails, text messages and post on social media. Plans for experiential shopping include mock showrooms and augmented reality experiences, said the report.
On ways retailers will engage with consumers, company websites led the list at 82 percent, followed by email (73 percent), social (72 percent), display ads (50 percent), TV commercials (35 percent), mobile apps (32 percent) and YouTube (17 percent). Just over half (52 percent) are offering mobile payment options; 29 percent are using alternate payments through PayPal or bitcoin, it said.
The buy online, pick up in store (BOPIS) fulfillment option represents a significant portion of retailers’ sales, said the report, with 55 percent of retailers saying the pickup option gives them an advantage over e-commerce retailers. Retailers with annual revenue over $10 million had the biggest benefit from BOPIS, with 64 percent employing it vs. 42 percent of those $500,000-$10 million.
Most retailers were optimistic about 2019 holiday sales, with nearly two-thirds expecting 2019 to outperform 2018. Two-thirds have started deals to make up for the six fewer shopping days between Cyber Monday and Christmas vs. last year. Four in 10 retailers indicated concern about the condensed shopping period.
Just 7 percent of retailers have implemented shopping by voice, but 62 percent are looking at it as a sales tool for the future, said the report. Over half of companies using voice technology said they track customers’ use of voice and results. Some 31 percent of respondents didn’t see value in use voice as a sales tool.
Two-thirds of retailers said loyalty programs were a net benefit to business. Sixty-one percent of under-$10 million retailers said they benefited from Small Business Saturday. Some 62 percent said they weren't taking a political stance in ads. The survey of 403 retailers with annual revenue exceeding $500,000 was done Oct. 23-29.