Retail CMOs Anticipate a Cheerful Holiday Season – BDO Survey

November 2016

Alana Gold
Bliss Integrated Communication                                
(212) 840-1661
Alana@BlissIntegrated.com           
                                                                                                                             
Chicago—Steadily climbing consumer confidence and retail sales growth have U.S. retailers feeling optimistic ahead of this holiday season. Respondents of BDO USA’s 11th annual Retail Compass Survey of CMOs predict a bullish 4.7 percent sales increase this holiday season, tied with the highest projection in the survey’s history. This is also more optimistic than the National Retail Federation’s expected 3.6 percent increase.
 
Holiday Season Total Store Sales Forecasts
2016 2015 2014 2013 2012 2011 2010 2009 2008
4.70% 4.20% 4.10% 3.80% 4.70% 2.90% 3.50% 2.50% 2.81%
 
Not only do retailers expect consumers to have greater flexibility in their spending for the 2016 holiday season, but nearly a quarter (23 percent) of CMOs themselves have increased marketing and advertising budgets this year.
 
“Conditions seem favorable heading into the holiday season this year,” said Natalie Kotlyar, National Leader of BDO’s Consumer Business practice. “But the pressure is on for retailers to identify the optimal mix of promotions and pricing across channels. It’s arguably the toughest decision retailers will make—and the most critical factor in their holiday season success.”
 
In fact, a majority (57 percent) of retail CMOs say price competition is their greatest challenge for the holidays, followed by brand recognition (18 percent), inventory management (15 percent) and lack of in-demand product (10 percent). The number of retailers anticipating more discounting over the prior year has steadily increased since 2013, reaching 72 percent this year. And one quarter of survey respondents, up from 16 percent last year, say they plan to offer more discounts and promotions during the 2016 holiday season than in 2015.
 
These findings are from the 11th edition of the BDO Retail Compass Survey of CMOs, which examined the opinions of 100 CMOs at leading retailers located throughout the country. The telephone survey was conducted in September and October of 2016.
 
Additional findings of the 2016 BDO Retail Compass Survey of CMOs include:
 
Omnichannel is a Must-Have This Holiday Season. Of the 64 percent of retailers familiar with omnichannel, one-third intend to adjust their marketing strategies in response to customer demands for cohesive shopping experiences across channels. Among the retail CMOs adapting their omnichannel approaches this holiday season, 91 percent plan to implement consistent pricing and 86 percent plan to use consistent promotional strategies across all channels.
 
‘Tis the Season for Social. An overwhelming majority of retailers (87 percent) will aim to make more meaningful one-to-one connections with consumers this holiday season by using social media in their marketing strategy. The most widely used tactic among those leveraging social media marketing will be advertising deals and discounts (91 percent), while two-thirds plan to partner with an influencer or brand ambassador to reach coveted customers via their most trusted sources. Just 18 percent of retailers say they will use social media for click-to-buy. 
 
Retailers Mix and Mingle on Mobile. Similar to last year, over half (58 percent) of retail CMOs plan to use mobile in this year’s marketing strategy. Unlike 2015, generic mobile coupons are out of style this holiday season, a promotional tactic cited by just 8 percent of companies, down from 34 percent last year. Instead, more retailers will focus their mobile efforts on targeted ads (32 percent) and social media apps like Instagram and Snapchat (29 percent).
 
Unemployment Remains the Grinch. Despite low jobless claims in recent months, unemployment remains chief among the economic factors retailers expect to impact holiday sales. On the other hand, fuel prices are at their lowest since 2009, according to the U.S. Energy Information Administration, and retailers are hoping this will work in their favor. Just 12 percent of retailers cited energy and fuel costs as a top concern this year, compared to 28 percent in 2015.
 
The BDO Retail Compass Survey of CMOs is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to chief marketing officers, using a telephone survey conducted within a scientifically-developed, pure random sample of the nation’s retailers.
 
About BDO USA
BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, advisory and consulting services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through more than 60 offices and over 500 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 1,408 offices in 154 countries.
 
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit: www.bdo.com.