“Retail Unwrapped” Podcast Provides Holiday 2024 Outlook

In its weekly “Retail Unwrapped” podcast, host Shelley Cohen from The Robin Report, spent time with Tom McGee, president and CEO of ICSC, to talk current retail trends and the upcoming holiday shopping season.

Episode 210: Retail Store Transformation and Holiday 2024

ICSC is the member organization for the advancement of the Marketplaces Industry.  The Marketplaces Industry is made up of the places and spaces where people shop, dine, work, play and gather and is foundational and vital to communities and economies.

Shelley started the podcast by asking Tom to discuss the organization’s recent holiday shopping survey. Tom said he expects a very solid holiday season: “Our forecast is for three to three and a half percent growth in retail sales, food and beverage better than that, 6%, $1.7 trillion spent over the holiday season.”

According to the ICSC’s research, 92 percent of consumers plan to make in-store purchases this holiday season, which shows that physical retail is maintaining its attraction.

This is encouraging when considering that Inflation remains a factor and ICSC’s survey reports that 90% of consumers say that the higher prices will impact their purchasing. Tom stated that “the consumer has continued to be really resilient throughout the last number of years in this post-pandemic period of time, continued to shop, continued to spend.” As long as employment stays strong, he is optimistic about the holiday season.

The discussion also touched on expectations on promotional activity this year. Tom mentions that retailers have improved stock optimization so it is hard to say if there will be more or less promotional activity. “One, I think retailers have become much more disciplined around inventory management,” said Tom. “That is one of the outputs of the pandemic, I think, really managing supply chains and inventory very effectively.”

The holiday shopping season has also become longer, with many consumers starting in October nowadays. So, while promotions are always important to shoppers during the holidays, Tom thinks “that when they see promotions or they see a product priced at something that they think is fair, they’re going to jump on it.”

Shelley then turned the conversation to the weather, a key external variable affecting consumer activity and retail performance. She said to Tom that the weather is expected “to cooperate a little better with us in terms of cold weather this year than it did last year, according to Planalytics. The weather impact outlook from Planalytics Shelley continued is projecting “a lift in seasonal categories such as blankets, heater, firewood, thermal boots, fleets, hats, apparel.”

Of course, cooler temperatures will help a lot of seasonally-focused retailers like department stores and clothing stores, but inclement weather can hurt store traffic.

Tom felt that “we’ll see what the weather holds and how severe it is and how that could impact shopping behavior. Obviously, if we have very, very severe weather that impacts people’s ability to navigate to shopping centers and go out and shop, that’s going to have a negative impact on the season.”

Shelley then asked about the overall health of physical retail.  According to Tom “there is this narrative out there that it’s either or either e-commerce or either stores… the reality is this terminology of omni channel… has really become concrete and tangible in this post-pandemic world.”

Tom continued, “retailers become increasingly agnostic in regards to where a transaction happens although they prefer that that transaction happen within a store, because obviously that saves shipping costs and so forth, it gives you an opportunity to interact with their customer. But we’ve done a number of studies, our halo reports that indicate that as retailers open up a store, that drives not only the sales in that store, but drives e-commerce sales in that region as well.”

In fact the store now serves many purposes.  “It’s really become a mini fulfillment center in addition to traditional shopping, curbside pickup, click and collect, ship from store,” said Tom. “It’s a really convenient way to deal with that last mile. And so yeah, the store is alive and well.”

The podcast goes on to cover trends in retail space and the new square footage that is being added. Tom felt the “the narrative around the retail apocalypse” does not match the reality where “on a macro level, you have demand for space from retailers in excess of the of space (available), particularly in that suburban retail market.”

Listen to the entire podcast by clicking here.