It’s nearing the end of a chaotic year for the nation’s retailers as the slowest to go online fade to black while other “off-price” or value-focused retailers, along with international fast-fashion brands, continue to storm the American mall.
The big question for retailers: Can strong holiday sales ease their profit blues and get them into the black?
For shoppers, bargain hunters, and everyone else: How deep are the discounts, when do they start, and for how long?
Whichever side of the aisle you’re on, Black Friday and Cyber Monday are already happening this year. The mega-holiday event is in full swing for some brands — like you, Amazon — while a few more retailers plan to be closed on Thanksgiving in a rare moment of repose before the calendar’s biggest shopapalooza.
Some say it could be the best holiday shopping season since 2005, driven by a confluence of factors. Consumer spending rose in September by the most since August 2009.
Experiences will continue to be more prominent at the region’s shopping centers and 19 malls, just as surely as King of Prussia mall will keep expanding. Sales — both in-store and online — are expected to be up this year, while unemployment and gas prices should remain low. Even luxury goods are returning to shoppers’ lists, according to consumer surveys.
The National Retail Federation announced in October that it expects holiday retail sales in November and December — excluding cars, gasoline and restaurants — to rise 3.6 percent to 4 percent, reaching $678.75 billion to $682 billion, up from $655.8 billion last year. The forecast includes online and other non-store sales, which the federation expects to increase 11 percent to 15 percent, ending between $137.7 billion and $142.6 billion.
“Our [retail] clients anticipate a positive holiday peak season this year,” said Ben Conwell, national practice leader of e-commerce at Cushman and Wakefield, citing a 17-year high in consumer confidence, positive wage growth, and polling suggesting key demographic groups will spend more.
Conwell said his firm predicts that online sales will rise three times faster than retail overall.
“Black Friday and especially Cyber Monday will again see healthy increases over 2016’s record levels,” he said. “Retailers are launching holiday sales promotions — both online and in store — even earlier this year. Amazon, for instance, began Black Friday promotions 50 days ahead. Aggressive and early promotions are spreading the competitive discounting period over more weeks. Capturing a bigger share of consumers’ wallets earlier in the season — often when selection is best — can set retailers up for holiday success.”
Meanwhile, UPS, FedEx and the U.S. Postal Service are ramping up for another record season. The Postal Service foresees a double-digit spike in volumes; UPS and FedEx project slightly smaller increases.
The Postal Service is launching next-day Sunday delivery in select markets to compete with online godzilla Amazon and others, said Conwell.
While 2017 has seen thousands of store closings, including stores in the Macy’s and Sears chains, retailers are investing heavily in driving online customers to physical stores for pickup, which is faster than home delivery.
The holiday season demands hundreds of thousands of temporary workers. Traditional bumps in store employment have been dwarfed by supply chain jobs in warehouses and related facilities. Amazon will hire 120,000 seasonal workers, Target 100,000 and Macy’s 80,000. Walmart, the country’s largest retailer, is choosing to increase hours per associate in lieu of significant temporary hiring.
More shopping will be completed on mobile devices, according to the the 2017 holiday report by the commercial real estate firm CBRE Inc. Off-price players will keep winning with discounts, and additional warehouse spaces will be needed — in the form of temporary pop-ups — to fulfill a surge in online orders.
Real estate investment firm Jones Lang LaSalle (JLL) is predicting a 6 percent increase in spending this season after surveying more than 2,000 shoppers. But value is still important, and that’s why off-price retailers — such as T.J. Maxx, Marshalls, Ross, Burlington — are expected to lure in more customers, including Nana Enimil, 45, of Mercerville, N.J.
Enimil, who works in financial services, shopped across the river in Langhorne last week at the Marshalls on Lincoln Highway. He was heading to the checkout line close to 9:30 p.m. on a weeknight, carrying three long-sleeved men’s shirts.
“It depends on what I’m looking for,” he said of where he shops in person and online. “Places like this are known for value at a lesser price and for durability.”
More than 65 national retailers — topping last year’s five dozen — will remain closed on Thanksgiving this year, and reopen for Black Friday. Two brands — REI and Outdoor Research — will close on both Thanksgiving and Black Friday to give employees the days off to enjoy with their families.
Yet nearly 40 percent of consumers surveyed by JLL will shop at more than six stores throughout the holidays. And roughly two-thirds of shoppers indicated they will shop at superstores — such as Walmart and Best Buy — while 44 percent said they plan to make purchases online.
“We’re expecting to see strong crowds out again this year, with many people visiting King of Prussia on Black Friday not only for the incredible deals, but also for the experience and energy the day offers,” said Kathy Smith, the mall’s director of marketing.
This year King of Prussia welcomed 42 new retailers and restaurants. Many were coveted national and international brands and chef-driven restaurant concepts.
Smith said the mall’s ability to offer novel experiences year after year has made King of Prussia a top holiday destination. “We’re even introducing a Facebook Messenger Santa Bot that will help shoppers find the right store for the perfect gift based upon the recipient’s style and interests,” she said.
Also selling experience is Pennsylvania Real Estate Investment Trust (PREIT), which owns seven of the region’s 19 malls, including Cherry Hill, Plymouth Meeting, and Exton Square. Several PREIT malls opened the holiday season with the arrival of Santa over the Nov. 12-13 weekend.
An interactive display at Cherry Hill debuted on Nov. 11. It’s a replica of the 1983 film A Christmas Story, which allows children and adults to walk through Ralphie Parker’s family home.
Cherry Hill and Willow Grove have also launched large-format full- and still-motion digital LED displays to keep shoppers updated on hot products, the weather, time and the news. Plymouth Meeting Mall debuts them on Monday.
“We think customers will embrace the breaks our properties offer in terms of dining and entertainment experiences,” PREIT CEO Joseph Coradino said. “They can take photos with Santa and head into Legoland Discovery Center” at Plymouth Meeting Mall.
Shoppers can also check out the new 26,000-square-foot Zara store at Cherry Hill Mall, highlighting the rapid rise of this sector that churns out new fashions daily and sells at high volume and cheap prices. Primark of Ireland is similar; it operates stores at King of Prussia and Willow Grove Park Malls.
Online retailer Tommy John, which sells men’s underwear, opened its first store at King of Prussia Mall last month, underscoring the growing convergence between physical stores and the internet.
“It’s changed the way I used to go shopping for men’s underwear — which was usually a three pack of underwear or T-shirts, all in white, from a department store that had no display, no nothing,” said Tom McLaughlin, 58, a vice president of pharmaceutical sales who lives in Chester Springs, Chester County.
McLaughlin, a loyal online Tommy John shopper the last three years, made it to the new store two weeks ago and was impressed by offerings he could finally touch.
He saw T-shirts and socks that he wanted, but the store didn’t have his size in the socks. So he went home and ordered the items online. They were shipped to his home within three days, and when the box arrived, he handed it to his wife unopened.
“I told her to wrap it up and to give to me on Christmas,” he said.
Confirmed List of Stores Closed on Thanksgiving Day 2017:
Academy Sports + Outdoors
Babies R Us
BJ’s Wholesale Club
Blain’s Farm and Fleet
Crate and Barrel
DSW – Designer Shoe Warehouse
Half Price Books
JOANN Fabric and Craft Stores
Jos. A. Bank
La-Z-Boy (all corporately owned stores)
Mills Fleet Farm
Music & Arts
Office Depot and OfficeMax
Outdoor Research (closed Black Friday too)
P.C. Richard & Son
Pier 1 Imports
Raymour & Flanigan Furniture
REI (closed Black Friday too)
Sears Hometown Stores
Sierra Trading Post
Sprint (Corporate and dealer owned stores; mall kiosks may open)
Sur La Table
The Container Store
The Original Mattress Factory