As consumer shopping preferences evolve based on the continued growth of mobile and online retail, retail executives must equip themselves with more than just traditional retail skills
NEW YORK--(BUSINESS WIRE)--According to the 8th annual CIT Retail Outlook (cit.com/retailoutlook), 80% of middle market retailers rate their overall financial condition as healthy or very healthy. Many are cautiously optimistic about the upcoming holiday season and the near-term future. Sixty percent expect an increase in total sales of more than 5% for the 2016 holiday season, compared to only 33% three years ago. The online study was conducted in August 2016 among 310 financial decision makers within the retail industry (259 middle market retailers and 51 large retailers) by Harris Poll on behalf of CIT Group Inc. (NYSE:CIT), a leading provider of commercial lending and leasing services.
“As consumer shopping preferences evolve based on the continued growth of mobile and online retail, retail executives must equip themselves with more than just traditional retail skills,” said Burt Feinberg, President of CIT Commercial & Industrial Finance. “To survive, they must now create an experience that excites consumers. This takes not just a keen sense of technology and analytics, but the ability to actively consume and act upon information about their customers’ needs, preferences and interests.”
Marc Heller, President of CIT Commercial Services, added, “Understanding how your customer expects to be spoken to, whether it’s via the web, a smartphone or something else, will likely continue to be a focus for retailers into 2017. Analytics, in addition to dynamic, integrated, data-driven websites, could be the key to making the transformation necessary to offer a more localized and customized shopping experience.”
Although sales are projected to increase over the next three years, progress is not expected across all sales channels. Middle market retailers are far more optimistic about sales generated from their online (75%) and mobile (65%) offerings compared to other channels. Their expectations for growth in revenue from in-store (45% compared to 50% in 2015) and catalog/phone (28% compared to 42% in 2015) channels have been scaled back significantly since last year.
While growth is expected across a variety of employee fronts in 2017, the biggest increase will be in the number of staff devoted to Internet/mobile sales channels. Fifty-four percent of middle market retailers expect to increase the number of staff devoted to Internet/mobile sales next year, down from 62% in 2015, while 52% say they will increase the number of hourly staff. The ubiquitous influence of the web has made having an online presence the #1 strategic investment for 2016. More than seven in ten (73%) of omni-channel middle market retailers say that the biggest investment priority will be their online presence, followed by social media (57%) and digital marketing (50%).
- Middle Market Retailers Predict a Successful Holiday Season: Three in five middle market retailers (60%) expect an increase in sales of 6% or more this holiday season versus last year. Nearly half (49%) expect an increase in online shopping to have the biggest incremental impact on holiday sales this year. Forty-seven percent expect an expansion of Black Friday promotions and 44% expect an increase in online or in-store discounts will have the most incremental impact.
- The Competitive Landscape Continues to Shift: Fifty-three percent of middle market and large retailers agree fast fashion retailers are taking consumers away from U.S. middle market retailers and pose a threat to other categories of goods. Seven in ten (71%) middle market and large retailers feel that it is likely that one or more prominent retailers will disappear in the next one to three years.
- Brick-and-Mortar Stores in a State of Flux: Almost three in five (56%) large and middle market retailers are using their stores differently than they have in the past, with over four in five of those with both a physical and online presence (83%) agreeing that their company is using their physical stores in a way that complements their digital channel. Eighty-one percent of middle market retailers agree that providing a unique shopping experience is an innovative way to attract new customers to brick-and-mortar.
- Web Presence Is Now the Price of Entry in Retail: Middle market retailers are less likely to say revenue is growing from stores (45% compared to 59% in 2015) than websites (75% compared to 71% in 2015). Expected growth from mobile is also high at 65%, while phone/catalog growth is low at 28%. Half (51%) cite updating and replacing technology as the key way to connect their channels.
- Mobile and Social Offer Competitive Advantages: Sixty-five percent of middle market retailers believe revenue is growing from mobile. The most common steps used to take advantage of mobile technology remain: creating mobile apps (51%), updating their website to meet consumer needs (50%) and increasing email campaigns (46%).
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This study was commissioned by CIT and conducted by Harris Poll from August 3–26, 2016 among 310 financial decision makers within the retail industry (259 middle market and 51 large). Qualified respondents were age 18 and up, employed full-time or self-employed, working in the retail industry with revenue between $5 million (middle market retailer: revenue between $5 million and 2.9 billion; larger retailer: revenue $3 billion or more) having one of the following titles: Owner, Board Member, C-suite executive (Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief Financial Officer (CFO), Chief Information Officer (CIO), Chief Investment Officer or other C-level executive) or Sr. Vice President/Vice President/Director, Head of Business Unit, Head of Department and working in one of the following functional roles: Finance, General Management, Operations and Production, Procurement, Strategy & Business Development, Supply Chain Management or Treasury.
The data for this research study were weighted to ensure that the data are balanced and accurately represent the firmographics of interest to CIT. Figures for industry, title, functional role, decision-maker role, revenue, company ownership structure and company location/region were weighted to bring them into line with the respondent profile from prior waves of the research.
About Harris Poll
Over the last five decades, Harris Poll has become a media staple. With comprehensive experience and precise technique in public opinion polling, along with a proven track record of uncovering consumers’ motivations and behaviors, Harris Poll has gained strong brand recognition around the world.
Founded in 1908, CIT (NYSE: CIT) is a financial holding company with more than $65 billion in assets. Its principal bank subsidiary, CIT Bank, N.A., (Member FDIC, Equal Housing Lender) has more than $30 billion of deposits and more than $40 billion of assets. It provides financing, leasing, and advisory services principally to middle-market companies across a wide variety of industries primarily in North America, and equipment financing and leasing solutions to the transportation sector. It also offers products and services to consumers through its Internet bank franchise and a network of retail branches in Southern California, operating as OneWest Bank, a division of CIT Bank, N.A. cit.com