The retail industry received good news from the U.S. Census Bureau recently: year-to-date-retail sales through September 2018, excluding gas and auto sales, were up 4.1% from 2017. Rising sales are due to a number of factors, including consumer confidence, a strong economy, tax reform, and retailers finding success through omnichannel strategies that provide the best customer experience both online and in-store.

Growing e-commerce sales

E-commerce, in no doubt supported by sales through social channels, continued to increase in the second quarter of 2018, which totaled $127.3 billion, up 15.2% over the prior year. Many retailers cite e-commerce as the main driving growth factor of the sector. When determining e-commerce sales data, retailers are including not only standard online purchases, but also online purchases that are picked up in a store. Many apparel retailers will even include online orders placed by a sales associate in a store for a customer who could not find the size or style they wanted.

Brick and mortar continues to play important role

While e-commerce is getting the spotlight, some retail sectors actually opened new brick and mortar stores in 2018. Brick and mortar stores help with e-commerce sales in that they provide additional avenues and channels for consumers to engage with a retailer; examples include: in-store returns and pick up; impulse purchases; and the ability to order additional or different items. The Great American Group reports that sectors opening new stores include discount dollar stores and off-price retailers like TJX. For major apparel brands, while department stores continue to close, outlet concepts crop up in their place, keeping brick and mortar alive and well. Even online giants like Amazon understand the importance of brick and mortar with their acquisition of Whole Foods and the opening of thousands of Amazon Go stores.

Online + B&M = strong holiday sales

Many reports and surveys are forecasting strong holiday sales this year. Deloitte’s 2018 annual retail holiday sales forecast show holiday sales are expected to increase between 5.0% and 5.6% over 2017. In addition, the National Retail Federation expects 2018 retail sales to continue to increase at a minimum of 4.5% over 2017. Per industry experts, retail sales will continue to benefit from tax reform and other positive economic factors.

Be ready for returns

Given 2018 Black Friday and Cyber Monday sales were record breakers, retailers can expect increased levels of returns coming back. The NRF reports that 11-13% of holiday purchases will be returned; representing around $90B in merchandise. The uptick in returns is reflected in B-Stock’s data: we see higher volumes of inventory listed following the holidays; the majority of it being returned merchandise. Historically, we see 60% more items listed in Q1 (January-March) versus Q4 (October-December). The most common returned items that end up on our marketplaces post holiday include: women’s trendy apparel, speciality kitchen items, tools, seasonal items, and toys.

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