Guide to Holiday Profits 2006

by Nancy Tanker, Micheal Brother, Andrea Waltz and Richard Fenton

Introduction and Statistics

Whether you're a first-time specialty retailer with one kiosk, or a seasoned retailer with dozens of stores, our goal is to give you the information you need to plan an effective strategy for the season. Information you'll need to establish realistic sales benchmarks, adapt to changing conditions as the season progresses and outperform the competition. To have the best season ever, you have to plan ahead. And then, as the saying goes, work the plan.

To that end, in this year's Guide you'll find key holiday statistics and buying pattern information, including details on selling techniques that really work, tips to boost early sales, holiday staffing advice, theft-prevention information, and even a few stress-reduction techniques you might want to use. Information that will make holiday business more efficient and your retail life more enjoyable.

Seasonal Stats

The 2004 and 2005 holiday seasons were retailers' strongest in five years, according to the National Retail Federation. Although dollar sales have steadily grown over the last decade, (see graph below) take a look at the growth rate for 2000 to 2002 in the Holiday Retail Sales Growth chart (see graph below) and you'll see that year-over-year growth above five percent is by no means assured. The NRF publishes its growth forecast for the 2006 holidays in late September, and the ICSC will release its forecast in late October.

Ten Times Bigger

The holiday season, (Nov. plus Dec.), is nearly 10 times bigger than any other buying season. Despite the continuing rise of gas and energy prices, and insecurity caused by world events, retail sentiment remained strong over the summer and into the fall. Experts agree that Internet spending will once again see double-digit growth, prompting some brick-and-mortar retailers to offer steep discounts early in the season.

Payment Methods

Last year marked yet another decline in consumers' credit card use during the holiday season, with more shoppers opting to pay by debit/check card or cash. Checks were a distant fourth. But credit cards still make up nearly a third of purchases across the board. (Note: Starting next year, new federal regulations might affect how you process checks. Look for our article on that and other important payment-processing topics in SRR's Winter/January issue).