BDO’s CMO Forecast: Tis The Season To Slash Prices
The bad news, the survey says, is lower expectations all around: CMOs expect, on average, a consumer spending gain of 3.1% on Black Friday, and an increase of just 3.7% on CyberMonday. (Last year, CMOs were predicting a gain of 4.3% on Cyber Monday.)
Ted Vaughan, partner with the retail & consumer products practice at BDO, tells Marketing Daily the survey results are further indication that the holiday calendar is essentially being rewritten, with consumers increasingly cavalier about retailers’ offerings, and stores more and more desperate to win sales.
“For the last several years, we’ve been asking the CMOs when they think these promotions will be phased out,” he says, “but I don’t think the discounting is going away any time soon. It’s become integrated into customer expectations.”
But regardless of when the offers come, consumers can expect to see plenty of slashed prices: 63% of the CMOs say they expect more sales this year. Some 47% say they intend to make most of their promotions in-store events, and 13% say they intend to do most price-cutting online (free shipping is still the favorite tactic.) And 39% are vowing to balance promotions across both channels. Extended hours are also an important trend, with three times as many stores staying open longer. And 20% of the CMOs say they are using social media to spread the word about sales and promotions, a 43% jump from last year.
Other projections, including one from the National Retail Federation, have shown that fewer shoppers intend to brave the crowds this holiday weekend, whether it’s Thanksgiving Day itself, Black Friday, or Cyber Monday. “Shoppers know something will always be on sale,” Vaughan says.
And it’s also likely to make so-called Super Saturday, the last Saturday before Christmas, even bigger. “Shoppers are smart enough to know that if they wait and stores have too much inventory, there will be bigger markdowns.”
Market researcher IBISWorld, meanwhile, is offering a somewhat gloomier forecast, predicting a 2.2% increase in sales in Thanksgiving Day weekend. While it expects sales on Cyber Monday to jump 13.1%, “this growth rate is deceptive, as it is mainly due to consumers’ continued shift away from physical store shopping and toward online deals.”