With the US economy finally shaking off the effects of the Great Recession, retailers, manufacturers and industry leaders are hoping today’s Black Friday sales will mark the beginning of the first blockbuster holiday shopping season since the mid-2000s.
All signs are positive so far, according to the National Retail Federation. Holiday sales have grown by an average of 2.9% over the past decade. This year, sales between today and Christmas Eve are expected to account for 19.2% of the retail sector’s $3.2 trillion in annual sales during 2014.
The group predicts a 4.1% growth in sales this holiday season, marking the first time holiday sales have increased more than 4% since 2011.
Manufacturing Expands 20 Consecutive Months
The NRF’s prediction comes on the heels of more positive news from the MAPI Foundation Business Outlook, which said that the manufacturing sector has experienced 20 consecutive quarters of expansion, although the latest statistics from October showed a slight decrease in the composite index, from 71 to 67.
“Month to month, we’re still going to see stop and go activity,” said Donald Norman, MAPI’s director of economic studies and survey coordinator. “It’s just not all that smooth, and that’s been a characteristic for a while. But the results still point to continued new growth, albeit at a modest rate.”
Black Friday has become the most important shopping day of the year for retailers, both in stores and online. In 2012, more than 44% of the US population shopped either online or in person on Black Friday or on Cyber Monday, the Monday after Thanksgiving. Online retailers set an all-time record with more than $1 billion in sales on Black Friday and $1,465 billion on Cyber Monday.
“Be Prepared”
Companies that have taken steps to prepare for the sharp spike in sales could be rewarded handsomely, especially if they streamlined warehouse operations and automated processes as much as possible.
“An efficient flow of goods is of utmost importance to your business, covering everything from timely replenishment of stock to the correct delivery of products to your customers,” wrote Davd Lodwig, manager of W&H Systems, in his retail blog. “Correct data, quality and accurate tracking and tracing are indispensable for your operation. There is no doubt that automation increases accuracy and speed of material handling. This, in turn, leads to increased space utilization and reduced product damage.”
One of the best ways to prepare for Black Friday and Cyber Monday is to make sure your warehouse is organized as efficiently as possible. This includes the use of storage systems, racking and pallet systems, and optimizing the amount of space necessary to a heavier than normal amount of inventory.
Storage spaces that are organized can cut down on labor costs and reduce delivery times, leading to increased customer satisfaction.
Not Being Ready Can Be Disastrous
The cost of not being prepared for Black Friday and Cyber Monday can be high. Just ask Wal-Mart.
In 2011, online shoppers logged in to the discount chain’s website to take advantage of Black Friday “door buster” sales overwhelmed the company’s web servers, causing broken checkout pages, emptied shopping carts and login errors. Things weren’t much better at Wal-Mart’s actual stores, where mismanagement of door buster crowds resulted in violence at several locations.