You know it’s good news when CFOs, the gloomiest members of the C‑suite, start releasing positive projections. In the BDO USA, LLP survey, CFOs for top U.S. retailers signaled their confidence in the economy by predicting a 5.1% increase in revenue this year. These CFOs also gave some insight into which marketing strategies their companies will be using to compete in the e‑commerce sector.
While retailers are feeling optimistic about their results this year, they’re also concerned about employment numbers. 39% say that any significant increase in unemployment could negatively impact retail sales. The same holds true for personal credit. At least 18% of CFOs say that limited credit availability has the potential to drag down the retail sector.
CFOs see a strong future in e‑commerce. At least 40% of these businesses anticipate hiring additional employees and analysts believe these new workers will be supporting logistics and providing online customer service. The e‑commerce sector promises to be competitive though as smaller establishments go head-to-head with the industry giants. CFOs note that the following marketing strategies succeeded in the most recent retail season:
- Free shipping 28%
- Email and social promotions 24%
- Extended hours 40%
- Price matching 20%
The move into free shipping and price matching has implications for the bottom line, however. As retailers compete for online market share, reduced profitability will be a concern. If consumers are only focused on price, smaller retailers will not be able to compete successfully against larger competitors who can afford to take a loss on some items wile profiting on other items. The best long-term strategy will likely be to offer sole-sourced or unique items.
Do you agree? Or do you think that some consumers will stay true to their favorite retailers because of loyalty?