Will holiday retail sales fall short in 2023? Recommerce Solutions Can Help

For many people, the passing of Thanksgiving marks the “official” start of the holiday shopping season, but for many years the annual fourth quarter buying rush has been creeping in just a few weeks before Black Friday. In fact, according to one report Half of consumers started shopping even before Halloween..

Whether this creepy phenomenon is caused by retailers pushing sales earlier and more aggressively, or simply new memories of supply shortages and financial stress caused by COVID-19, the bottom line is that the holiday shopping season is forever growing. no see. continue, At least. Profits, on the other hand, can be a different story.

Will holiday sales be lighter in 2023?

Developments related to holiday spending are always a concern for numerous brands and retailers who rely on annual fourth-quarter surges to stay in the black, and these companies are eagerly watching third-party projections of their own.

By last August, industry organizations and media outlets began warning that consumer goods sales would be sluggish during the 2023 holiday season, with headlines like: ‘Ho-hum holiday’ spending expected as shoppers deal with economic backlash. and Americans plan to continue cutting back on spending throughout the holidays.

However, the National Retail Federation (NRF) released a piece titled:Holiday spending to reach record levels in 2023” And many media organizations are operating in this more positive direction.

But which one is it? In reality, each of these articles paints a more nuanced picture.

What to Expect in the Last Quarter of 2023

Sensational headlines predicting a disappointing or record year don’t tell the whole story. Annual spending is still increasing, but will likely slow significantly compared to recent seasons.

To set the stage, The New York Times went bankrupt. Some of NRF’s historical data. Holiday retail spending increased 5.3% in 2022 compared to the previous year. And 2021 vacation spending in the U.S. is a whopping 12.7% ahead of 2020.

However, the NRF projects only a 3 to 4 percent increase for the 2023 season over 2022, which would probably be the lowest increase in the past five years. This performance would place growth firmly back in line with pre-pandemic patterns, with average annual growth of just 3.6% over the decade preceding the pandemic.

As CNBC reports, logistics giants and major national retail chains appear to confirm NRF’s views. Delivery company CH Robinson said it was looking at possibilities. decline in consumer spendingwhile Target Leadership Speaks We’re seeing consumers spend less across the board, even on groceries.

Reuters emphasized While Walmart criticized the resumption of student loans, rising oil prices and rising interest rates, Deloitte warned: stagnant job market Seasonal sales may be negatively affected. The Federal Reserve Bank of San Francisco highlighted a significant decline in national pandemic savings, from $2.1 trillion in 2021 to $500 billion now.

The consequences of all this could be troubling for consumer goods companies.

Could slowing growth mean increasing surplus?

The slowdown in growth could be caused by a number of interacting factors, but regardless of what’s driving the retail slowdown this holiday season, problems may soon become apparent to retailers with the greatest losses.

Every product a business produces or orders in advance of the holidays incurs upfront costs. If retailers are found to have exceeded expectations, they may find themselves with unsold merchandise left in their warehouses taking up space instead of flying off the shelves.

But no matter how sales numbers change this season, the first few weeks of the first quarter will be anything but easy for U.S. retailers, with another major concern: the sheer number of returns they already expect to process in early 2024. .

The Intrinsic Challenges of Post-Holiday Returns

For consumer goods stores, the season doesn’t end with the Eighth Night of Hanukkah, a relaxing Christmas morning, or a quiet New Year’s Day. In fact, next week is when most of the actual work will take place. start.

These businesses will be busy accepting gift cards, handling customer service inquiries about newly owned products, and processing high volumes of returns and exchanges until at least February. NRF Report for the 2022 Season It shows that of the $960 billion in holiday spending, 17.9% of purchases by dollar value are returned or exchanged, resulting in a total loss of $171 billion in sales. These holiday return figures vary from source to source, although estimates and specific metrics vary from source to source. Typical return rate throughout the year—About 16.5% for both online and in-store purchases.

During the fourth quarter of 2022, companies did not hesitate to admit that they did not have the capacity to handle these returns and exchanges. Refund the buyer and allow them to keep the item This product cannot be processed and resold at a price lower than the retail price. There is no reason for a company to rush into unnecessarily cheap products, but this is not a sustainable strategy.

But what exactly can these stores do to clear space and restore merchandise value in a quick and cost-effective way?

Next-generation B2B recommerce solution

Even outside of the holiday season, major organizations around the world are flooded with returned and unsold merchandise. In reality, managing this excess inventory at scale is so time-consuming and resource-intensive that even the most successful companies can struggle to do it. When brands and retailers take traditional approaches to liquidation, they face barriers and delays at every turn.

That’s why more industry leaders than ever before are outsourcing these reselling efforts to specialized B2B recommerce platforms.

There are several reasons to partner with these third parties to build a powerful multi-channel recommerce strategy.

Recovery without slowdown

Wholesalers and brokers offer simple offers, and too often they are the first of many chains like them to take inventory value. This might be forgivable if it provided an easy, low-risk remedy for excess inventory, but this is not the case.

Liquidators represent a single point of failure in your efforts to keep your warehouse tidy and cash flowing. If your preferred partner closes, you’ll need to build relationships with other buyers, which can be time-consuming. You can use multiple liquidators, but managing a small number of relationships doubles your workload. This is especially true if you rely on phone calls, spreadsheets, and emails instead of purpose-built services and platforms.

Solutions like B-Stock centralize communication and handle both strategic and administrative obstacles to speed, such as sales marketing, answering buyer questions, dispute arbitration, etc., helping you get more people out of your warehouse in just a few days. .

Large and diverse buyer base

B-Stock has developed a global network of hundreds of thousands of buyers and is constantly working to attract additional relevant and reputable buyers. This means you will never have to look for a clearing partner again. Is it better? With so many eager buyers waiting, there’s a demand for almost everything you offer, regardless of quantity or condition.

With B-Stock, selling to a thousand buyers is no more difficult than selling to one.

Various sales methods

B-Stock offers a flexible suite of solutions and services that optimize recovery, inventory cycle time, resale predictability, or a combination of all based on business priorities.

Various solutions include:

• spot auctionA solution that maximizes recovery rates through competition on a flexible schedule and determines fair market prices in real time.
• contract auctionany You grant the high bidder a binding contract to purchase a specific item from you, locking in the price months in advance while ensuring unparalleled cycle predictability when purchasing in bulk.
• direct salesIt’s designed to get rid of one-off and unusual lots as quickly as possible by connecting sellers with hand-picked buyers or setting up ultra-exclusive “flash auctions”.

Our experts can help your business implement these models in a custom combination that best suits your specific goals.

The data and technology you need to make smart business decisions

For nearly 20 years, B-Stock has maintained detailed records of all sales activity that occurs on its platform, which is convenient for bookkeeping purposes, but there are real benefits to having access to this body of data. It’s in the analysis.

B-Stock’s proprietary analytics model uses 100,000+ auction data, 100+ unique variables, and two different machine learning models to accurately predict recovery rates for specific lots based on known variables such as category, condition, brand, and more. .

With expert advice from your account manager and powerful predictive analytics capabilities, making data-driven decisions has never been easier.

Are you ready to transform your recommerce?

This seems to be the only constant change over the past few years. Nonetheless, the best brands and retailers must be able to take it all in stride and move forward and succeed. The important part here is knowing when to ask for help so your business can focus on its main mission rather than being buried under a mountain of surplus products.

No matter what happens this holiday season, B-Stock can provide the demand, efficiency and insight you need to build a comprehensive recommerce strategy that will serve your organization for years to come.

To learn more about what B-Stock can do for you, Contact us today.