Most retailers say they are emerging from the recession better positioned for strong and sustainable revenue growth, with many planning to increase spending on Internet and mobile channels over the next 12 months, according to a survey from Forbes Insights. In addition, most retailers are planning to advertise more aggressively during the 2010 holiday shopping season.
Retailers have had to work smarter and more efficiently to stay afloat throughout the recession. During the downturn, most mid-market retailers—those with revenues from $25 million to $1 billion—experienced significant revenue contraction. The result is an industry with leaner inventories and lower operating costs.
Now poised to grow, the industry is cautiously optimistic: 68% of mid-market retailers expect their revenues to grow (46%) or grow significantly (22%) in the next 12 months. That projected growth, however, is in the wake of steep revenue declines in 2008 and 2009.
Advertising Set to Increase during the 2010 Holiday Season
For the coming holidays, retailers are planning for growth—but they're not taking chances:
- 69% are planning to advertise more aggressively during the 2010 holiday shopping season than they did in 2009.
- 72% expect to run more promotional specials during the season, while 60% expect to run more clearance sales.
Still, there are signs of confidence among retailers: 68% plan to hire more seasonal staff than they did in the previous year.
Below, other findings from the US Small Business and Middle Market Outlook 2010, based on a survey of 111 mid-market retail executives.
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Spending on Internet, Mobile Channels
Asked about their capital spending plans over the next 12 months, retailers cite tech-focused initiatives in three out of the four top spots, setting the following priorities:
- Expanding Internet channels: 47%
- Maintaining existing stores: 37%
- Funding point-of-sale initiatives: 30%
- Developing mobile initiatives:27%
- Funding IT initiatives:25%
- Opening new stores: 25%
Regarding digital strategies, 83% of retailers expect investments in their website architectures to either increase (50%) or significantly increase (33%) over the next 12 months. Meanwhile, 69% of retailers are planning to increase spending on mobile applications development and 67% are increasing spending on mobile websites.
About the data: Findings are from the Forbes Insights August 2010 survey of 111 retail executives at businesses with annual revenues of $25 million to $1 billion.
