It's hard enough to get a good read on how the consumer is feeling today, so how are retailers expected to know what they'll be thinking this Christmas?
As tall as this order is, it's precisely the guessing game retailers are forced to play as they place—or in many cases, have already placed—their holiday orders.
As a result of the months-long time lag between putting in orders and seeing the items on shelves, merchandising teams are parsing through a mix of contradictory data to make predictions. They are weighing spurred job growth and an improving housing story, juxtaposed against a bevy of earnings misses from retailers, who were hurt by bad weather and a resistant consumer.
"I think that what we're seeing early would be that there's slight optimism for the holiday season, and the order levels are reflecting that," said Steve Barr, PwC's U.S. retail and consumer practice leader. "[But] it's a very long way away and a lot can happen between now and then."
In 2013, retailers entered the holiday ordering season with a renewed sense of confidence, according to Craig Johnson, president of Customer Growth Partners. But as the year progressed, they experienced a series of downward steps in demand, including the Fourth of July and Labor Day holidays. This left many stores with excess inventory and contributed to what some considered the most promotional holiday on record.
The challenge in getting the right assortment in the proper quantities is an even bigger challenge for bricks-and-mortar stores, which risk losing a sale entirely if a certain item isn't in stock in the right color or size, Barr said.
"That makes it very challenging for the store-based retailers," he said.