1. Retailers will start 2012 strong. Retail sales will easily top the industry’s estimate of 2 percent to 3 percent growth for holiday 2011 as consumerstreat their loved ones and themselves. In fact, sales growth will likely be the strongest since 2006 and give retailers something to celebrate as 2012 kicks off.
2. But then comes the post-holiday spending freeze. Shoppers will pick through the after-holiday sales, and then put their wallets away for the rest of the year. Why? High unemployment, high debt loads, rising prices for food and most likely gasoline, as well as stagnant wages means most consumers will be tapped out and it will be time to start saving again. In short, don’t expect consumers to return to their pre-recession, free-spending levelsin 2012.
3. Credit cards make a comeback. Credit cards will reclaim their title as the most-used payment method from debit cards. This is a sign of both a healthier consumer and hungrier banks. Debit cards became a popular tool to curb spending, but next year, consumers will show their finances are steadier and pull out the plastic, especially if doing so earns rewards.
Banks will encourage this by making it more attractive to use credit cards and less attractive to use debit. Plus, more consumers will find they’re able to get credit again as banks re-evaluate and re-enter the subprime market.
4. Smart retailers will focus on developing better mobile shopping experiences for tablet users. Although the base of tablet users is small, a third of them use their device for shopping online and they tend to be a more affluent – and profitable — consumer. Retailers will develop apps that provide a lush shopping experience, combining clear pictures of merchandise as well as lots of product information and even editorial content, and the move will pay off as mobile shopping continues to grow at a brisk pace that dwarfs the adoption of the Internet as a shopping tool.
Now to my 2011 Predictions scoring:
Overall, I'd say four out of five ain’t bad, and give myself a B.
1. Holiday 2010 modestly outpaces estimates.
Correct, although "modest" may have understated it.
2. Teen retailer shakeout.
Wrong. Despite the challenges of dealing with fickle teens and fast-fashion rivals like H&M, teen retailers are hanging in there.
3. Private equity shops the retail sector.
Yep, BJ’s Wholesale, Timberland and skate and surf lifestyle brand Volcom were all acquired by private equity firms in 2011, and the trend should continue into 2012.
4. Focus remains on expanding online and international business.
Yes, but perhaps this was too easy. Uncertain times in the U.S. have forced retailers to look to online businesses and international footprints (which in some cases was accomplished using an online business).
5. Shhhh. This product has less...sugar, salt or other ingredient.
Yes, not only are packaged food companies going easy on the salt without letting you know, more and more restaurants are doing the same thing.