In the first few years following the Great Recession, the retail sector was hit by a constant stream of adversities, with consumers in the United States spending very little on non-essential items compared to the early 2000s. Since ~2012, though, the American economy has shown new signs of life, with minimum wage increases, gas prices dropping to 10-year-lows nationally, and customers using their new-found disposable income on items they may really want, but don’t necessarily need.
Although 2016 is just getting underway, several reports have shown that the retail sector should still be moving in the right direction with respect to revenues and profit margins, so long as businesses therein are navigating the modern landscape properly. This would include the deployment of solutions that help to securely process all forms of transactions, including credit, debit, gift/loyalty, mobile and near-field communication technologies.
A look at January
Notably, January is often one of the slower months for the retail sector, as consumers tend to stay away from Malls and main street after spending so much toward the end of the previous year thanks to the holiday shopping season. However, Reuters recently reported that the U.S. Commerce Department released its report for consumer spending in January, and found that revenues actually expanded by 0.6 percent last month compared to December.
It is worth pointing out that the Commerce Department did discover a slight contraction in December 2015, and that consumer spending actually ended up falling flat toward the end of the year, Reuters explained. Still, the fact that retail revenues rose in January – regardless of what might have transpired toward the end of 2015 – bodes well for the economy looking forward.
According to the news provider, the stock market was looking somewhat worrisome at the end of last year, with many traders believing that another recession was on the horizon, but these fears have proven to be misguided.
The National Retail Federation recently forecast retail spending to expand by 4.5 percent through the first six months of the year compared to the revenues seen between January and June of 2015.
“Retailers are carefully managing their inventories but still need to stock up on seasonal goods for spring and summer,” argued NRF Vice President for Supply Chain and Customs Policy Jonathan Gold. “Comparisons with last year are difficult because of the surge of cargo after problems at West Coast ports ended, but we think consumers will continue to increase their spending this year and retailers will be ready.”
Regardless of what types of gains or losses might be seen in the broad scope of the American economy this year, retailers should be doing everything in their power to maximize their chances of enjoying higher revenues. With the right management solutions, payment processing technology, marketing strategies and beyond, 2016 can be a highly advantageous year for retailers of all sizes.