Retail Ecosystem Forecast for 2014

I’m no economist. However, I am a keen observer of the retail ecosystem in which many of our clients participate. The summary of 2014 from my perspective is that it will be similar to 2013 in terms of overall sales growth. Notably though, online and mobile sales will continue to grow significantly as a percentage of total sales.

Retail sales increased 3.7% in 2013 according to the National Retail Federation. Their prediction for 2014 is a slightly higher increase of 4.1%. However digital sales, through online and mobile purchases, are predicted to grow by 9.3%.

Retailer earnings reports for the 2013 holiday season and their predictions for the first quarter of 2014 have been muted. This is pretty much a repeat of what we heard at this time last year. The mood of retailers is cautiously optimistic.

What This Means to Your Small Business

As retailers continue to focus on increasing their ecommerce channel, some will increase their breadth of online product offerings and do more test marketing. Products which consumers are less inclined to want to experience in-person before buying have a better shot at becoming new test market products on the ecommerce sites of retailers.

You may want to point out to your buyers any prior online sales success of your products. You may also find opportunities for developing joint online promotion plans with them.

Drop shipping direct to consumers will continue to increase for many suppliers as online orders continue to grow as a percentage of overall sales. Check out my previous posts on this topic.

Because retailers are cautiously optimist, they will be closely managing their inventory in the year ahead. As a result, there is a good chance that you will have more EDI orders but with lower quantities per order. Be prepared for more flexibility in delivery schedules.

At the end of year most suppliers will have benefited from another year of modest growth. And that is better than another Great Recession!

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