Page 30 - GS190902

CoverStory

The biggest burst of online spending came on Cyber
Monday, with a reported $7.87 billion in sales, followed
by Black Friday, when ecommerce sales totaled $6.22 bil-
Brick and mortar as bread and butter lion, eMarketer said. This year, eMarketer expects holiday
spending across all channels to grow 3.7 percent to reach
While it's easy to look at data detailing double-digit growth in $1.035 trillion.
ecommerce sales and retailer store closings and think brick-and-
mortar stores are going the way of dinosaurs, Mark Matthews, vice "We really have a big push on, getting [merchants] to do
ecommerce," said Demke-Calixte. Even if they're only sell-
president for research development and analysis at the NRF, said this ing a few items online, they need an online presence, she
is far from the case. added.

He pointed to a report by IHL Group revealing that retailers are Helping merchants grow sales
opening more stores than they are closing, and that ecommerce ISOs and merchant level salespeople are well positioned
represents just 19 percent of all retail sales. to help merchants grow both online and offline sales. Pro-
viding access to working capital is one example. Darren
A total of 1,065 retail chains opened new stores in the first six months Schulman, president of 6th Avenue Capital, which offers
of 2019, representing a 56 percent increase over 2018, IHL reported. merchant cash advances (MCAs) and other funding solu-
Just 206 chains closed stores, a 66 percent drop from 2018. tions to small businesses, said his firm receives numer-
ous inquiries from retailers between September and De-
cember, as they staff up, buy more inventory and dress up
Total retail sales were up 3.1 percent for the first six months of this stores.
year, according to IHL, to total $82.7 billion. The biggest gainers so
far this year have been restaurants (up 4.2 percent) and drug stores "Merchants are doing a lot of things to increase sales [this
(4.2 percent). time of year], and sometimes they need money to do that,"
Schulman said. In addition to general retailers, restau-
"The retail landscape 10 years from now will likely be one where rants and salons often need additional working capital to
stores still play a vital role in the shopping experience," Matthews prepare for the holidays, he stated.
said. "A good merchant cash advance company will examine
seasonality [at a prospect's business] by looking at prior
year sales," Schulman said. "People should always learn
from past experiences."
Six in 10 shoppers recently surveyed by Coresight Re-
search said they're concerned tariffs on goods from China MCAs offer many benefits when compared to traditional
will cause spikes in holiday gift prices this year. Yet Co- bank loans. There are no credit check or collateral require-
resight found most aren't planning to boost holiday shop- ments, for example, but Schulman added these are not
ping budgets to account for these price hikes. open spigots of cash. MCAs also are less time consuming
than traditional bank loans, with some companies making
Retailers also face a shorter shopping season this year, as funds available to merchants in as little as 24 hours. Plus
Black Friday, the traditional start of the season, falls on repayment plans are more flexible, and can be made week-
Nov. 29, making the official shopping season just 26 days. ly, twice weekly or daily from incoming card receivables.
Plenty of optimism
"We want to make things easier for merchants, to not put
Tariffs and a short holiday sales season aside, consumer them in a bad position," Schulman explained. This includes
spending remains strong in the United States, rising 4.7 not advancing more funds than a merchant can readily
percent between April and June, and continuing that repay from future credit and debit card receivables. "We
trend through July, according to U.S. Commerce Depart- actually spend time [getting to know] every merchant we
ment reports. Jobless claims also remain at historic lows, make an offer of funds to," Schulman noted.
and the official unemployment rate was just 3.7 percent in Gift cards and data collection
September.
Gift card programs can help merchants bolster available
eMarketer, which analyzes data on digital businesses, cash, while also driving sales and greater loyalty. "Loyalty
paints a brighter picture of the 2018 holiday shopping sea- and gift card programs can certainly help a business run
son than the NRF. Sales at brick-and-mortar stores rose 3.9 better," said Demke-Calixte.
percent to $874.42 billion during the 2018 holiday season,
while ecommerce sales soared 16.7 percent to $123.90 bil-
lion.

30