Some Negative Trends Still Dog Retail as Q1 Sales Increased Considering Q4 typically contributes the most to any increase in annual retail sales, Q1 2018 performed quite well, as total retail sales, unadjusted and excluding motor vehicles and parts, were $1.1 trillion, a 5.2% increase compared to Q1 2017. Despite this performance, the downsides of the quarter were the Toys `R’ Us bankruptcy and the closing or announcements of planned closing of Nordstrom, Bon-Ton, JC Penney, Sears, Kmart, Macy’s and other retailers’ stores. In addition, Moody’s Investors Service announced during April there were 28 retail defaults, the most- ever during a first quarter. The latest were Sears Holdings and Claire’s Stores.

It’s Good to Be a Small Business Owner, But Keep Pushing The Q1 2018 Wells Fargo/Gallup Small Business Index was +107, compared to +100 for Q1 2017. This is the highest the index has been since December 2006’s +114 and light years from the - 28 index during Q3 2010. The CNBC/SurveyMonkey Q1 Small Business Confidence Index actually attained a record high of 62, increasing 5 points from Q4 2017’s 57. At the time of the survey, 46% of respondents said the new tax law would have a positive effect on their businesses. In the CNBC/SurveyMonkey survey, those companies with 5 to 9 employees and owners 35– 44 and 55–64 of age had the largest increases in business confidence.

January Performs Rather Well on Heels of Holiday Season According to the US Census Bureau, January retail sales increased 5.2% compared to January 2017, although RetailNext reported sales at brick-and-mortar stores decreased 7.0% YOY, with a 4.4% decrease in traffic. As is typical for most Januarys, there is less shopping and spending during the first weeks of the month following the holiday rush. Sales decreased 8% YOY each of the first three weeks, but the decrease during the fourth week was only 1%. Conversion (CVR), or sales transactions as a percentage of traffic, was the only metric in positive territory for the month, at +0.4%, and the fourth week’s CVR of +1.7% was mostly responsible.

Valentine’s Day Keeps the Retail Blood Pumping for February The US Census Bureau reported a 4.0% increase in February retail sales compared to February 2017. RetailNext, however, said brick-and-mortar store traffic decreased 6.9% YOY, which resulted in a 5.9% decrease in net sales. Not surprising, the days with the best sales performance were the first two Saturdays of the month and the day before Valentine’s Day. CVR and Shopper Yield (SY, or sales divided by traffic) spiked on Tuesday, February 13. Sales declined in all four US regions, with the best results in the South, at -0.9%. Sales decreased the most in the Northeast, at -10.7%, probably because of winter storms.

Late Season Snowstorms Affect Retail Sales, Especially in the Northeast Although store traffic at brick-and-mortar stores didn’t decrease as much during March, or -4.3%, as January or February, sales decreased more, or 7.6%; however, the US Census Bureau reported total retail sales increased 5.1% YOY for the month. All other March metrics, according to RetailNext, also decreased: CVR, 0.4%; ATV, 0.2%; SY, 3.3% and Transactions (sales transactions and return transactions), 7.4%. The significant snowstorms that pounded the Northeast during March also contributed to negative numbers in all metrics: sales, 8.9%; traffic, 0.4%; CVR, 1.0%; ATV, 0.6%; and SY, 7.9%.

Winter Seemingly Has No Effect on Online Sales As well as various retail categories performed during Q1 2018, non-store retailers, which includes “electronic shopping and mail-order houses,” did even better, with sales increasing 12.3% during January; 10.4%, February; and 7.6%, March. Despite the negative news about Facebook, 49% of small-business retailers, participating in the Q2 2018 CNBC/SurveyMonkey Small Business Survey, said they would maintain and 15% said they would increase their current Facebook advertising. According to Kenshoo, a global marketing technology solutions company, total social media ad spending increased 37% during Q1 2018, compared to Q1 2017. Mobile ad spending was responsible for 78% of Q1 2018 total social ad spending.

Advertising Strategies Although retail sales started the year relatively well, it is still a very competitive market. Prove your value as an advertising consultant by helping your prospects and clients to plan for Back-to-School and the holiday seasons now, so they’re ready to maximize sales. With furniture/home furnishing stores and building materials/garden equipment/supplies stores doing very well during Q1, these retailers should continue to target the local market aggressively throughout the summer. With an increase in summer travel anticipated, help retailers create interesting and unique weekend specials and other discounts to snag a larger share of summer apparel; outdoor activities merchandise, such as camping and fishing; and vacation needs.

New Media Strategies Host a “Summer Fun” contest on social media, asking people to share and post their summer plans, preferably on videos. Ask everyone to vote for the most relaxing, most exciting, etc. and award prizes for those who receive the most votes in each category. Use your Website and social media platforms to share safety information related to summer activities: using sunscreen, wearing a hat and drinking plenty of water; extra stretching exercises before sports participation; car vacation emergency kit tips, etc. Now’s the time for local retailers and other SMBs to consider sponsoring children’s and/or adult’s summer sports leagues and creating a separate page on their Websites and using their social media pages to announce scores, highlight players, etc.