According to the eighth annual CIT Retail Outlook, 80% of middle market retailers rate their overall financial condition as healthy or very healthy. Many are cautiously optimistic about the upcoming holiday season and the near-term future.

Sixty percent expect an increase in total sales of more than 5% for the 2016 holiday season, compared to only 33% three years ago. The online study was conducted in August 2016 among 310 financial decision makers within the retail industry (259 middle market retailers and 51 large retailers) by Harris Poll on behalf of CIT Group.

Key Findings

• Middle Market Retailers Predict a Successful Holiday Season: Three in five middle market retailers (60%) expect an increase in sales of 6% or more this holiday season versus last year. Nearly half (49%) expect an increase in online shopping to have the biggest incremental impact on holiday sales this year. Forty-seven percent expect an expansion of Black Friday promotions and 44% expect an increase in online or in-store discounts will have the most incremental impact.
• The Competitive Landscape Continues to Shift: Fifty-three percent of middle market and large retailers agree fast fashion retailers are taking consumers away from U.S. middle market retailers and pose a threat to other categories of goods. Seven in ten (71%) middle market and large retailers feel that it is likely that one or more prominent retailers will disappear in the next one to three years.
• Brick-and-Mortar Stores in a State of Flux: Almost three in five (56%) large and middle market retailers are using their stores differently than they have in the past, with over four in five of those with both a physical and online presence (83%) agreeing that their company is using their physical stores in a way that complements their digital channel. Eighty-one percent of middle market retailers agree that providing a unique shopping experience is an innovative way to attract new customers to brick-and-mortar.
• Web Presence is Now the Price of Entry in Retail: Middle market retailers are less likely to say revenue is growing from stores (45% compared to 59% in 2015) than websites (75% compared to 71% in 2015). Expected growth from mobile is also high at 65%, while phone/catalog growth is low at 28%. Half (51%) cite updating and replacing technology as the key way to connect their channels.
• Mobile and Social Offer Competitive Advantages: Sixty-five percent of middle market retailers believe revenue is growing from mobile. The most common steps used to take advantage of mobile technology remain: creating mobile apps (51%), updating their website to meet consumer needs (50%) and increasing email campaigns (46%).