The 2012 Holiday Sell

The 2012 Holiday Sell

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As is the case almost every year, the fourth quarter and particularly the holiday sell will make or break the year for many retailers. The buying frenzy that’s traditionally seen in these final three months, hopefully culminating in a big Black Friday/Cyber Monday payoff, is typically responsible for up to 60% of the sales revenue for the retail year. With that much at stake, paying close attention to consumer trends and economic predictions, and maneuvering your sales and marketing efforts accordingly, can pay major dividends.

While we’ll assume you’ve got your in-store world in order on that front, we thought we’d chat with a few of the experts on the consumer, economic and retail sides of the fence to see what they are seeing and feeling for this year’s holiday selling season.

Engaging Your Customers
The folks at Epsilon, a consumer behavior research group, told us that truly engaging your customers during this holiday selling season will be more important than ever.

“Holiday marketing communications, like all times of the year, need to focus on the consumer. Insights into past consumer behavior during this critical time of year will help marketers create more consumer-focused campaigns that really resonate,” said Jill LeMaire, senior director of Digital Strategy at Epsilon.

She added that their research found that creating pre- and post-holiday strategies “that leverage consumer segmentation strategies will help marketers break through the holiday noise and drive online and in-store purchases.”

Based on data the group gathered from the 2011 holiday sell through, online sales peaked during the week of Cyber Monday, and again two weeks before the Christmas holiday, so your e-mail and mobile marketing campaigns might benefit greatly from taking this cue (see sidebar for more).

Less Affluent Buying More
NPD’s Consumer Tracking Service revealed some interesting findings as well, particularly with regard to spending within certain income brackets. In the last year the research firm revealed “that less affluent consumers have purchased new technology at a greater rate than those with higher incomes,” NPD’s Liz Cutting explained. “Among U.S. households with incomes of $45–$75k, 72% reported ownership of a compact camera, while only 20% owned a tablet, showing clear potential for a wide audience to buy a new toy they crave. Still, only 15% reported DSLR ownership, also opening the door for highly promoted bundles of DSLRs and mirrorless cameras accessorized as solutions for the first-time buyer.”

NPD feels that the camera category in general will have a fight on its hands in attempting to draw attention against the spotlight of continuously fuller featured smartphones and an onslaught of competition from all the new tablet offerings expected in Q4.

New Tech Will Flourish
CEA’s chief economist, Shawn DuBravac, expects some of the newer imaging technologies should enjoy a solid holiday sell: “DSLR and mirrorless (compact) cameras are expected to do well during the holidays because they are newer technologies. The wearable products (GoPro, adventure gear, etc.) could certainly do well, too. All the accessories for digital imaging (e.g., lenses, carrying cases) have the potential for good holiday sells now that DSLR cameras have been out for a while,” he said.

DuBravac added that the iPhone 5 will be a major player in the sale of accessories this holiday season, and CEA also predicts the overall CE accessory market will exceed $4 billion this year and remain a hot category through the holiday selling period.

As for where consumers will be buying them, CEA tells us from anyone who displays an enticing assortment with associates willing to take the time to help them buy. Tech accessories have become impulse items. If you’ve been paying attention, every mall now has at least one kiosk that sells phone cases, car cords and chargers. Realizing the fact that most buyers at these retail pop-ups didn’t necessarily set out to upgrade their phone cases is an important point to consider. Once they see the display and hear that cases come with built-in USB adapters and other features, those lookers became buyers, particularly around the holidays.

Economic Concerns
Taking a closer look at the economy, despite a slight uptick predicted for the second half, 2012 will mark the third straight year of disappointingly slow growth—winding up at around 2% after inflation. However, from George Lee, a Deutsche Bank economist, comes the feeling the year could end on a bit of an up note.

“We expect consumers to spend a little more freely, encouraged by lower gas prices and shrugging off the modest rise in food prices from the drought,” Lee explained, but he added that uncertainty will continue to plague the economy, dampening growth, through at least the end of this year and possibly into spring 2013.

The U.S. Department of Commerce (DOC) has been encouraged, though we’ll refrain from using the word optimistic, by an increase in consumer confidence during the summer months. While higher gasoline prices have threatened to restrict funds available to consumers during Q4, the DOC still feels there’s reason to believe any short-term increase in the second half of the year won’t be much of a drag on retail sales. Despite an average 19¢-a-gallon hike in pump prices this summer, all major categories of goods, including consumer electronics, saw an increase in sales during that period.

Lauren Sosik, a mar/comm veteran who previously ran a Connecticut-based marketing firm, claims price, perhaps more than ever, will be a key factor as we head into the year’s final three months. “The holiday selling season is going to be all about price,” Sosik predicted. “Retailers have to start discounting sooner, which they’ve already done the past few years, as consumers now simply expect it. Once you do that, you can’t go back. And this year’s going to be that much harder on the pricing front.”

Sosik also noted she is still seeing a big shift in the retail sector from specialty retailing to value retailing. “Value is not only price but it’s also breadth, depth and quality of the merchandise vis-à-vis price,” she added

Ready or not, the frost is on the pumpkins and that chill is in the air, so start Ho, Ho Ho-ing and hopefully Sell, Sell, Selling as well.

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