With record high temperatures throughout the West and flooding in the Midwest, it’s hard to believe that the holiday selling season is near. No, it’s here. We’re well into fall; leaves are falling and baseball fans have turned their sites to football.
I don’t have a crystal ball, but I do have some thoughts on what the upcoming few months might bring.
• Black Friday will come earlier—perhaps just as you see this column. There will be heavy advertised discounting as stores work to lure early season buyers from their competitors. Retailers have learned from their successes during their Fourth of July and Labor Day promotions that special events and low prices do motivate consumers.
• Although consumer confidence recently fell to a seven-month low, many say consumers are gearing up to spend more on family and friends than they did last year. Yes, purchases will be more considered and will be made more carefully, but shoppers will be looking to buy.
• There is a fair amount of frugality fatigue among consumers. They’ve been “good” for a couple of years by paying down debt and growing their savings. There’s pent-up demand out there.
• Whatever the outcome, with the negativism of the mid-term elections behind us, Americans will be more upbeat. The political unknown of the past few quarters will have been resolved and both sides can get back to their “real” lives.
• Even with unemployment still hovering near 10 percent, most potential buyers are working. Real wages may have fallen some, but with reduced debt levels and more conservative buying habits in place, folks will have money to spend on gifts this year.
• New technologies continue to intrigue Americans.
• Dropping home values force many to stay in the one they own rather than buy something new. That should make them want to upgrade and invest in them.
Fourth quarter opportunities abound for those who go after them early and aggressively. Your game plan might include some of these components.
• Refine your merchandising plan. Make sure you stock screaming price leaders in every category. If necessary, be prepared to lose money when you do sell your door busters. Build on them by including feature-rich more profitable goods in key price points.
• If you haven’t done it yet, consider adding low priced, traffic-building products to your mix. You may not make a lot of money selling headphones, GPS, iPods, game consoles, portable stereos, digital and video cameras, but you’ll attract some younger customers and perhaps get others to add smaller impulse purchases to their baskets.
• Create packages that include multiple products and the accessories that go with them. Dealers have successfully promoted “Buy three get one free packages” that offer a free over-the-range microwave with the purchase of a refrigerator, range and dishwasher.
• 3D bundles include the TV, glasses and movie, but leave room to add mounts, audio, cables, surge protectors and installation.
• Get your team ready. Explain your product line-up to your associates. Do some additional training so that they know the benefits of step-up models. Show them how packages, bundles and accessories can add profit to the sale and extra commission to their checks.
• Carefully craft a promotional calendar scheduling non-stop events from your Black Friday kick-off through your after Christmas clearance sale, your January inventory liquidation sale and your Super Bowl promotion. Develop a budget and negotiate with your newspaper and electronic media. Be aggressive. Promote leaders in every category.
• Offer extended financing. Use vendor-funded consumer rebate programs to draw traffic and maintain profitability.
• Update your website frequently. Use e-mail marketing campaigns to show loyal customers your special purchases, on-line-only bargains and clearance center.
• Get in the spirit. Decorate your store. Replace old, worn out trees and ornaments. Offer hot spiced cider, candy canes and cookies to shoppers. Bring Santa in on weekends and offer free digital family photos.
With good planning and careful execution, some retailers do 30 percent to 40 percent of their annual sales during the fourth quarter. This year will be no different.
It’s going to be a tough, bumpy ride, but yes, Virginia, there is a Santa Claus. He may come in like a brutal Nor’easter, but he’ll still show up. Those who get out there and fight for holiday sales will be rewarded.
Best wishes for a happy and prosperous holiday season.