According to the National Retail Foundation, November and December account for up to 40 percent of annual retail sales and an even greater percentage of annual profits. No wonder shop owners anxiously await holiday season predictions — and why they’re greeting 2010 forecasts with some relief.
The 2010 holiday season: What’s in store?
Following a 2009 season that overcame dismal forecasts to finish 1 to 2 percent over 2008 sales, it’s good early news that 2010 is projected to generate “a gentle sales uptick,” according to experts at the Reuters Consumer and Retail Summit.
The season will be “not bleak, but not bling,” according to retailers at the August 2010 Seattle Gift Show. “It’ll be a good season so long as we remember that people are buying for necessity and utility more than luxury,” one attendee told me. “They’ll want candles instead of candlestick holders, which they already have,” another said. “Or better yet, electric candles,” a gift manufacturer’s rep added, “because they’ll last practically forever.”
Adapting to the holiday shopper’s mood
From Main Street to mega-merchants, consumer sentiment is similar: Spenders are conservative, practicality is in fashion, and retailers are adjusting accordingly.
The Neiman Marcus Christmas catalog, famous for its extravagant offerings, this year acknowledges “a tumultuous year” by interspersing the “ultra-luxe and unexpected gifts for which we’re known” with “Little Gems” and “Fab Finds” for the budget-minded, “proof that tokens of affection don’t have to be extravagant to be brilliantly received.”
Even Saks Fifth Avenue is courting the price-sensitive, through its Off 5th brand. Opening a Portland, Oregon, store this August, Off 5th President Robert Wallstrom defined the store’s customers as those seeking “a great deal and great quality and great style,” words that define most 2010 holiday shoppers, who are in the mood for a season of deals.
Market-moving holiday strategies
A roundup of expert advice includes these holiday-season recommendations (for even more ideas, visit my "Holiday Marketing "To Do" from last year):
Customers will move quickly only for high-demand products. If you have the newest, hottest gift in stock, use promotions, social networks and e-mail communications to alert customers in order to generate early revenue. For everything else, expect shoppers to wait for price reductions.
Customers know that overstocking leads to price slashing. Smart retailers aren’t over-buying, even at the risk of selling out and sacrificing late-season sales. Instead, they’ll work to convince customers that buying early avoids likely out-of-stock situations later.
Customers demand pricing options. They’ll rarely opt for the top-line choice but they’ll shun the lowest offering if a mid-range is available, so offer at least three price or quality tiers to achieve mid-range versus lowest-price sales.
Those seeking luxury require special treatment. Use private sales and invitee-only promotions to cultivate high-end buyers, along with bonus offers when purchase levels are achieved — an insider deal that the budget-conscious also appreciate.
Local buyers expect unique yet competitive offerings, including inventories tailored to regional tastes, well-researched competitive pricing, and point-of-purchase conveniences such as easy returns, delivery, alterations, gift wrapping and after-purchase service.
Customers read online reviews before buying, so make sure your business appears well on review sites. (For help, read "Playing the Online Ratings Game")
Online purchases will account for 25 percent of holiday sales, and nearly all customers will research and compare online even if they buy locally. Test your website to see that it’s findable, fast-loading, mobile-friendly on all platforms, and able to handle volume. Make sure that it features a compelling gift center, buy-now offers, commerce options, one-click calling and arrival directions.
Customers have become channel agnostics. They shop online then buy locally. They shop locally then purchase online. They bring online purchases to retail outlets for returns, help or upgrades. They follow in-store purchases with online service. Prepare to seamlessly accommodate them via any channel.
Online or offline, customers gravitate toward merchants that offer value they can trust. Win their trust by looking good online and in reviews, offering useful products that are competitively priced, and going beyond the expected with friendly service and follow-up in order to generate not only holiday sales but buyer rapport that carries your business into a happy new year.
Barbara Findlay Schenck is a small-business strategist, the author of “Small Business Marketing for Dummies,” and the co-author of “Branding for Dummies,” “Selling Your Business for Dummies” and “Business Plans Kit for Dummies.”