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[14 comments]

Chains Have Plans to Keep Americans Spending

November 29, 2012

Now that the consumption craziness associated with the Thanksgiving through Cyber Monday period is over, what do retailers do to keep Americans shopping for the rest of the holiday season?

There is, of course, the continual barrage of great deals and discounts still out there.

Kohl's promises that one lucky shopper a day will get their shopping cart on the house. Others will just have to settle for the chain's fantastic sales bargains.

Target and Neiman Marcus have gotten together for a joint promotion that will have both chains selling a limited-edition collection of items from top designers.

Banana Republic is running its "12 Days of Joy" promotion with discounts on new, exclusive items every day. The company is also running a contest where it will give away six Fiat 500 cars.

J.C. Penney is going the altruistic route, bringing its Holiday Giving Tour to 12 cities throughout the U.S. with the intent of "carrying out special acts of generosity" in a different town each day. The acts will include engaging in American holiday traditions, including "Christmas tree lighting and ice skating to Santas and tobogganing."

"You just can't all keep competing on price all the time," Barbara Kahn, a marketing professor at the Wharton School of the University of Pennsylvania, told Bloomberg News. Attracting shoppers past the first few days of the selling season require "customer experiences or 'gifts' that encourage people to come in."

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Discussion Questions:

What do you think merchants need to do keep up the sales momentum created during the Thanksgiving through Cyber Monday period? Are there any retailers running programs that you think are particularly strong or weak this holiday season?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How optimistic are you today compared to a month ago that retailers will have a strong selling season this year?

Comments:

With technology at our fingertips, and everyone knowing who has the lowest price on almost everything  there better be something really unique or a must have to keep the sales strong this year. I have plenty of friends who shop a few weeks after Christmas, getting 75% off all kinds of stuff, and using those items for gifts in 2013.

The last minute rush is inevitable for the slackers, which is profitable for all stores and outside of that, continuing to run the 50% off or more sales is the only way most consumers will even get excited about shopping these days. The online merchants also have changed the game forever, so for all of us in the game, Keep pushing hard, and hopefully you'll have some profits to put away to start the New Year.

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Tony Orlando, Owner, Tony O's Supermarket & Catering

Sadly, they are victims of their own trap and as a result, continual discounting will "win" the day.

There is a downside to creating this feeding frenzy for stuff, this new national consumption mania.

As an industry, retail is teaching Americans that the most important part of holiday shopping is to buy early at discount. If the public is convinced the only way to continue to get them to spend is to continue the discounting.

There's even a risk here though, since if the post "Black Thursday - Monday" are better than when the spending waters are being chummed with those $200 big screen televisions and those $30 computers, the public may learn to hold their fire in the holiday assault until the "best" deal becomes available.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

Many stores' promotional plans were put to bed a while ago, and positive results from last weekend will help them avoid last-minute scrambling. But it's clear that their e-commerce sites provide opportunity for flexible promotional planning not available in print ads.

It's equally clear that a big part of the success of last weekend's sale events comes from the breadth of discretionary purchases. (The weekend shopping wasn't all about electronics, for a change.) This bodes well for softlines merchants, especially the ones who are willing to be more flexible about their opening hours and who do a better job integrating their e-commerce and brick-and-mortar channels.

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Dick Seesel, Principal, Retailing In Focus LLC

Reminds me of the golf adage "Drive for show, putt for dough."

The Gray/Black/Cyber period was a big and showy beginning, however, it is continued execution as the time grows short that will determine whether there is any profit/dough at the end.

Paul R. Schottmiller, Senior Vice President of Strategy, Retail and Consumer Goods, Merkle

I agree with Professor Kahn—most retailers need to rely less on price and sales and more on customer experiences and events to get people in the door. Once shoppers arrive, retailers must make sure the experience is positive and fun. Otherwise, all the efforts to drive customers to the store are wasted.

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Al McClain, CEO, Founder, RetailWire.com

George, a good snapshot and topic. Reporting directly from a family of very active shoppers and extensive dialogue with people talking with retailers on a regular basis, the core of the retail momentum factor is still price. My family shoppers are still all price focused.

Retailers can leverage many tactics to drive more sales and the Booz team has a good report on some of the in-store and online techniques that can help.

This report is available here.

Keep in mind it is still price and as Booz states "virtual gifting" will see s strong increase. Downloading your gift saves you from cleaning up all that wrapping paper! Think virtual and great price!

Tom

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Tom Redd, Vice President, Strategic Communications, SAP Global Retail Business Unit

Discounts and true bargains will speak loudly this shopping season.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

Will any retailer risk losing sales by not offering competitive prices? Sales and discounts will continue, thereby training consumers to purchase on sale—whenever the lowest prices are being offered. Offering low prices during specific time periods for a changing group of products could keep consumers interested if they can keep all the offers straight and if the retailers could really implement the changing price changes. This promotes the idea of treasure hunting, but still trains consumers to buy on sale.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

I like the idea of limited edition merchandise. It's brand-right for both Target and NM. Other retailers should really strive for ideas that are brand-right as well. The problem is that the entire sector has made "deals" the default for brand-right, so the shopper has no idea what else any given retailer might stand for.

The white space in the market is shopper service and experience, both of which can be more differentiated today given the lack of either at most retailers.

I'd like to see a retailer offer me the opportunity to create a gift wish list online, and then offer someone to meet my husband at the door, efficiently walk him over to the items on my list, and let him choose. If he can cash out with the person who's his "escort" and avoid standing in various lines...everyone wins. I'm betting most men who have to buy for a partner would jump at this service/experience.

It's really not all that difficult to focus on the shopper.

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Anne Howe, Senior Vice President, Shopper Solutions, part of Acosta Mosaic Group

This question perfectly outlines the downside of such dramatic promotional activity on Black Friday weekend and Monday following: big let down the next week or two. Retailers are forced to compete with their own previous week at risk of becoming overly promotional in the highest traffic weeks of the year—thereby giving away margin.

It's all too much, if you ask me—the barrage of promos, emails, ads, obnoxious signage—just gross. It's not really retail, more like a carnival give away. How 'bout we tone it down next year and drive towards a volume/profit build to Xmas ... you know, old school. (If only....)

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Lee Peterson, EVP Creative Services, WD Partners

A different take—those who will "win" are the ones who have done a smart job of maintaining their inventories and managing stock. With an extra weekend this holiday season, more days to shop and last minute buying, some stores are going to look mighty thin on the shelf in certain categories. My guess is Macy's, Nordstrom and Target will be big winners.

David Slavick, Director, Loyalty & Retention, FTD.com

Of course, the major issue is that more than likely, the consumer spending may have been spread across an extended weekend, and incremental sales might be hard to capture. However, overall Thanksgiving Weekend spending is up, so there is hope, at least in the US, for a good Holiday Season.

CPGs and retailers need to stay active, more than ever with their social listening efforts to spot trends in near real time. Also, better marketing collaboration with brands and stores helps drive overall value perception in shoppers' eyes.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

Product, price, promotion and place, plus customer service. These stalwarts of retail should be a key focus for all retailers now, as they are faced with the difficult task of cutting through the barrage of promotional and marketing noise that is created this time of year. The result is a tremendous continuity of spending...and out of stocks (the 3 worst words in retail) during this time of year. Eliminating this while offering great customer service should be the mantra of all retailers. It will be their key to success and continuity of the post Black Friday sales momentum.

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Kai Clarke, CEO, American Retail Consultants

Pricing/discounting strategies are a locked-in foundation of American retail dynamics. However, that is only the price of entry. The winners must execute on desirable product offerings, unique and positive customer experiences, and an overall sense of engagement to avoid over-reliance on price. In an era of full price transparency, only authentic experiences will create long term viability.

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Mike Osorio, Senior VP Organizational Change Management, DFS Group

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