November 21, 2007
Accessorizing the Holiday
By Tom Ryan
Many retailers are focusing on providing consumers little add-ons and accessories to supplement their gift giving this holiday season. According to the Wall Street Journal, examples would include a $10 case for that $50 gift card, a hat and scarf to match a Harry Potter doll, or a Swarovski-crystal “jewelry” that clips onto a bra.
The move is partly an attempt to move items in a likely difficult holiday period without relying on pre-holiday discounts. But the add-ons also offer shoppers an array of cheaper “impulse” items while somewhat reducing a store’s reliance on bigger ticket selling. Another advantage to accessories is that retailers don’t tend to mark them down as often.
“Last year we had very aggressive sales plans,” Victoria’s Secret chief executive Sharen Turney told the Journal. “This year we took a conservative approach,” by ordering less inventory, changing displays often and adding more “fun and functional” items, she said.
Victoria’s Secret has more than tripled its range of small accessories this holiday season, such as $25 underpants with a pocket designed to hold an iPod and matching earbuds. Another accessory is a $42 dangling Swarovski-crystal earring-like piece of “bra jewelry” that comes with two small bottles of perfume. Wearers are instructed to spray one of the scents onto the jewelry and then clip it onto the front of a bra. Victoria’s Secret also offers a $10 leopard-print luggage tag with a label claiming “I am perfect for a gift card!”
At Best Buy, a holiday brochure distributed to shoppers in stores suggests combinations like “iPod plus headphones plus armband.” Best Buy spokesman Brian Lucas says that as part of its “Maximize the Gift” approach, a sales associate might help a shopper find a less-expensive camera with fewer megapixels, to leave room in the spending budget for accessories like a printer or memory card.
Other examples of the accessorizing trend:
- Target is selling $4.99 kits of beads and sequins that customers can use to decorate their $89.99 digital frames;
- Owners of the videogame “Guitar Hero III” can buy $14.99 “guitar skins,” adorned
with skulls or an American-flag design; - Neiman Marcus has an $88 wireless computer mouse in the shape of an actual
mouse, with Swarovski-crystal eyes and ears; - V-Moda, a Los Angeles-based music-accessories company, has collaborated
with Apple on a $99 iPhone headset in colors like chrome and burgundy.
Discussion Questions: What do you think of the potential for add-on accessory sales? How do you think the overall accessory category will do this holiday season given the likely tough retail climate?
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The most interesting part of this trend is that accessories are being redefined. Most consumers and retailers might think of “accessories” as an add-on to apparel purchases, or with a life of their own in categories like jewelry and handbags. But almost all the examples cited are add-ons to electronic items and other “hardlines” businesses. More power to the creative retailers who figure out ways to add impulse items (and higher average transactions) to their customers’ shopping carts.
The key to this emerging trend is the opportunity to make add-on, impulse sales at full margins–and often at higher than full margins. With discounts and promotions being almost out of control, it’s an opportunity to increase not just units per transaction and sales dollars per transaction, but most importantly, margin dollars per transaction.
This trend is only limited by merchandisers and retailers imagination, to create compelling must-have impulse items to accompany the primary purchase.
Scanner, I feel your pain. My wife wants nothing but the small 1-2 oz. bottles of perfumes. Her main reason is portability. None of the major fragrance companies can figure this out. All they want to do is sell the large bottle and give you the small one as a bonus. After collecting many unused large bottles, she has decided to clean house and throw them all away. I guess that I will be shopping everywhere except the perfume counter this year.
I will be continuing to look for purse size options of the best names in women’s fragrances this year as I always do each and every year…with little luck. I don’t want the $100 bottle as a small add on, nor does Mrs. Scanner; it doesn’t fit easily in her purse.
I will look again this year and remain optimistic but yet I’m prepared to be disappointed. It sure seems like a huge missed opportunity for the major retailers with the largest selections of top fragrances. I am sure they remain hopeful to sell me up to the large bottle, but it hasn’t worked yet. Okay, sure it has. And, again, I lost my whole argument.
Maybe this year, I’ll be pleasantly surprised.
Creatively-presented accessory sales have been a staple of retail success for decades, of course. It’s simply a type of passive “upselling.” The phrase in Tom Ryan’s comments that caught my eye, however, was “supplement their gift giving this holiday season.” How, exactly, is selling accessories during the holidays different than selling them any other time of the year? If the accessories are seasonally themed or designed, they must be under-ordered (possibly losing a few sales) if the retailer doesn’t want to discount them in January or store them until next year.
Fragrance manufacturers, veterans of seasonal upselling, have long offered gift packs and/or free (branded) bags or totes with purchases of a specified amount. As the holidays come to an end each year, fragrance retailers begin giving away the branded goodies with ANY sale and discounting the gift packs severely. Anything to avoid having anything left over. But, the manufacturers and retailers continue offering these “accessories” every year because it works.
I’m a sucker for the accessories. Every time I purchase a gift item for a family member, I always add everything that matches from the adjoining displays. Deep down, I feel that this somehow helps to personalize the gift and make it a little more special. More packages to open, too. Looks like I’m not alone.
Accessories create impulse opportunities throughout the store. Impulse items allow for greater additional dollar sales, at a greater margin rate than most items. These compliment the shopping experience rather than detract from it, and add more dollar sales to the shopping basket. They also provide for a greater share of wallet, keep the consumer in the store longer and enable the retailer to provide a more unique shopping experience while driving GM dollars and unit sales up.
For many years, we in the Food Industry have seen smart retailers merchandise General Merchandise and/or high margin tie-in items with their price-led end cap displays.
In an era of increased gift card giving it’s always nice (and profitable) to enclose a “little something” with the gift card…I think this is a smart idea and one of the most creative merchandising and revenue ideas a retailer can pursue anytime of the year.
This holiday is expected to be difficult, with consumers concerned about overall economics, as well as personal financial limitations. Generally, holiday shopping periods like the one we all are anticipating do not lend themselves to “impulse” or “add on” purchases. So in the sense that the expectation may be that these smaller, less expensive, related products will generate plus sales…not on a macro level, no.
On a specific retailer level, having lower price points and less expensive products associated with larger purchases may indeed shift market share from one location to another. Particularly when budgets are tight, gift givers and parents in particular tend to focus on “lists” and intend to derive as much “value” (defined as “the person receiving the gift really appreciates it”) as possible. Add on accessories are better “bets” in gift giving when the core product has already displayed great “value” or is expected to generate great “value.” In this scenario, the retailers with attractive add on accessories will steal share from other retailers the consumer would have gone to for the “filler” items on their list.
The Queen of accessories for young ladies is Claire’s Stores, who built an international empire on low price accessories. They were bought by Apollo in May, so the stock isn’t traded anymore. Unfortunately, the accessories business is like all other retail categories: it depends on traffic. The long term weather forecast for much of the country: much colder than last year’s Christmas, which may add traffic.
As a useful and fun accessory, I noticed that LL Bean is offering men’s flannel sleepwear pants in a flannel gift bag of the same material. That saves consumers wrapping and the bag can be reused many ways.
As for fragrance manufacturers, I can’t figure out why they think women want another tote or purse when they already have too many and all the “accessories” basically look alike.
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The most interesting part of this trend is that accessories are being redefined. Most consumers and retailers might think of “accessories” as an add-on to apparel purchases, or with a life of their own in categories like jewelry and handbags. But almost all the examples cited are add-ons to electronic items and other “hardlines” businesses. More power to the creative retailers who figure out ways to add impulse items (and higher average transactions) to their customers’ shopping carts.
The key to this emerging trend is the opportunity to make add-on, impulse sales at full margins–and often at higher than full margins. With discounts and promotions being almost out of control, it’s an opportunity to increase not just units per transaction and sales dollars per transaction, but most importantly, margin dollars per transaction.
This trend is only limited by merchandisers and retailers imagination, to create compelling must-have impulse items to accompany the primary purchase.
Scanner, I feel your pain. My wife wants nothing but the small 1-2 oz. bottles of perfumes. Her main reason is portability. None of the major fragrance companies can figure this out. All they want to do is sell the large bottle and give you the small one as a bonus. After collecting many unused large bottles, she has decided to clean house and throw them all away. I guess that I will be shopping everywhere except the perfume counter this year.
I will be continuing to look for purse size options of the best names in women’s fragrances this year as I always do each and every year…with little luck. I don’t want the $100 bottle as a small add on, nor does Mrs. Scanner; it doesn’t fit easily in her purse.
I will look again this year and remain optimistic but yet I’m prepared to be disappointed. It sure seems like a huge missed opportunity for the major retailers with the largest selections of top fragrances. I am sure they remain hopeful to sell me up to the large bottle, but it hasn’t worked yet. Okay, sure it has. And, again, I lost my whole argument.
Maybe this year, I’ll be pleasantly surprised.
Creatively-presented accessory sales have been a staple of retail success for decades, of course. It’s simply a type of passive “upselling.” The phrase in Tom Ryan’s comments that caught my eye, however, was “supplement their gift giving this holiday season.” How, exactly, is selling accessories during the holidays different than selling them any other time of the year? If the accessories are seasonally themed or designed, they must be under-ordered (possibly losing a few sales) if the retailer doesn’t want to discount them in January or store them until next year.
Fragrance manufacturers, veterans of seasonal upselling, have long offered gift packs and/or free (branded) bags or totes with purchases of a specified amount. As the holidays come to an end each year, fragrance retailers begin giving away the branded goodies with ANY sale and discounting the gift packs severely. Anything to avoid having anything left over. But, the manufacturers and retailers continue offering these “accessories” every year because it works.
I’m a sucker for the accessories. Every time I purchase a gift item for a family member, I always add everything that matches from the adjoining displays. Deep down, I feel that this somehow helps to personalize the gift and make it a little more special. More packages to open, too. Looks like I’m not alone.
Accessories create impulse opportunities throughout the store. Impulse items allow for greater additional dollar sales, at a greater margin rate than most items. These compliment the shopping experience rather than detract from it, and add more dollar sales to the shopping basket. They also provide for a greater share of wallet, keep the consumer in the store longer and enable the retailer to provide a more unique shopping experience while driving GM dollars and unit sales up.
For many years, we in the Food Industry have seen smart retailers merchandise General Merchandise and/or high margin tie-in items with their price-led end cap displays.
In an era of increased gift card giving it’s always nice (and profitable) to enclose a “little something” with the gift card…I think this is a smart idea and one of the most creative merchandising and revenue ideas a retailer can pursue anytime of the year.
This holiday is expected to be difficult, with consumers concerned about overall economics, as well as personal financial limitations. Generally, holiday shopping periods like the one we all are anticipating do not lend themselves to “impulse” or “add on” purchases. So in the sense that the expectation may be that these smaller, less expensive, related products will generate plus sales…not on a macro level, no.
On a specific retailer level, having lower price points and less expensive products associated with larger purchases may indeed shift market share from one location to another. Particularly when budgets are tight, gift givers and parents in particular tend to focus on “lists” and intend to derive as much “value” (defined as “the person receiving the gift really appreciates it”) as possible. Add on accessories are better “bets” in gift giving when the core product has already displayed great “value” or is expected to generate great “value.” In this scenario, the retailers with attractive add on accessories will steal share from other retailers the consumer would have gone to for the “filler” items on their list.
The Queen of accessories for young ladies is Claire’s Stores, who built an international empire on low price accessories. They were bought by Apollo in May, so the stock isn’t traded anymore. Unfortunately, the accessories business is like all other retail categories: it depends on traffic. The long term weather forecast for much of the country: much colder than last year’s Christmas, which may add traffic.
As a useful and fun accessory, I noticed that LL Bean is offering men’s flannel sleepwear pants in a flannel gift bag of the same material. That saves consumers wrapping and the bag can be reused many ways.
As for fragrance manufacturers, I can’t figure out why they think women want another tote or purse when they already have too many and all the “accessories” basically look alike.