November 17, 2008
Retail TouchPoints: New Promotional Trends Emerge as Retailers Launch Early Holiday Sales Offers
By Andrew Gaffney
With the holidays, as expected,
arriving earlier at retail, Retail TouchPoints staff has been tracking
the new holiday promotions both online and offline and our editors have
highlighted the following top five trends we are seeing within FSIs, email
campaigns and TV spots during the first week in November.
The five promotions address
the realities of the challenging economy:
- Communicating
Stability: Taking a “Lee Iacocca
In The Customer In Box” approach, Bill Crutchfield, founder and
CEO, of multi-channel retailer Crutchfield Corporation, recently sent
a personal message to their valued customers pointing out “one
factor that we all need to consider is the stability of the companies
with whom we do business.” Touting the company’s conservative
approach to credit and expansion, Mr. Crutchfield reminded customers, “We
have no debt, a perfect credit rating and a legacy of fiscal prudence.
Therefore, we will be around to serve you as we have served millions
of customers for the past 34 years and throughout the last four recessions.” - Gift With
Purchase Offers: Target’s first holiday circular
was loaded with promotions of free gift cards for customers who make
purchases over a certain dollar value. Target was obviously not alone
in employing this strategy and it will be interesting to see if the
spread of gift card giveaways might cut into the growth of gift card
sales. - Price Point
Collections: Bath & Body Works actually
rolled out its holiday offers prior to Halloween, promoting gift
offers priced under $25, under $50, etc. This will likely be a more
common approach this year, considering that TNS Retail Forward ShopperScape
research also showed that 26 percent of consumers were open to switching
their “shopping at retailers that offer lower prices or better
deals than retailers where I usually shop.” - More for the
Store: In
order to keep pace with trendsetters such as Apple, many retailers
have invested more heavily in in-store technology such as mobile devices
and digital signage to make the shopping experience more interactive.
Retailers are also investing more in in-store events. For example,
a Circuit City email campaign focused on “”How To events offering education and
buying tips for digital cameras, TVs, and iPods. - Continuing
the Conversation: Looking beyond the traditional
forms of engagement — email, print, TV — more retailers are
turning to social media and mobile marketing this season as a way to
drive traffic to their websites and physical stores. About a quarter
of the country’s retailers who are trying to ramp up online holiday
sales plan to create pages on Facebook to promote their sites, according
to a recent survey released by Shop.org. The survey found that 43 percent
are adding videos of products and 33 percent are posting customer reviews.
Discussion Questions:
What trends have you noticed in holiday promotions so far this year?
Of those mentioned in the article, which promotions will provide most payback
in either the short term or the long term?
BrainTrust
Recent Discussions
Discussion Questions
Poll
I’ve noticed a number of promotional gimmicks, but one thing has been missing: the kind of discounts that will make consumers reach for their wallets.
Customers are very smart people. When prices broke last year much earlier than in the past, they understood that retailers were going to bid prices down as Christmas got closer. They are waiting for the same thing to happen this year. Retailers have generally done a good job in tightening up inventories, although not nearly enough given the stunning decreses we’ve seen lately, but customers are still going to wait them out. Retailers can try any number of different offers, but right now customers are only speaking one language: $$$.
If I were holding my breath waiting for an innovative retail marketing approach this holiday season, I’d be dead. The most successful holiday promotions here in NorCal this year are the going-out-of-bidness, wall-to-wall, everything must go, what-is-your-offer-for-these-fixtures liquidation sales by Mervyns and Linens-N-Things. Unfortunately these sales are pulling dollars away from retailers who remain open, and cannot be duplicated in the future.
Was it Einstein who said insanity was doing the same thing over and over and expecting a different result? Substitute “retail” for “insanity” and you’ve pretty much got a picture of this year’s holiday season marketing landscape. MOTS, More Of The Same.
All of these promotional concepts are good for icing on the cake, but they do little to address the key issues driving purchasing behavior: price, price, price. Retailers need to address this need for lower pricing head-on by reducing prices, and then backing this up with enhanced customer service and product availability (they need to avoid out-of-stocks at all costs on promotional items). This will get the retailer on-track to reflect the concerns of their customers and ensure that they have best positioned themselves for success in these recessionary times.
“None of the above” best sums up what I’ve seen so far for Christmas promotions. I haven’t really seen much in the way of festive or seasonal advertising and promotions yet. I’m sure that will change in the coming week or two.
The best thing for me as a consumer is usually the price point gift suggestions that typically come in a catalog. This lets me select a gift from the $20 or $25 page if that’s the range I have for that recipient. I always find these catalogs guide me very quickly to look at price ranges one or two slots higher.
It’s all about the price this year. Skittish customers who are worried about their jobs, who have watched their retirement money shrink by 40%, and who wander the grocery store in amazement ($4.99 per pound for hamburger?) will be looking for great sales. Retailers will be smart to remember that this year, it’s chic to be frugal.
I believe that many consumers are waiting for the deals that Mr. Goldberg referred to. Many will cherry pick items on Black Friday and wait for the predicted deep discounts for the bulk of their holiday shopping. Doom & Gloom predictions on the economy will make people more willing to fight the crowds and further compress the season.
Two things, very simply, from the perspective of a merchant and a consumer:
1. We are in a deflationary economic period. For retailers, this unfortunately means that prices need to come down. At least part of this is unfortunately going to come through price promotion.
2. Consumers that are still spending need a reason to do so. This means that they need direct communication with offers that will motivate them to spend when inertia will mean otherwise (i.e., not shopping).
Nice work. Very innovative and consumer friendly. However, I have to wonder how friendly these same stores are when it comes to their return and service policies.
Everyone in our industry has been aggressive with promos and sales. Retailers with strong loyalty programs should be going full tilt on the bonus points collections and I have seen some interesting points promotions this season.
Massive price reductions and front page loss leaders will get people in the door but retailers need an aggressive shielding and merch plan to capitalize on the foot traffic. One small chain that I work with decided to put hot new items at the corners of the store instead of a bulk run in the front end or back end. So far it has done a good job of spreading foot traffic throughout the stores and we’ve seen a pickup in the basket over last year. I like the promotions and deals out there, we just need to execute more creatively.
I think that the response has differed (and should differ) by type of retailer: those that are net beneficiaries of destination reduction and those that are not. For the latter, leveraging low price points to drive trips makes the most sense; for the former, where traffic is already up (grocery, mass, club), then basket-driving, in-store promotional activity around incremental purchases is more effective.
Retailers like Target are taking pains to shore up their brand-image TV advertising with a clearer value positioning. You can expect to see more “aspirational” stores following this tactic, in order to reinforce the sale pricing in their circulars. I’m not sure anyone will do this as consistently and convincingly as Walmart, however–their slogan of “Save money, live better” is clearly resonating with consumers. To Max’s point: If yesterday’s sale circulars are any indication, sale pricing is not especially unusual or compelling compared to last year.
A few of the things I’m seeing this year from the corporate retail world:
1) Corporate employees with one eye on their jobs and another eye on caller-id, hoping it isn’t human resources. Happy to survive another week. Morale is definitely not as high as in prior years.
2) More awareness of customer preferences. Less TV and radio dollars being spent.
3) Renewed focus on direct marketing
4) Grumblings from marketers about high cost of direct mail and postage
5) More interest in lowering direct marketing costs, getting higher response rates and gaining more flexibility in time and decision-making power by increasing use of digital media–e-mail, mobile and voice mail.
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I’ve noticed a number of promotional gimmicks, but one thing has been missing: the kind of discounts that will make consumers reach for their wallets.
Customers are very smart people. When prices broke last year much earlier than in the past, they understood that retailers were going to bid prices down as Christmas got closer. They are waiting for the same thing to happen this year. Retailers have generally done a good job in tightening up inventories, although not nearly enough given the stunning decreses we’ve seen lately, but customers are still going to wait them out. Retailers can try any number of different offers, but right now customers are only speaking one language: $$$.
If I were holding my breath waiting for an innovative retail marketing approach this holiday season, I’d be dead. The most successful holiday promotions here in NorCal this year are the going-out-of-bidness, wall-to-wall, everything must go, what-is-your-offer-for-these-fixtures liquidation sales by Mervyns and Linens-N-Things. Unfortunately these sales are pulling dollars away from retailers who remain open, and cannot be duplicated in the future.
Was it Einstein who said insanity was doing the same thing over and over and expecting a different result? Substitute “retail” for “insanity” and you’ve pretty much got a picture of this year’s holiday season marketing landscape. MOTS, More Of The Same.
All of these promotional concepts are good for icing on the cake, but they do little to address the key issues driving purchasing behavior: price, price, price. Retailers need to address this need for lower pricing head-on by reducing prices, and then backing this up with enhanced customer service and product availability (they need to avoid out-of-stocks at all costs on promotional items). This will get the retailer on-track to reflect the concerns of their customers and ensure that they have best positioned themselves for success in these recessionary times.
“None of the above” best sums up what I’ve seen so far for Christmas promotions. I haven’t really seen much in the way of festive or seasonal advertising and promotions yet. I’m sure that will change in the coming week or two.
The best thing for me as a consumer is usually the price point gift suggestions that typically come in a catalog. This lets me select a gift from the $20 or $25 page if that’s the range I have for that recipient. I always find these catalogs guide me very quickly to look at price ranges one or two slots higher.
It’s all about the price this year. Skittish customers who are worried about their jobs, who have watched their retirement money shrink by 40%, and who wander the grocery store in amazement ($4.99 per pound for hamburger?) will be looking for great sales. Retailers will be smart to remember that this year, it’s chic to be frugal.
I believe that many consumers are waiting for the deals that Mr. Goldberg referred to. Many will cherry pick items on Black Friday and wait for the predicted deep discounts for the bulk of their holiday shopping. Doom & Gloom predictions on the economy will make people more willing to fight the crowds and further compress the season.
Two things, very simply, from the perspective of a merchant and a consumer:
1. We are in a deflationary economic period. For retailers, this unfortunately means that prices need to come down. At least part of this is unfortunately going to come through price promotion.
2. Consumers that are still spending need a reason to do so. This means that they need direct communication with offers that will motivate them to spend when inertia will mean otherwise (i.e., not shopping).
Nice work. Very innovative and consumer friendly. However, I have to wonder how friendly these same stores are when it comes to their return and service policies.
Everyone in our industry has been aggressive with promos and sales. Retailers with strong loyalty programs should be going full tilt on the bonus points collections and I have seen some interesting points promotions this season.
Massive price reductions and front page loss leaders will get people in the door but retailers need an aggressive shielding and merch plan to capitalize on the foot traffic. One small chain that I work with decided to put hot new items at the corners of the store instead of a bulk run in the front end or back end. So far it has done a good job of spreading foot traffic throughout the stores and we’ve seen a pickup in the basket over last year. I like the promotions and deals out there, we just need to execute more creatively.
I think that the response has differed (and should differ) by type of retailer: those that are net beneficiaries of destination reduction and those that are not. For the latter, leveraging low price points to drive trips makes the most sense; for the former, where traffic is already up (grocery, mass, club), then basket-driving, in-store promotional activity around incremental purchases is more effective.
Retailers like Target are taking pains to shore up their brand-image TV advertising with a clearer value positioning. You can expect to see more “aspirational” stores following this tactic, in order to reinforce the sale pricing in their circulars. I’m not sure anyone will do this as consistently and convincingly as Walmart, however–their slogan of “Save money, live better” is clearly resonating with consumers. To Max’s point: If yesterday’s sale circulars are any indication, sale pricing is not especially unusual or compelling compared to last year.
A few of the things I’m seeing this year from the corporate retail world:
1) Corporate employees with one eye on their jobs and another eye on caller-id, hoping it isn’t human resources. Happy to survive another week. Morale is definitely not as high as in prior years.
2) More awareness of customer preferences. Less TV and radio dollars being spent.
3) Renewed focus on direct marketing
4) Grumblings from marketers about high cost of direct mail and postage
5) More interest in lowering direct marketing costs, getting higher response rates and gaining more flexibility in time and decision-making power by increasing use of digital media–e-mail, mobile and voice mail.