4 Ways Retailers Are Preparing for the Holiday Season
There are high hopes that this holiday season will be a fruitful one for retailers. Thanks to lower gas prices and favorable employment numbers, retailers expect consumers to loosen their purse strings.
Based on the Black Friday weekend, that certainly seems to be the case. CNBC reported that sales “for the five-day period starting on Thanksgiving totaled $11.11 billion, 2.4% more than the expected $10.85 billion and 17% more than last year.”
Even with a successful season so far, retailers are still trying to optimize their physical and digital strategies. Here are four ways retailers are preparing for the holiday season:
The importance of tech-enabled retail solidifies each year. While brick and mortar sales on Black Friday fell from $11.6 billion in 2014 to $10.4 billion in 2014, total online sales on Cyber Monday rose 16% from last year to $3.07 billion.
Many innovative retailers have long-embraced technology within their brick and mortar shops, making for a holistic experience. Retailers already know that consumers pull out their smartphones to see if they can find a better deal online. Rather than fighting that behavior, many retailers have embraced it and offer discounts for downloading and using the store’s app or opening a new online account.
Recent trends suggestion online shopping isn’t making in-store purchasing extinct. Holly Rome, Director of National Retail Leasing at JLL, recently explained, “We find that internet users are picking up their purchases in-store to save on shipping charges and get their goods faster, while brick-and-mortar shoppers are using online platforms to research a product before they shop.”
The strategy of in-store experiences
In a recent interview, Anjee Solanki, national director of retail services USA for Colliers International, explained: “Creating an in-store experience will also be important [this holiday season]. Consumers have time during the holiday, and creating a sense of discovery will keep them in the store longer, hopefully spending. I’ve also heard within the industry that the earlier a retailer informs the customer about upcoming specials, the less they spend in high-cost advertising the days before.”
This is part of a broader trend of retailers becoming more strategic about locations and formats of stores, often downsizing to maximize use per square foot and stores only in high performing locations. Retailers like Abercrombie & Fitch, Aeropostale, and Barnes & Noble are closing stores throughout the United States.
Foregoing the sales altogether
Some brands are defying traditional logic and foregoing some tried-and-true holiday retail strategies. REI, for example, opted to close all of their stores on Black Friday and encouraged customers to “opt out” of the holiday and spend the day outside. All 143 stores were closed and digital sales were suspended for the day. The response was so overwhelmingly positive that an incredible 1.4 million people participated in the event and “opted outside.”
While the opt out campaign may have seemed like just a marketing play, there may have been an underlying effort to diffuse sales throughout the entire (longer) holiday season. Matt Kates of HelloWorld recently commented, “Though Black Friday is a tremendous sales opportunity, it also creates the risk of concentrating a retailer’s consumer purchases on the most competitive day of the year. By opting out of Black Friday and using its resistance to reinforce its brand positioning, REI has created consumer awareness of not just its name, but its ethos, and expanded consumer engagement throughout the holiday shopping season.” While the strategy is certainly not for every retailer and every brand, it is certainly an interesting tactic.
Using the calendar to their advantage
One of the reasons REI may have opted for 2015 to diffuse sales is because this year simply has a longer period to shop. Not only are there 29 days between Thanksgiving and Christmas — two more than last year — but most retailers expect after-holiday sales will be boosted by the fact that the day after Christmas is a Saturday. According to a survey by JLL, 71.2% of retailers said that having the Sunday after Christmas to shop would help sales.