Black Friday Success – short run, long run or no run?

November 29, 2008 at 1:37 pm | Posted in Uncategorized | Leave a comment
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Black Friday 2008 has come and gone, but we are still in the throes of the big shopping weekend, as financial analysts and marketing managers across the country wait to see what kind of return on investment in advertising and promotions retailers will see. Last year, the Friday, Saturday and Sunday following Thanksgiving saw 147 million shoppers shelling out the bucks and carrying off bagsful of treasures. Data so far this year show a much lighter turnout, though we don’t know yet if it is 19 million fewer than last year, as the National Retail Federation expected. Tracy Mullin, president and CEO of the NRF, said, “This could be the most heavily promotional Black Friday in history.”

According to ShopLocal, retailers have increased their sale offers by about 21% over last year’s Black Friday sales period. JCPenney, for example, is offering 20% more specials than last year as part of its “biggest day-after-Thanksgiving sale in company history.” Forever 21 fashion retailer is hoping to draw shoppers in with a big giveaway, while playing on consumers’ patriotic sympathies with its invitation to “Join us in supporting the American auto industry! Register to win a brand new 09 Saturn Sky!” Hibbet Sports is offering the MVP Rewards Program to cheer consumers on and reward them for purchases with “points and free stuff.”

So how will everyone know if the sales and sweepstakes were successful? In the short run, we’ll soon be able to look at numbers on store traffic, sales volume, and average purchase value. In the long run, however, retailers may feel unexpected effects. Price-based marketing communications can often weaken a brand over time. But wait – aren’t the discounters supposed to be the big winners this Christmas shopping season? Ah, but WalMart and the Dollar Store and their ilk have built their brand identities around low prices. What happens when prolonged and repeated sales lead consumers to associate discounts with Macy’s or BMW? There are some ways to beat the price positioning game, as Jack Trout suggests: compare cost of purchase to cost of ownership for high performing products, or boldly take the position of “Yes, we’re more expensive, and don’t you get what you pay for?” Let the consumer decide if that’s quality or image. Tiffany’s, anyone?

So have you ventured into the retail arena in the past few days? Have you found any great promotions or great brand stories?

Online Shoppers, Your Ship(ping) Has Come In

November 17, 2008 at 9:38 pm | Posted in Uncategorized | Leave a comment
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According to the National Retail Federation, many retailers make 25 to 40% of their annual sales during the “winter holiday season,” defined as November and December. Incidentally, according to an NRF survey, last year 93% of consumers celebrated Christmas, five percent celebrated Hanukkah, and two percent celebrated Kwanzaa.

This year, the retail forecast for the season is not the sunniest – the NRF predicts a 2.2% increase over last year, which sounds like even less in the pretty wrapped boxes when you consider price increases. Online sales, which have climbed as if gravity had no hold on them in the past, are predicted to increase just 12%, their smallest jump ever, according to Forrester Research.

So how are marketers going to overcome these bleak predictions? Online retailers are going to break out a tried and true promotion offer: free shipping. Yes, 78% of online retailers intend to laugh in the face of fluctuating fuel prices, offering free shipping to deal-seeking shoppers. Amazon, Barnes & Noble, and Borders make the offer with a minimum purchase of $25, while Apple, Target, and Staples ship your $50 purchases at no additional charge. Timelines vary by retailer, but Williams-Sonoma has stated their free shipping offer, only available on select items, will continue through December 24, and Staples’ offer is good through December 26.

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How will shoppers respond to these free shipping offers this year? When the wrapping paper has been recycled and the cats have shredded the bows beyond recognition, retailers will regroup and begin to evaluate their success. Between handling exchanges and returns, that is.

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