Observations in Retail – Holiday Edition

It’s been difficult to get into the holiday spirit with the unseasonably warm weather most of the country has seen. Yet, as we made our way through the Thanksgiving weekend, the traditional start to the holiday shopping season, several retailers have shown that they aren’t going to let these tough economic times affect their creativity or dampen their results. Here some observations about the holiday selling season thus far that offer valuable lessons for retailers:

Macy’s and JC Penney take a Cause Marketing Approach

Macy’s is running a campaign called “A Million Reasons to Believe” that all marketers should check out. This is a cause marketing effort that brings together a lot of tactics including social media, gift ideas, social responsibility and a fun online experience. They have also done a good job of tying their online and offline experience together. Check it out if you haven’t at http://social.macys.com/believe2009/. JC Penney has also gone down this path with their “Angel Giving Tree.” While I didn’t think it was executed online as well as the Macy’s program, they also deserve credit for a great campaign.

OfficeMax “Secret Deals”

OfficeMax (in full disclosure a client of ours) did a great job of leveraging the Thanksgiving weekend for future benefit. Like every other retailer, they ran with specific offers on Black Friday and Cyber Monday. However, they also had an additional section of deals that required an e-mail address in order to see. While this is by no means a new idea, being this deliberate about acquiring new e-mail addresses is something more retailers should do, especially when many of the products they are selling during these days are at razor thin margins.

Cyber Monday becomes Cyber Week

Many retailers have tried to extend the Cyber Monday “holiday” beyond just a single day. Both Best Buy and Wal-Mart are running with Cyber Week and Amazon has been running some category specific promotions with the theme of 18 Days of Deals. While I applaud retailers for trying to drive additional sales, I hope these efforts don’t dilute Cyber Monday.

Group Gifting

With the growth and proliferation of Facebook and other social media sites this year, I am surprised I haven’t seen more social or “group” gifting. Best Buy does this with their “PitchIn Card”, which is essentially a reloadable gift card, but I haven’t seen this anywhere else. My prediction is that both social media sites and gift cards will expand into this opportunity in the future.

Sears.com Navigation Toolbar

Leave it to Sears to bring something new to the world of site design and usability. If you didn’t notice they added a “toolbar” along the left hand side of their site much like Facebook does along the bottom of theirs. While it’s not holiday specific (they rolled it out in time for the holidays), it’s interesting because a) it takes a lot of the basic site features (e.g. My Account) and pulls it off the page into a logical place, opening up site real estate for more merchandising/marketing opportunities; and b) it’s continuing to push Web site experience down the path of acting more like software.

The American Eagle Ultimate Look Book

Here is another concept that isn’t completely new or novel, but it provides a great user experience. American Eagle Outfitters launched the Ultimate Look Book which allows users to shop by outfit just by looking at a model. It’s kind of like flipping through a magazine and is obviously perfect for the apparel category. Check it out if you haven’t: http://www.ae.com/web/giftguide/index.jsp?icid=ggHP:GiftGuide#/2.

Where has all the advertising gone?

I don’t have a lot of hard data on this but it seems to me that both eBay and Amazon have cut way back on their advertising this year (excluding the Kindle advertisements). It’s possible they are waiting until later in the season but I just haven’t seen that much compared to last year when they were on the TV a ton. Wal-Mart, on the other hand, has been running a variety of TV spots that are 100% focused on their site. It will be interesting to see if this changes as we finish the year.

The word of the season: Discounts!

Just about every retailer has gotten aggressive on discounting. This is not surprising as everyone is trying to overcome the poor economic conditions. What has surprised me is some of the “Luxury” brands that typically have not discounted for fear of diminishing their brand, have been…some even aggressively. Cole Haan, Tiffany, Bloomingdales and Niemen Marcus to name a few have run with “lower price” themes or been giving coupons with percent or dollars off. Just yesterday, I received a percent off coupon from Coach as a “preferred” customer. You can certainly expect this trend to continue through the end of the year.

As you can see, there are definitely some great ideas, as well as marketing tactics, that retailers are using to drive sales this year. But perhaps the best thing thus far has been the sale results. Online sales results through the holiday season have been very positive. Through the first 22 days of November, comScore reported online sales were up 2.2% compared to last year (and that’s after being down for the first 10 months of the year). On Cyber Monday Coremetrics said that as of 1 p.m., sales for the day were up 19.6% over a year ago. Offline sales have been mixed. The NRF reported an increase in shoppers but a decrease in average spend causing a slight decrease over last year (which would be in line with their original holiday forecast of a 1% decline). ShopperTrak however, reported that their survey of sales results for Friday and Saturday showed an increase of 0.9%. Hopefully this news is a light at the end of a very long tunnel.

Pat Duncan is an Associate Partner in Rosetta’s Consumer Products & Retail vertical

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