Retail’s holiday “game of chicken”

By most accounts the holiday shopping season got off to a solid start with strong late November sales and a record Cyber Monday.  Though given the historically high level of discounting and rampant free shipping it was likely “profitless prosperity.” But why worry about little details such as actually making money.

So now, with only 18 days of shopping left before Christmas, the real fun begins. And so does the game of chicken between consumers and retailers.

Despite feeling a bit more optimistic, all but the wealthiest consumers are facing a pretty uninspiring economic outlook.  And study after study shows that consumers are still engaged primarily in “surgical shopping”–emphasizing needs over wants and remaining keenly focused on getting a great deal. Retailers, by turn, are hoping to not only drive strong same store sales, but improve their gross margin performance. And here we have our stand-off.

The reality for most consumers is that they are unwilling to pull the trigger unless they see obvious value.  The reality for retailers is they are unlikely to cede market share or risk getting stuck with large markdowns.

So let the game of chicken begin.  My bet is that the retailers blink first.

 

One thought on “Retail’s holiday “game of chicken”

  1. “Right Fit” is the key to success these Holidays. there’s real money to be made if you can figure it out. “Right Fit” varies by shopper according to what their passions are. It’s bigger than needs and wants. Shoppers are asking more questions of themselves, retailers, and brands, before they make the purchase decision. It has to be the right fit or they will pass it by regardless of whether it’s on sale or not.

    How we treat them and their decision process needs to be carefully thought through in terms of what they need from us and when, in order to purchase the right brand/product. We should be offering Right Fit answers and solutions, not just the one size fits all lowering of prices.

    As a tactic using QRC’s to link to comparison data and real time value offers – maybe a bundle if the purchase happens now – has to be a powerful tool for retailers and brands in making sure the purchase happens “right here and now” rather than somewhere else and later.

    My bet is that some brands and retailers have this in place already – and maybe for them the shopper blinks first…

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