Omni-channel · Retail · Surgical Shopping

Holiday shopping: NOW it gets interesting

Hopefully by now we all accept that Black Friday weekend performance is pretty meaningless for most retailers. And even though we are now a week past Cyber Monday, most of the action still lies in the days and weeks ahead.

Bear in mind, most retailers still have roughly 2/3 of their holiday profits to come.

If retailers performance in November tells us anything it is that retailers with winning value propositions continue to win and those that are stuck in a sea of sameness–and that have failed to invest in a compelling omni-channel experience–continue to lose share. Their only weapon remains price. Good luck with that.

In the coming days, the game of chicken that exists between consumers and retailers will begin to accelerate. Despite somewhat improving economics conditions, the majority of consumers still engage in “surgical shopping”–that is they are more focused on needs, then wants, with an intense focus on value. Most consumers understand that the deals get better as retailers get more desperate.

So despite the hype around Black Friday and Cyber Monday, there will be plenty of promotional craziness ahead and even with decent sales, profits may not be so robust.

Stay tuned.






Retail · Surgical Shopping · Uncategorized

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.


Digital · Mobile · Retail · Surgical Shopping

Holiday shopping comes early…and late…and why you shouldn’t care about Black Friday anyway

Stand by.  Here comes the onslaught of stories about Black Friday and all the related hype about the retail industry’s biggest and most important sales day!  Yawn.

In reality, this Friday isn’t the industry’s biggest sales day–the Saturday before Christmas usually is–and the importance of Black Friday as a bell weather for the holiday season is waning.  Here’s why.

First, consumers’ capacity to spend remains muted.  Retailers get this, and realize that to drive the top line they need to grab market share. This is why so many retailers jumped the gun and launched “Black Friday” promotions well before Thanksgiving.  This will pull volume forward, away from Black Friday.

Second, consumers remain “surgical” in their shopping. That is, they are primarily focused on “needs” vs. “wants” and constantly on the hunt for a great deal.   Many shoppers understand that retailers get more desperate as the season progresses and they are willing to wait out the retailer for the best price.  This “game of chicken” will move sales off of Black Friday and into the latter part of December.

Third, gift cards continue to grow in popularity.  You sell the gift card before the holidays, but the bulk of the shopping comes in January.

Lastly, and perhaps most importantly, this will be a very digital holiday.  E-commerce will grow at least 10% year over year, while many brick and mortar stores will be lucky to show even a nominal increase.   Mobile commerce will go from being a rounding error, to being a small but powerful part of the whole story.   Many retailers, including a little outfit out of Arkansas called Wal-Mart, are already offering free shipping.  And no doubt, free or low-cost expedited shipping offers will be prevalent until the final days before Christmas. Simply stated, as digital grows, the importance of Black Friday diminishes.

So this Friday the pundits will pontificate and prognosticate.  And we will enjoy endless stand-ups from outside various Best Buys and inside various malls.  It makes for good television, but not good analysis.