Bob Phibbs, president and CEO, The Retail Doctor and a RetailWire BrainTrust panelist, has published a white paper predicting that the general news media will yet again forecast a depressing Black Friday and holiday retail sales declines next week as they have for the past 10 years - even when there were positive increases. The report also details the retail risks of such early doom-and-gloom thinking.
In his report,
Mr. Phibbs chronicles how inaccurate past reporting from prestigious
news organizations has been. Some of these headlines include:
- The New York Times, 2001: Desperation Sales Fail To Lure Shoppers (2001 Holiday Sales Increase = +3.4 percent)
- CNN Money, 2004: Holiday Weekend a Turkey for Stores (2004 Holiday Sales Increase = +6 percent)
- The Wall Street Journal, 2007: Data Point To Weak Holiday Sales (2007 Holiday Sales Increase = +2.2 percent)
"This annual merry-go-round of doom and gloom spin is all about selling news and earning retail industry experts and officials airtime for their own ego and profit," said Mr. Phibbs in a statement. "It doesn't sell merchandise nor does it encourage optimism by retailers and consumers alike. Instead, it creates a "waiting for the next shoe to drop" mentality to set in among consumers (who hold back their wallets to wait for deeply discounted bargains) and retailers (especially the small and independent ones) who hold back their buying, expect the worst and cut prices - thus limiting their profit potential during the important holiday season."
Regarding price-cutting, Mr. Phibbs provides a historical lesson from The Great Depression on how slashing prices added to the frenzy and lowered the quality of goods and services. It ultimately hurt retailers' sales, their reputations and did nothing to fuel an economic recovery.
Mr. Phibbs also provides positive reports from credible sources about this holiday season that predict an increase over the dismal sales of 2008. The reports are supported by tracking of decreasing inventories and overhead cost cutting adjustments over the past year that negate the need for heavy discounting.
Mr. Phibbs' advice to retailers ranges from turning off all electronic news media to optimizing retail staffs to engage customers beyond their expectations.
"This is your moment to grab market share and make an impression that your customers will remember forever," said Mr. Phibbs. "Consumers have low expectations and your competitors are cutting everything to the bone. The opportunity to over deliver a positive memory of all of your measurable and intangible brand touch points has never been greater, and optimum execution will build customer loyalty for years to come."
Discussion Questions: Has the news media been overly pessimistic in predicting holiday retail sales over the years or is it simply reporting what industry sources say will happen? Do you think this year's reporting has been sensationalistic or representative of the common wisdom? What repercussions does reporting have on business?