Seasonal is Sensational, But You Have to Work at It
By Faye Brookman, special to GMDC
According to GMDC’s Seasonal Best Practices study published last spring, seasonal has been sensational for many retailers, and current shopping trends suggest now is a time to cultivate seasonal sales even further.
But seasonal isn’t easy. A few years ago some retailers had some difficulties picking hot versus not so hot seasonal items and became cautious in selecting new items, in particularly in the cosmetics department.
This year, apparently retailers have a good handle on what shoppers want. The current holiday season is a perfect example. For the past three years, electronics have been at the top of shoppers’ wish lists. Smart general merchandise retailers seized upon that idea this year. ShopRite, for example, offered a 19-inch TV for $89.00 during the early holiday season. CVS had a DVD portable player for $19.95. Retailers promoting seasonal merchandise got the items out early and stacked them in highly visible locales. Retailers said these have tactics helped make the seasonal category productive.
What is also important to note is that Black Friday is playing less of a role in Christmas sales. Many consumers wait until later – often the Saturday before the holiday. That bodes well especially for food and drug stores that can nab those last minute purchases, especially with items such as fragrances. This year, for example, most mass retailers are privy to the hugely popular celebrity scents such as JLo and Britney Spears.
The National Retail Federation predicts holiday shopping this year will total $457.4 million, a five percent increase over last year. But seasonal isn’t only about the Christmas holiday. According to GMDC’s Seasonal Merchandising study, many other seasons are emerging as having big impacts on retail sales. The study listed over 50 other holidays/events that are important and seasonal in nature.
Discussion Questions: What makes seasonal merchandising
tick? Is it important to be bold, take risks and lead consumers into new areas?
Is it important to develop a year-around seasonal program, not only to take
advantage of expanded selling opportunities, but also to reduce dependency on
Christmas selling? How can stores leverage shopping frequency/convenience strategies
to grab last minute seasonal purchases?
There are 2 types of seasonal merchandise. The examples used in the summary (TVs and CD players) aren’t “seasonally implicit.” They can be sold all year round, if the price is right. A plastic Christmas tree and Easter bunny candy are “seasonally implicit.” They have no value when the holiday ends. The markdown liability is for the “seasonally implicit.”
Many retailers have swing spaces for seasonal items. The same space is used for Christmas, Valentine’s Day, Easter, Memorial Day (summer picnic and bar-b-que), etc. Regardless of whether the item is seasonally implicit or not, it’s more constructive if it’s related to the store’s core assortment. A conventional supermarket selling TVs isn’t reinforcing its market positioning. Anything food-related would be a stronger statement.
“Taking advantage of footsteps” has never been a sustainable business model. Without fail, this leads to assortment expansion beyond the space in which the customer grants the retailer legitimacy.
Supermarkets have legitimacy grants around food. Shoppers are willing to buy most items related to the consumption of food. They are not willing to buy most items related to the preparation of food. A strategically sound seasonal merchandising effort would revolve around those product categories the store has legitimacy in. The consumer will be less price sensitive, have a higher predisposition to buy, and may even percieve the store as a destination source for those items.
Supermarkets have very little legitimacy around most general merchandise categories. Consequently, the “success” stories usually involve commoditized items driven by price and convenience — essentially, footsteps. The trouble with footstep driven assortments is that the buying behavior is essentially “place of last resort” choice. Successful merchandise for this consumer revolves around “easy” choices: popular trends, evergreen categories, and low personal involvement.
DVD players, 19″ TVs’ and their ilk are addictive, and like most addictive substances, come with a significant cost.
Seasonal selling goes on all year. It’s just a lot stronger around Christmas. Sounds like the question is, how do we get shoppers to back off of Christmas and spread out the spending all year long? Kind of the way states have spread out the distribution of Food Stamps so grocers are so packed at the first of the month. Well, we can control Food Stamp distribution. But Christmas is always going to be on December 25th and I doubt we will get that changed anytime soon. I think we are just going to have to deal with it like we have for the past 2000 years.
Mark Lilien is right at pointing out distinct seasonal products, from ones that can be sold all year.
For me, I find normal promotions during the year to be ho-hum most of the time. Most retailers and their suppliers are predictable. Most products are put on sale at generally the same discount and frequency intervals.
At Sears, the same men’s button shirts, pants and shoes seem to go on sale about 1 week per month at around 30% off each time (+/- 5%). If I miss it, who cares? I’ll buy it next month. Making the decision even easier for me is that most popular brands are covered in the same promotion.
Same goes for food, especially since there’s so many retailers it’s bound to be on sale somewhere. In Canada, the old Bay “scratch & sniff” deal got discontinued I believe due to the predictability of the deal. People waited for it every month. I was one of them.
I’ve found the deals that do drive me to shop more (online or at a brick and mortar), are the flashy 1-2 day sales. And the big boys aren’t afraid to spend cash on newspaper inserts to promote it. As a tech lover, the deals over the past year are great, and most online carry over to their actual stores too. The ads feature great deals on an assortment of products at unpredictable times of the year. Could be a weekend sale, a 12 hour sale, 48 hour sale etc…. I see more of these “out of the blue” deals for grocery and drug too lately. Even better is that the promotion usually accompanies the weekly flyer too.
The thing that seems key here is to create a niche that adds value for core consumers – consumers that are at least receptive to your brand. Hallmark did this with their summertime sale of Hallmark Christmas ornaments.
Starting in 1973, they launched the Christmas ornament line, and asked permission of customers that bought the first ones to notify them next year about the new ornament releases. In 1999 Hallmark made $100 million in summertime sales on the Christmas ornaments line without doing any advertising.
Not every retailer can do this for every holiday, but most should think about some variety of branded merchandise / permission marketing offer associated with the core offerings for which most people shop their stores. And as Hallmark demonstrated, you can have Christmas in July (time-shift a seasonal market to a different season).
This is so much more effective than opportunistic electronics end-caps in grocery stores. Sure you’ll get some sales, but you’re in a race to the bottom with every other similar store – and there’s always the chance that the commodity merchandise that worked last year (like portable DVD players) will bomb this year because of a new offering.
The value of engaging customers and respecting their focus can’t be overestimated. I originally heard this story from a Seth Godin Google presentation. He’s got a lot of great stuff out on the web (video, audio, print). I highly recommend browsing his blog:
http://sethgodin.typepad.com/.