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Go Green – Get a REAL Christmas Tree

I have to admit it – I’ve always thought artificial Christmas trees were stupid. But I’m a man of the 21st century, and I wondered what kind of environmental impact came about through all that chopping. Well, thank you to Trucost for at least slightly absolving me of whatever guilt I feel for buying a real Christmas tree every year.

According to Trucost research, artificial Christmas trees are six to ten times more environmentally costly than real Christmas trees. But as with all statistics, there is more to the story.

One fact is that most of us real tree people end up purchasing many natural trees over our lifetimes of Christmas revelry. If someone buys an attractive, durable artificial tree, they may use the same tree over many years.

In addition, according to the research, some artificial trees come from highly efficient and better managed production plants that use recycled materials and good practices in emission and waste management. Meanwhile, tree farm operations may include harvesting with helicopters, cold storage and use of other energy consuming equipment, and they may use aggressive pest removal techniques and artificial irrigation practices depending on local weather. The species, geography, farming and cultivation methods, soil type and other variables have to be taken into account.

For me, environmental awareness isn’t enough to sacrifice the joy of picking out a real tree, and occasionally cutting one down myself. So what are our options? Well, there is the re-plantable Christmas tree, purchasing from local suppliers and buying domestic trees that come from a reputable tree farm with environmentally sound practices – these should all be high on the list.

Sorry, fake plastic trees – you’ll never get my love. And now that I know that the methods I can use to purchase my trees can actually make me greener than my know-it-all neighbor and his obsession with artificial crap, I can feel even better about buying a real tree.

8 Things You Need to Know about Mobile in Asia

8 Things You Need to Know about Mobile in Asia
(An arcane glimpse at the future for everywhere else)

Guest Blog by Claire Mula

This festive quarter, Comscore estimates 13% of all e-commerce transactions will be made via a mobile device in the US, up from 8% in Q4 2011. Globally, AIBI Research expects 1 in every 4 e-commerce dollars will be spent via mobile in five years.

How does this compare with today’s “mobile-first” markets in Asia? What should retailers and brands seeking to engage Asian consumers in the world’s fastest growing economies be aware of when it comes to developing multi-channel strategies for Asian markets?

Here are the 8 facts you should know about mobile internet in Asia Pacific:

1: The present (not future) is mobile in Asia

Asia as a region accounts for over half of the world’s mobile devices. By 2016, Asia Pacific will account for 57.7% of all mobile phone users—nearly ten times the North American share.

2: China is now the largest smartphone market in the world

China, which surpassed the US as the largest smartphone market in the world, represented 22% of global smartphone shipments, while the US (formerly the largest market) accounted for 16%, according to estimates by Canalys.

3: Asians have ‘skipped’ desktop – gone straight to mobile internet

For many populations in markets in Asia, the first time they experience the web will be via a mobile device. In 2012, mobile replaced desktop as the predominant way to access the web in Asia’s most populated markets: China and India.

4: Asia-Pacific has the highest number of mobile payments users in the world

According to Gartner, Asia has the highest number of mobile payment users in the world. This is largely dominated by SMS payment methods born from a need to transfer money via ubiquitous methods across a fragmented payment marketplace. In contrast, in Asia’s most sophisticated mobile service market, Japan, more than 10% of mobile subscribers have used a m-wallet to buy goods and services.

5: Cash is still ‘King’ in Asia

Asia is a two-level mall when it comes to payments, and the region is very fragmented in terms of providers. Markets like India, Indonesia and China are largely “unbanked”- and cash is still king. There is a movement towards mobile as a payment channel for low-transaction value goods and services (<US$10). NFC is an opportunity to make the experience more user-friendly for everyone at a store level.

6: Mobile = “extended shopping hours”

Like their Western counterparts, mobile users in Asia continue shopping after hours. Among Sprooki’s Asian-based retail clients, 15% of purchases occur outside of mall operating hours. During holiday periods such as pre-Christmas, this can be as high as 34% in some markets.

7: Mall Culture a ‘hot-bed’ for location-based marketing

Location-targeted advertising in and around malls can increase response rates of untargeted or demographically targeted ads. Among retailers and malls who use Sprooki’s location-based marketing platform, between 60% and 85% of all shopper purchases or coupon downloads are made within 500 meters radius of the mall or store, in response to a location-targeted message. Around 10%-20% buy via their mobile device from a physical store while in the mall in order to benefit from a discount or value-added offer.

8: There is no common market – but similarities exist

Like Europe, Asia is culturally, economically and socially diverse. A market-by-market approach is best. However, in terms of mobile shopping “readiness”, Asian markets can be grouped based on a few important characteristics:

  • Tier 1: “mobile shopping” markets of Singapore, Korea, Japan, Hong Kong and Taiwan, where both smartphone penetration and debit/credit card penetration is upward of 50%. In Singapore and Hong Kong, mobile comprises 23% and 41% of online commerce already.
  • Tier 2: markets such as Indonesia, the Philippines, Thailand and Vietnam, where smartphone penetration is below 50% and SMS and cash remain the predominant remittance or payment methods.
  • Asia’s largest market, China, experiences 42% smartphone penetration (and growing) -and is one of the world’s largest online commerce economies. China warrants a strategy all to itself.
  • India remains very much a feature phone market, with only 4% of total mobile users having smartphones. Irrespective, this still positions India as the fifth largest smartphone market globally – with 44 million internet-enabled mobile users.

Most markets in Asia require a “mobile-first” approach to effectively engage, win and retain local, internet-enabled consumers. For retailers, getting to market quickly and cost effectively across multiple markets at different stages of mobile evolution can be challenging and costly. Partnering with platform providers like Sprooki (www.sprooki.com) who offer customizable solutions, integrated local payment options and insights on how to engage local shoppers – when and where they shop – can help retailers reach their success metrics sooner and without the risk of over-investing.

Claire Mula is Co-founder & Managing Director of Sprooki

Mobile Analytics: The Key to Higher ROI and Engagement with Holiday Shoppers

Guest Blog by Brendan O’Kane

Could a holiday shopping season in which big retailers stay open around the clock be somewhere in our near future?

It may seem farfetched until we consider that Thanksgiving, once a day when almost all stores were closed and people stayed home with family, is in the process of becoming Black Thursday. Macy’s recently announced that, during the weekend before Christmas, it will stay open for 48 hours straight. It probably won’t be long before other leading large retailers follow suit, hoping for an even bigger slice of the year-end profit pie.

These trends line up perfectly with growing consumer spending during the holidays. During the 2010 and 2011 seasons, even with all the recession-driven belt-tightening, retail sales rose 5.5% and 4.1%, respectively. This year, they’re expected to reach a record $568.1 billion, perhaps a reflection of the fact that, as research from Experian shows, consumer optimism is at an all-time high.

With device-toting consumers already visiting both brick-and-mortar and online stores in record numbers to score the top gifts, gadgets, toys and appliances, retail marketers are scrambling to launch mobile campaigns. By December 31, 2012, they’re expected to have allocated twice as much in their budgets this year as they did last year to connect with holiday shoppers on their ubiquitous “third screens.”

Action Analytics as a Force for Greater Holiday Revenues

However, when it comes to marketing through feature phones, smartphones and tablets, some messaging campaigns aren’t having their intended effect. Why? Too often the messages are irrelevant, ill-timed or excessive – or all three. And an overload of messages that add no value to their lives simply turns most consumers off.

During the holidays and beyond, brands and retailers have the tools to boost engagement with consumers – as well as ROI – by measuring the effectiveness of their messaging.

For example: a top discount retailer with a mobile app is offering 15% off on a new line of tablets. The retailer deploys two versions of the same message to app users who fit the profile of a likely tablet buyer to see which delivers higher value:

  1. “Holiday Special 15% off on Mega Tablet 3!”

Message A had a 40% open rate and a 20% coupon click rate. For every 100,000 messages sent, 8,000 coupons were clicked.

  1. “Mega Tablet 3 Now 15% Off. Hurry, Deal Ends Soon!”

Message B had 30% open rate and a 30% coupon click rate. For every 100,000 messages sent, 9,000 coupons were clicked.

Message B yields better ROI even though it had a lower open rate, because it had a higher coupon redemption, or conversion rate (9% vs.8%). This type of message analysis, which has been used in print, television and Web campaigns for decades, is known as A/B split testing.

The process doesn’t end there, however. The retailer wants to rework its push notifications to reach particular customer segments, including those who didn’t open the push notification, SMS or mobile email message and those who did open it but failed to click on the coupon.

That’s retargeting. The retailer renews its focus on those consumers by using gathered data to make follow-on messages even more relevant and increase conversions even further. By testing message content for optimal relevance and sending only when the data says it should, the retailer can sidestep the major pitfall for companies marketing on mobile: being perceived as intrusive or spammers.

To Engage Rather than Annoy, Measure, Then Measure Again

Mobile phone spam is such an annoyance to consumers that some companies have elected to skip mobile marketing altogether. I know of one major retailer that has resisted the pressure to market on mobile. An executive told me the company’s fear of having customers see it as a spammer has kept it from taking the plunge. Luckily for this company, it still does a great business.

However, not all marketers can say that. In less than two years, mobile is expected to overtake desktop as the primary Internet access point for most consumers and to channel over half of all online revenues.

Regular measurement of mobile messaging can help brands and retailers gain actionable business intelligence by taking the pulse of their audiences. That information can be used to design thoughtful, intelligent and timely push, SMS and mobile email campaigns.

This also applies to all other times of year when retail shopping spikes, such as Mother’s Day and the late-summer “back to school” sales blitz.

The slow recovery isn’t slowing down determined mobile consumers looking for great deals. Through action analytics, retailers can find the right moment and the right messaging to drive higher ROI and customer engagement no matter what holiday it is.

Brendan O’Kane is CEO of OtherLevels, which helps mobile game developers, brands and publishers using Push Notification, SMS and Mobile Email Messaging engage, retain and maximize the value of their audiences through mobile messaging analytics and retargeting.

There is no Silver Bullet to Guarantee Online Merchandizing Success – but There are Ways to Improve Your Chances (Part One)

Guest Blog by Steven Kramer, North America President of hybris, www.hybris.com 

Matching your business’ interests with those of your online customers’ is a delicate balancing act.  On the one hand, you want the customer to find the product that they are looking for, but on the other you also want to influence their purchasing decisions based on your preferences (e.g. if a certain product has a higher margin, there are too many of a particular product in stock, it’s the end of a product line, etc.).

Successful online merchandizing is not enabled by just one tool. It is a mixture of various techniques, the data you have and, last but not least, your own gut feel.  Following are five key considerations to keep in mind when you are evaluating merchandizing tools and your efforts:

1. How good is your data?

The old saying of “garbage in equals garbage out” is as true in merchandizing as anywhere else. Does the tool you are evaluating give you the ability to:

- Effectively administrate, govern and steward the data you want to use?

- Help you to improve the overall quality of your data?

- Ensure consistency across various data outlets and not just your merchandizing tool?

- Give you the ability to define and manage the facets you will later show to your customers?

Ultimately, good data management means good navigation and effective search.

2. Do you think about going global?

Support for multi-language on the front end, as well as in the back end, will be key for a successful global roll-out.  Often tools struggle due to the additional amount of data that’s required for multi-language support.  Keep in mind that, while tools often provide the additional language packs, they come at a significant extra cost and often synonym dictionaries are not available.  Languages such as Chinese or Arabic are a no-go.

3. How complex is your pricing model?

Do you really have only one price per product, as often assumed by merchandizing tools?  If not, because of the approach that merchandizing tools take to index your data, by flattening the data structure, billions of data rows are not uncommon.  Can your tool deal with this Big Data-style situation?

4. Can you create association between products?

Certainly guided navigation and a great search can do a lot, but what’s also really powerful is establishing cross, up or accessory relations.  The set-up, management and handling of bundles is also a very powerful merchandizing mechanism that requires more than a powerful search.

5. Can you create landing pages dynamically?

Your customer searched for a specific brand.  Wouldn’t it be great to have them land on a page dedicated just to that one brand?  Alternatively, they may search for a category, for example, running shoes.  Why not have them land on a page dedicated to running, presenting shoes and additional running gear along with promotions relevant to their search?

The above are guidelines to help you in your merchandizing tool evaluation and overall online efforts.  In a follow-up post, I’ll provide five additional points to consider, focusing on relevancy, promotions, information access, cross-channel and tool integration, to help you drive success with your merchandizing initiatives.

Steven Kramer is North America President of hybris, www.hybris.com. Today’s guest blog is part one in a two part series. Part two will run in January 2013. 

It is Good to Give Gift Cards

If you haven’t seen this yet, you may want to take notice. According to GiftCard.com, not everyone sees gift cards as a lazy and thoughtless approach to gift giving. In fact, the GiftCard.com Holiday Gift Card Spending Report reveals that giving of gift cards during the holiday season is becoming more accepted and prevalent, and spending on gift cards is expected to go up this year.

Among the report’s findings:

  • 49.6% of consumers plan to purchase at least one gift card this season
  • More than 40% say they always or almost always pre-plan gift card purchases
  • Only 15.6% purchase gift cards as a last-minute option
  • Average consumer spending on gift cards is $26.40
  • Selection and personalization ranked as “very important” factors when looking for a gift card
  • 14.2% of consumers rank personalization as the most important feature for a gift card
  • 21% of consumers plan to spend more than last year on gift cards
  • Most consumers typically purchase gift cards at grocery store displays or specific stores and restaurants
  • 13.1% of consumers purchase gift cards online; 4.7% purchase from their mobile device
  • 38.5% rank gift cards as their favorite or usually favorite gift to receive

“Gift cards, for most, are an essential part of the holiday shopping season,” said David Jones, CEO of GiftCard.com. “Not only do they make excellent gifts for everyone, from the hard-to-shop-for relative to a holiday party hostess, but they save time and effort in an already busy season.”

Sure, GiftCard.com is biased when it comes to gift cards. After all, it prides itself on being the “one stop shop for everything gift card.” But that doesn’t mean GiftCard.com is wrong. Seems to us that gift cards really can be the perfect gift around the holidays.

When you can’t decide on the perfect gift for someone, one of those prepaid gift credit cards, or a gift card to a favorite store or a nice restaurant, is something that says, “Go treat yourself to something special on me.” Don’t be afraid to pull the trigger on those gift card purchases this holiday season.

Thanksgiving and Black Friday Spending Strong As Shoppers Sought Early Promotions

Guest Blog By Rikard Bandebo

Black Friday kicked off the holiday shopping season with a bang, providing many retailers with an important consumer spending boost – despite the challenges faced in the wake of Hurricane Sandy. Many merchants attracted more customers by opening their doors on Thanksgiving and expanding their shipping and layaway options to simplify shopping.

The First Data SpendTrend report is proprietary research that tracks same-store consumer spending by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks at U.S. merchant locations.  The 2012 Black Friday SpendTrend report compared Black Friday 2012 spending against 2011 numbers. Findings showed that sales were strong, with the following overall same-store retail growth rates:

  • Dollar Volume: +5.6 percent
  • Transaction: +3.6 percent
  • Average Ticket: +1.9 percent

Retailers experienced a healthy dollar volume growth (DVG) of 5.6 percent during Thanksgiving and Black Friday, compared to 6.3 percent in 2011. Seasonal merchandise discounts lured shoppers into clothing and clothing accessory merchants, who saw a DVG of more than 10 percent. General merchandise stores saw similarly positive results, with a DVG of more than 9 percent; we attribute this to the fact that many of these stores expanded their layaway options and also offered price matching.

Building materials, garden equipment and supply dealing retailers were the leading categories, with a 14 percent DVG (compared to about 8 percent in 2011). Our research shows that this channel’s strong performance results from an overall improvement in the housing market, rebuilding efforts following Hurricane Sandy, and shoppers purchasing holiday decorations.

Retailers’ healthy DVG can be traced back to the fact that consumers increased how much they were spending during each shopping trip – there was nearly a 2 percent increase in average tickets. Merchants helped drive sales and spending by decreasing their focus on clearing out inventory through lower margins. While the reduced discounting did not affect general merchandise stores’ DVG, it did result in a lower figure for furniture and home furnishing stores.

From a geographic perspective, most regions in the U.S. saw a boost in DVG. Much of the weather across the nation was crisp and clear, helping drive consumer foot traffic. The West and the Southwest led all other regions with DVGs of 7.2 percent and 6.7 percent, respectively. Spending was healthy in New England and the Middle Atlantic, with DVG of 1 percent and 4.3 percent, but they were the slowest growth regions since many consumers had reassessed their holiday budgets after having purchased generators and building supplies in the aftermath of Hurricane Sandy.

Overall, this year’s Thanksgiving and Black Friday showed impressive growth considering tough 2011 comps and that the retail DVG has been around the 3 percent range for the past few months. The holiday spending rush seems to have started off well and merchants will monitor shoppers in an effort to sustain the growth throughout the season.

Rikard Bandebo is vice president and economist at First Data. First Data SpendTrend, a macro-economic indicator, is based on aggregate same-store sales activity in the First Data Point of Sale Network. First Data SpendTrend does not represent First Data’s financial performance.

Keeping up with the Dollar Channel

Guest Blog By Pat Conroy

Driven by changing consumer preferences, the U.S. retail landscape appears to be shifting.  The market share of the grocery and mass merchandise channels, while still dominant in CPG, has eroded as market shares of dollar, club, and convenience stores increased in recent years. CPG companies looking to stay on top of these shifts should not ignore the potential for the dollar channel, especially multi-price-point dollar stores, to play a growing role in national brands’ future performance.

In a recent Deloitte survey, CPG executives acknowledged consumers’ growing affinity for today’s new and improved dollar stores, and the shift in their views on the importance of different channels over the last three years is testimony to the significance of this trend. Sixty-two percent of the CPG executive respondents expected sales at dollar channel to increase over the next three years. These executives also expected dollar stores, in the same timeframe, to increase product choice by increasing the number of SKUs (85 percent), expand their geographic presence (75 percent), allocate more shelf space to private labels (58 percent), and improve in-store product presentation through means such as lighting and in-store displays (57 percent).

Looking ahead, CPG companies seeking to capitalize on the dollar channel’s growth should consider ways to appeal to the dollar channel’s increasingly diverse customer base while guarding against channel conflict and cannibalization. Core dollar-store consumers are being joined by new dollar consumers who shop at dollar stores less out of sheer financial necessity, but because they appreciate the dollar store’s national brand offerings and the improved in-store experience. For many CPG executives, the attraction of the dollar channel’s growing customer base is mitigated by the specter of rising channel conflict with mass merchandisers and grocery stores.

Our research shows that dollar stores are an important and profitable channel for some CPG companies that have tailored their businesses to suit the channel’s distinctive nature. These CPG companies appear to have cracked the code for selling through the dollar channel in five distinct areas:

  • CPG companies begin with a channel- and often retailer-specific approach to brand, product strategy, and innovation.
  • They pursue tailored merchandising and assortment strategies for the dollar channel at the store level.
  • Their pricing and trade promotion strategy acknowledges the potential for channel conflict by providing unique product-price value propositions in each channel.
  • They partner with dollar retailers to adapt their supply chain, distribution, and operations to the dollar channel’s unique logistics and warehousing environment.
  • CPG companies serious about succeeding in the dollar channel create channel focus by resourcing dollar stores with strong account and support teams that include marketing, product packaging, and supply chain expertise.

One would think that the dollar channel should be an important and strategic channel for most national brands, yet 42 percent of the consumer product executives surveyed do not view the dollar stores as a strategic channel. The CPG executives surveyed and interviewed seem, albeit gradually, to be coming to grips with this new reality.

Pat Conroy is vice chairman and U.S. Consumer Products leader at Deloitte LLP, a national practice that provides audit, tax, financial advisory and consulting services to consumer product manufacturers.  The national Consumer Products practice comprises more than 2,400 professionals, and is one of the largest industry practices at Deloitte.  Pat has more than 20 years of experience leading both domestic and international consulting engagements within the consumer products industry.  He has been a long-time advisor to many of the consumer packaged goods (CPG) industry’s leading chief executive officers and senior executives. His experiences range from strategic business planning to detailed implementation of operations and technology initiatives.

As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

LEARNING TO LOVE SHOWROOMERS

Retail showroomers aren’t all cherry-picking deal-hounds– they’re potentially your best customers. Here’s how to leverage the tools of loyalty management to win them over.

Guest Blog By Rick Ferguson and Bill Hanifin

Before the advent of mobile devices, shoppers had to take pricing promises on faith. Today, it takes 30 seconds on an iPhone to figure out that the 52-inch flatscreen TV in your store is 14 percent cheaper online. As smart phone penetration increases, consumers are relying ever more on mobile devices to navigate their lives, and they will only grow more adept at finding the lowest price online.

Showrooming — the use of mobile devices while in a store to find and buy a product at a lower price online — has sparked a retail war. On one side we find the big-box retailers, who have become the global poster children for those afflicted with terminal showroom-itis; on the other side we find online retailers, the go-to villains for those looking for a scapegoat to blame for their sliding sales and disengaged shoppers. And in the middle of the war we find consumers themselves, who are guilty only of pursuing their own self-interests.

However, as we’ve seen from the recording industry, which responded to a permanent change in consumer behavior wrought by disruptive technology by declaring war on its own customers, fighting showroomers will not win the battle against showrooming. It will only serve to alienate retailers’ customer bases.

So how can brick-and-mortar retailers keep their sales in store? One way is by embracing showroomers by leveraging the tools of loyalty management. A recent study conducted by Aimia reveals a great deal of information about retail showroomers that hasn’t been reported in the press — particularly in regard to their attitudes and opinions about brand loyalty and reward programs. We learned that showrooming behavior indexes higher among younger consumers — three-quarters of US showroomers come from the Millennial generation. And Millennials also over-index on loyalty programs: 77 percent of Millennial consumers claim participation in loyalty and reward programs.

And as all veteran car salespeople know, a customer doesn’t come onto the lot unless he’s ready to buy. So how can retailers deploy the tools of loyalty management to convert showroomers into paying customers?

  • Use hard benefits to reward desired behavior: The value of hard benefit rewards such as loyalty currency lies in the currency’s function as a lever to influence customer behavior. When you find a showroomer looking up the price of that 52-inch flat screen, invite him to join your reward program—perhaps with a rich bonus offer on his first purchase. The cost of the bonus points is far less than the gross margin contribution you’re losing on showroomed products.
  • Link soft benefits to upper-tier smart phone users: By lavishing showroomers with exclusive access and experiential rewards based on customer data, you’ll enjoy the opportunity to provide a truly unique customer service experience.
  • Steal the online thunder: Offer your own showrooming app that combines price transparency with product reviews. An app that is available only to your loyalty program members ensures that every action conducted through it results in proprietary data that goes to you – which is far more valuable than a lost sale.
  • Deploy an aggressive partner strategy: Work with and share opt-in data with partners and suppliers to combat showrooming together. By offering exclusive products, you’ll draw more people to your store to buy, which benefits retailers and suppliers.

Retailers have an unparalleled opportunity to adopt current technology to create new value propositions that reward customers for physical visits, promote personal service, and deliver both relevance and value. Success will require you to embrace this technology, rather than abdicate to your online competitors.  So when you wake up in the middle of the night in a cold sweat, worried about showrooming, take heart—the tools to build profitable relationships with showroomers are already at your disposal.

Bill Hanifin is Consulting Practice Leader for Aimia, while Rick Ferguson is Aimia’s Vice President of Knowledge Development (www.aimia.com).

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at eric.slack@phoenixmediacorp.com.

Waiting for Great Deals, Celebrating at Home: Holiday Outlook 2012

Guest Blog by Thom Blischok

The 2012 holiday season is going to be one of change. The old pattern of rushing out for the impulse buy is giving way to a growing trend of patient, cautious shopping, with more options for getting great deals enabled by technology, according to a recent Booz & Company 1,600-person survey.

The one constant in 2012 is the “lens of affordability.” Every shopper Booz & Co. talked to or surveyed indicated that his or her buying decisions will be determined by affordability. Shoppers will be buying gifts they need more than gifts they want. Across income levels, shoppers say that their 2012 holiday spending will be almost the same as last year’s: between $675 and $725 per family. The historical precedent of a huge gift haul is transitioning to a smaller – yet more meaningful – gift-giving experience. At the same time, holiday celebrations are “in” this year, as the uncertainty of today’s economy continues in the minds and wallets of the 2012 holiday shopper.

Here are three key trends to watch from Booz & Co.’s holiday 2012 research:

  1. The search for deals will drive purchase behaviors. Seventy-three percent of all shoppers expect to find great deals this holiday season – an 18 percent increase over 2011. Almost 25 million shoppers will wait until Christmas Eve to fill their shopping carts, a number also up from last year. Retailers already are beginning the “deal dance” with consumers as they position themselves with great offers. Shoppers will let their keyboards do the walking to find these deals, using smartphones to snap pictures in stores and then going online to compare prices and find the best one. This “showrooming” trend will lead to future holiday seasons that are driven by global price and value transparency.
  2. Shoppers will be planning more holiday celebrations. Sixty-one percent of shoppers are planning a holiday celebration as a way to give thanks for living through a very tough economic period (up 12 percent from last year). Almost 53 percent of shoppers report that they are planning more than one celebration this year, a 17 percent increase over 2011. All families who responded, regardless of income, want to celebrate as affordably as possible – and making a fine dinner is at the top of their holiday list. There will also be significant entertaining; consumers are seeking intriguing hors d’oeuvres, snacks and treats to feature at holiday festivities. To tap into this, retailers must become creative in offering the tastes, smells and delights of the holiday season. They can help home cooks create innovative, large family meals with interesting new side dishes and desserts as well as labor-saving ideas, such as ready-washed and precut meal assembly ingredients.
  3. Gift-giving will be reshaped by affordability, “light” indulgences, and family categories. Seventy-six percent of shoppers indicate that they will “pause before purchase” to ensure they make the right gift decision. Impulse purchases appear to be on the decline as shoppers stretch every holiday dollar. However, 52 percent of shoppers plan to splurge a little with a luxury gift that their budget can handle. For some it will be that special handbag, for others a home appliance, and for others a true holiday meal celebration. Re-gifting will also be on the rise this season: Presenting last year’s gifts with a little value-add (like a small accessory) will become a gift-giving strategy embraced by 32 percent of American shoppers. Expect categories such as home entertainment, basic apparel, exotic kitchen appliances (like next-generation coffeemakers and food processors), smartphones and tablets, interactive toys and downloadable gifts like e-books to top wish lists.

It would be fair to say that the 2012 holiday season will be one of careful and controlled spending, lots of celebrations for surviving another economically tough year and purchases that are determined largely by the search for the deal.

Thom Blischok is the chief retail strategist and a senior executive advisor at Booz & Co. For more information, visit www.booz.com.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.

Five Lessons Learned for Increasing Holiday Sales This Year

Guest Blog by Shelley E. Kohan

Many of us have been retailers for a long time. Once upon a time, we wrote sales checks (yes, with a pen) and calculated labor hours using manual time sheets. But what has always set us apart has been our unique, innate ability for instinct and intuition. We have remained in the business successfully by making decisions based on our experiences in the field.

We are retail warriors. Occasionally, we will back up our decisions with data. Having jumped on the technology bandwagon for the past decade, I am surprised to find that what we know and what we do about it may sometimes be very different. A case in point is the following post-2011 holiday analysis, which reveals some staggering insights from retail warriors across the United States.

As we enter the 2012 holiday season, here are some insights to help deploy your resources more effectively for increased sales to drive this year’s performance. After analyzing more than 40 U.S. retail store chains’ performance and examining the in-store behaviors of more than 20 million shoppers between Thanksgiving weekend and Dec. 31, 2011, here’s what we found:

1.     Don’t Underestimate First Weekends in November.

Retailers are missing early season traffic by not having enough staff the first two weekends in November. Many retailers extend their existing staff first before hiring new associates, or new hires start but do not hit the selling floor until the third week of November. Hired, trained sales associates need to be on the floor and ready to sell by the first Saturday of November.

2.     The Post-Christmas Sale Is No Joke.

The time after the Christmas holiday remains a great opportunity for most retailers. Shoppers continues to hit the stores only to find the holiday help is gone! Obviously, conversion drops due to returns, making it difficult to maximize sales and service. However, the store traffic still represent a “selling opportunity” − especially with the escalating trend of gift cards as holiday gifts.

Am I crazy to suggest one and two above? Do I get that payrolls are tight and stores simply cannot add expense? (Of course I do, I’m a retail warrior.) In-store analytics extract the details from the data and provide you with the knowledge to maximize the nuggets of information you discover. Simply adding staff will not give you a full return on investment for the suggestions above. Instead, do the following:

3.     Shift Staffing Hours.

Move hours out of the middle of the week when most retailers are over-staffed. Also, hire in shifts or increments to accommodate the high weekend traffic in November. By looking at the by-hour and by-day traffic-to-conversion comparison, there will be opportunities to shift staffing to when you need it most.

4.     Treat Dec. 26 Like Black Friday. 

Most retailers experience similar traffic on Dec. 26 as they do on Black Friday. Make it all-hands-on-deck. (We think we do, but it’s worth double-checking staff hours for this day.)

5.     The New Year’s Eve Holiday is Marketing’s Best-Kept Secret.

Shoppers are still out in the stores and want to shop. Give them incentives to buy! Create events in the store to drive traffic and conversion.

The overwhelming majority of holiday buying still occurs in brick-and-mortar stores – 95.5 percent of it, according to the U.S. Department of Commerce. To all the retail warriors out there, let’s decide to make it an even bigger 2012 – armed with our killer instincts and the supporting data.

Shelley E. Kohan is vice president of retail consulting at RetailNext and has more than 20 years of experience in the retail industry, focused on luxury brands within the department and specialty store sector. She also is an instructor at the Fashion Institute of Technology of the State University of New York in the fashion merchandising management program. She can be reached at shelley@bviretailnext.com.

Retail Merchandiser magazine is pleased to present the points of view of many different industry stakeholders. If you would like to contribute your own guest blog to our site, please contact the editor at russ.gager@phoenixmediacorp.com.