The Final Four: Trends to Look For in the Last Four Months of Retail
The last—and for retailers, most important—four months of the year are upon us. As the economy struggles to gain some forward momentum, the retail world is working hard to make the most of the holiday season. While we can be fairly certain that this year’s sales will exceed last year’s, that’s not much of a goal.
According to SymphonyIRI Group in its latest Times & Trends, here are some things keeping CEOs awake nights:
- Cross-channel shopping is at an all-time high with three-fourths of shoppers visiting five or more channels for CPG needs
- Trips overall are down, and basket size has dropped in grocery and mass
- Drug and dollar basket size is up
- Much of this is the result of deep-discounting and the lack of a strong differentiator
- Special-purpose trips are down overall
- People are shopping less frequently, and buying less for each trip
- Convenience and small fill-in trips are driving share gains
Bottom line: the shopper has changed, in some cases significantly. She plans more, shops less, is more likely to forgo luxuries, and is always on the lookout for a better deal. Contrast that behavior with a couple of years ago when shoppers could be counted on to shop on a whim and were open to impulse purchases.
A recent article in Advertising Age laments the arrival of the standard back-to-school marketing programs in stores, and how there seems to be nothing new under the sun.
The upshot of all this: the shopper has changed but the retailer has not. The shopper is better equipped than ever to find the best prices, if that is what she wants. Retailers seem only to respond with a race to the bottom to see who can lose the most on the important items for back to school. This will be repeated for Halloween and throughout the holidays. Turkeys will be given away with abandon, and at least one retailer has gotten into the Way-Back Machine and reintroduced trading stamps and cookware giveaways.
It seems that the more sophisticated and informed shoppers become, the more entrenched and “old school” retailers get. They don’t know how to respond to the needs of this “new” shopper, so they bank on tactics from ten or 30 years ago. Some of these might even work but mostly for the wrong reasons. As shoppers become more comfortable with online and mobile going into the critical holiday weeks, retailers need to be stepping up to meet them halfway or more through solid added value and a willingness to listen—and respond—to her needs.
“Lowest prices” and gimmicky promotions aren’t going to build long-term loyalty. The final four months of 2010 will leave more than a few retailers in the dust. The question is who will be left standing, and who will be in the ditch?
