It's beginning to look a lot like Christmas... But what have we done?
Carnage in the Farmer’s toy aisle on the One Day Sale 25% off toys, Thursday 4 December
If like me you watched the Black Friday madness weave its wicked way from the US through the UK and down to our shores, I hope you appreciated the comedic crazy behaviour and carry on. It was reminiscent of what we experienced in Australia many years ago when we started Boxing Day Sales with ridiculously priced whiteware, TVs and deep cut discounts across department stores. In fact us Aussies were comparatively well behaved on those occasions.
Here in New Zealand, Harvey Norman gave Black Friday a good crack and had a stellar day by all accounts, possibly rivalling traditional Boxing Day sales figures. The Warehouse kicked off their Red Friday initiative (nice what you did there TWL) and more than 100 retailers joined Click Monday this year, offering more than 1200 discounts online for a 24-hour sale. In its second year of running, reports of driving 5- fold increase on YOY retail sales swirl mysteriously waiting to be confirmed.
But now the online traffic jams have petered away, the store shelves restored to order, staff have recovered and the high-fives at the sales generated have stopped, it’s time to ask questions. Questions such as ‘Have we created a world of utter madness eroding the value of our business, our wares and our ownliness?’
I am truly, deeply concerned that all retailers have achieved is to bring sales forward, reduce gross margins and erode their customer’s willingness to pay full price ever again before Christmas. In fact just ever again. Ever.
Now as a case in point, let’s analyse my own shopping, 85% completed so far.
I am on track this year to buy NOTHING at full price. Never, ever, zippo, zilch. Not a chance I will pay full price for ANYTHING.
Heck the other day I even returned something to Farmers as their discount had trumped a discount on something I had bought the prior week. The staff member offered to scan it at the new price for me but I was a step ahead of her (shopping is my life’s work after all) and had already rebought the product at the new price a day earlier. To my delight and dismay the special 25% off Toys has continued on well past the One Day Sale last Thursday.
The letterboxes are full of mailers. In my mail box on Tuesday 9 December were 20 mailers. Last Tuesday it was 28, and yes I pour all over them; planning where I’ll seek out the remaining gifts on my list, constantly on a journey to buy at the best price. Would you like that delivered free? Thanks very much. Shoppers aren’t stupid, they are cunning and unpredictable.
The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo 7, Big Bucket Deals and Harvey Norman had 3 mailers
This level of discounting activity is surely unsustainable for retailers. Outside of them all getting in a room and agreeing “next year we are going to start driving some value back into our offer so let’s all stop driving the prices as low as we can go” there are a few options.
Option one, RRPs are inflated so they can be reasonably discounted. But shoppers aren’t stupid and readily accessible online overseas retailers will bite you in the arse.
Second option, you start building value back into your brand beyond price.
Third option? You die a death of a thousand cuts as your margin gets eroded away and you are wiped into retail extinction.
Early indications are that holiday shopping is off to a slow start according to Paymark data. Capturing about 75% of card transactions through eftpos, they reported that the first week of December was $1.14 billion, up 4.9% on the same week last year. But it couldn’t compare with the 8.6% increase for the same week last year compared to 2012. And it’s also shy of the 10-month average according to Paymark’s spokesperson Mark Spicer, of 6.9%.
So have retailers panicked too early because of a mild winter and cool start to summer? Or have retailers created an industry of discount and can’t get off the merry-go-round. Are they out of tricks?
An entire mall filled with discounts
Ooh, I might need some new shoes for Xmas parties – 30% off at Witchery
All of a sudden that second option looks appealing. Can you build some emotional connection and value back into your brand?
I might be going out on a limb here but I think there is something to learn from the UK retailers who create brilliant productions around their brand at Christmas.
Looking at what The Warehouse and even New World have done, they have embraced this thinking and made it their own.
The Warehouse have used wee kiddies as the focus of their gift-giving campaign and who knew that Santa hangs out moonlighting at the local New World? A bit of fun and emotion whilst still pushing on market leading prices by both retailers who are using different channels and messages to cover their bases and rebuild value beyond price back into their offer.
New World Christmas TVCs
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But the masters are the Brits. I’ve picked a couple of my favourites to demonstrate what good looks like. If Monty or the Boots TVCs don’t bring a tear to your eye or at least a lump in your throat, please check your pulse as your heart may have stopped beating.
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Boo hoo this is one of my absolute favourites this year! The bestest surprise ever. Wouldn’t you shop at Boots too? Making Christmas happen. Magical.
Sainsbury Christmas TVC
A mini movie based on the battlefields of WW1 in 1914. My son has told me this story before as the two enemies, British and German soldiers, put their differences aside to celebrate Christmas together and even have a game of football.
John Lewis Christmas TVC #MontyThePenguin
One of my two favourites, this follows a little boy on the search to cheer up his best mate, Monty the Penguin. A tear jerk ending which would have me shopping at John Lewis daily. I read you can get your photo taken in store with Monty in his Antarctic den. Simply adorable.
TopShop Festive Season Cara Delevingne
What a glittery fun campaign. I’d go to TopShop just in the hope that some of Cara Delevingne’s spirit and cool style rubbed off on me. When were The Cars this edgy?
I know there are some doubting Thomas’s among you saying “that’s all well and good retail lady but we have sales to deliver”.
It will take a brave, brave retailer to stop the madness, to change the formula and break away from the herd.
Thumbs up to the brave, forward looking among you. And for the rest of you, when the tills have stopped ringing on Christmas Eve or after the Boxing Day Sales and the New Year Sale, take a look in the mirror and reflect on the insanity that went before.
Have yourselves a merry Christmas. I look forward to sharing more retail ramblings, rants and genius in 2015.
PS. If you managed to get to the Farmer’s Santa Parade you couldn’t get away from the retail support out in droves. My kids wondered what the heck Mitre 10 had to do with Christmas –my kids think maybe Santa gets his tools from there to make the toys but then were slightly crushed to see that Santa shops at Farmers when they thought he operated out of the North pole. I kindly explained with the population explosion and the need for Santa to reduce his carbon-foot print that he needed all the help he could get. Best I could do!