Even in the best of times, everyone knows that retailing is a tough business. But the seesaw effect of this past holiday season was enough to cause daily heartburn. As if six fewer shopping days weren't frustrating enough, there was the season's peek-a-boo sales pattern. For many, Thanksgiving week was good. Then sales died running up to Christmas, and then boomed the week after.
Shifts in spending were equally dramatic. The boom in gift certificate cards, for example, was rivaled only by the significant increase in online shopping.
What the evidence points out is this: The way American consumers now shop for the holidays has changed fundamentally. And with that change goes the last vestige of 20th century retailing theory.
Let's look more closely at what shoppers did last Christmas. They chose to shop early (6 a.m. on the Friday after Thanksgiving), and after the Christmas deadline. They did so because they knew that's when they would get the best deals. They were willing to get up before the crack of dawn to be the first in line to buy a $19.99 television set or an $89.99 DVD player.
They also bought gift-certificate cards because it was easier, and because recipients could then choose exactly what they wanted — and get much more for their dollars after Christmas than before.
They shopped online not only because it was convenient, but also because, often, they did not have to pay sales tax. And, if they were really smart shoppers, they didn't have to pay for shipping.
The bottom-line lesson from this Christmas past: Consumers shopped exactly as they do the rest of the year. No more holiday panic. No more impulse buys.
And that makes sense. At a time when consumers increasingly feel they've seen it all, have it all, or don't want it all, it shouldn't be surprising that they were willing to wait for the best deal. Consumers no longer cared whether the gift was under the tree on Dec. 25 or Dec. 28.
Shoppers today are looking for more than great prices and convenient access to products, brands and services. Those are only entry-level requirements against which today's shopper grades a retailer. Consumers can buy whatever they want at the price they want, at a wide variety of different stores. Thus, getting them to shop, to shop early and to shop with some degree of loyalty requires much more than the practical, the functional or the expected.
In our 2002 How America Shops Macro Trends study, titled The Overstuffed Consumer — Before & After, shoppers told us that their favorite shopping places were those that provided an emotional connection beyond the practical. mind you. Their favorite venues were those that combined the functional attributes of cleanliness and convenience with the emotional attributes of “a good place to spend time browsing.”
These were places where they were willing to spend some of their precious time because there was a sense of adventure (the thrill of the hunt), newness and innovation.
After half a decade of frenzied shopping, Americans have run out of things to buy. Still, they will eagerly try a new store or a new format in the hope of finding that something different, something intriguing, something worth spending their money on. But in today's copycat, cost-cutting retail climate that's not so easy. Until there is some emotionally compelling product or experience to motivate them otherwise, consumers will shop exactly as they did at Christmas. The paradigm has shifted, and for retailers that don't get it, next Christmas (and maybe the next decade) is a very scary thought.
Wendy Liebmann is founder and president of WSL Strategic Retail, a New York-based marketing and retailing consultancy.