Can you feel it in the air? That brisk breath of air may not be the weather; instead it’s the sharp inhale as retailers who have spent as much as nine months preparing for the holidays step back, square their shoulders, and prepare to face what Holiday 2009 may bring.
Every product you see, ad you read, sale you line up for was carefully orchestrated last spring when retailers (and brands who sell into retail) made their call on Christmas. Those decisions came during perhaps the darkest hours of the macro-economic news fest, coming off one of the toughest holiday seasons on record.
Imagine being the buyer who had to commit to inventory, pricing and terms? It must have felt more like prognostication than retail merchandising. I have been asked a lot lately to make my own call on the holiday season. It’s easy to predict the worse.
Who’d blame any forecaster for Jacob Marley-esque warnings of impending doom. Indeed, with news of early discounting, (Walmart and Amazon already cutting prices on electronics, software and Easy Bake ovens) and pre-Thanksgiving price wars, it would be smart for the futurist to predict 2009 will fall short.
I’m calling it a different way. Those retailers back in March an April had to make decisions based on what they knew: Consumer confidence was low; economic pressures were up; and despite the halo of a ground-breaking presidential election, most consumers were preparing for the worst. Those merchants built their programs anticipating a tough 2009, and they are coming into the season with price points, offering and inventories designed to earn shoppers, even though they may not be pre-disposed not to shop.
Most merchants will have planned inventories down; most will be hitting new, lower price points with their ads. No wonder this year’s hottest toy is an electronic hamster (the hottest ticket out there, called a ZhuZhu Pet) whose $9 price point is as diminutive as its name. Holiday 2009 will be about transactions, not average ticket as stores compete for shopper share.
Like Christmas’ past, there will be aggressive discounting; but this year, those markdowns are built into planned inventory designed to stage down as the season develops. “Christmas-present” will feature more calculated, predicted promotions than any season in recent memory.
Even if total sales fall short, retailer profits should hold steady; and any uptick in shopper confidence could turn this season into a highly profitable holiday shopping fest.
Ok, so I took a risk, placed my bet on an optimistic Holiday 2009. Retailers, I wish you luck.
Now all I have to do is locate one of those robot hamsters…
