Good morning retail!! Welcome to Cyber Monday. Or is it still Black Friday? How about Christmas? By the middle of last week 77% of High Street retail had launched Christmas. By the week’s end, some had moved it over to make room for Black Friday alongside, while others suspended Christmas for a few days. Find this all a little confusing? Imagine how customers feel.
All this is very symptomatic of the knee-jerk, lemming-like retail market that we find ourselves in. One where only the few can set their own competitive agenda. The rest feel compelled to follow the herd because they don’t have enough confidence in their brand, and what it stands for with customers, to deliver sales revenue.
So today, most retailers will be shouting three different messages to their customers, all with fantastic offers attached to these different events. The amount spent by consumers will not be higher – in fact in my opinion it will be lower. But worse still, spend will be at lower margins. Margin dilution comes a) from lower prices which will rarely be balanced by a high enough volume increase and b) the higher stock replenishment and labour costs of generating those sales. More subtle is the message it sends consumers. Apart from the sheer confusion of it all, it is the idea that most of customers will metaphorically and literally buy the proposition of an endless stream of wonderful bargains.
When Black Friday and Cyber Monday are over, how do retailers think their customers will react to a full price Christmas offer?
** Our detailed forecasts for Christmas sales, and for 2016, are available. Get in touch for access details at firstname.lastname@example.org