As the countdown continues toward the most important selling season of the year, retailers seem to be struggling to generate the 6 to 7 per cent growth predicted by retail analysts. The winners this holiday will be the innovative merchants who don't let exciting items sit hanging on racks or piled high on tables, but rather who take risks in making them visually appealing and compelling to buy, writes Stacy Baker.

As the countdown continues toward the most important selling season of the year (the last two months typically account for 25 to 40 per cent of an apparel company's annual sales), retailers struggle to generate the 6 to 7 per cent growth predicted by retail analysts.

While retailers try to predict the seemingly enigmatic spending and shopping behaviours of today's consumer, many experts agree that figuring out what people want isn't that tough. In fact, this year most agree that it comes down to just a few factors: convenience, newness and presentation.

"Convenience is gift shoppers' top priority this year," says Pam Danziger, president of Unity Marketing and author of 'Why People Buy Things They Don't Need.' "Shoppers seek special gifts that are just right for the recipient, but what they want most is to shop stores that are convenient and make their gift shopping experience quick and painless."

While 26 per cent of shoppers say they've been able to find new and interesting things to buy this year, just 6 per cent said those items were apparel, according to a recent Pulse Report, 'How America Shops.' This means that those not offering fresh product have to fake it with interesting and enticing displays, presentation, signage and more.

Even more problematic than the general lack of fresh product is the fact that there's no one hot item, says Candance Corlett, president of WSL Strategic Retail. Since the pashmina hit several years ago, no single item has rocked the fashion world for holiday.

She points to Coach, however, as one brand/retailer that's doing "an extraordinary job of giving consumers a 'wow' this season between its amazing window displays, brightly coloured merchandise and fresh new offerings." Also turning heads is Burberry, particularly with its newly launched children's line. Beyond that, Corlett believes while creativity and novelty are on consumers' wish lists, retailers haven't responded.

"Department and specialty stores are failing to romance the consumer from the windows to the dressing rooms this season," she says. "The hard reality is that shoppers have visibility to the entire world via the Internet which means it's hard to surprise them with products that are new and dynamic."

Given the lack of creativity on designers' parts and the "world is your store" shopping availability, the burden of creating romance has shifted to the realtors - it's up to them to make merchandise (whether dated or fresh) seem compelling and irresistible.

Holiday prediction: show us what's new

The retail analysts are enthusiastically predicting an increase in holiday sales of 4-7 per cent versus 2002. The big but, however, is: are there enough new and interesting things for shoppers to splurge? Click here for the "How America Shops" study from WSL Strategic Retail (pdf format)

Stack 'em high and watch them fly
"Take fragrance, a classic example, which is such a romantic-emotion category and you see department stores stack 10 high on counter - it reminds me of breakfast cereal and that mass-retail mentality of 'stack 'em high and watch them fly,'" says Corlett.

"They even use this same strategy for other expensive apparel items like cashmere sweaters which are mounded on tables and strewn on the floor. When salespeople say 'everything they have is on the floor' they mean it literally these days."

The concern is that retailers have conditioned shoppers to expect every environment to look like a mass-merchandise counter. "This holiday is unfortunately done, but I said a month ago that romance is key," she says. "The brands and retailers have done nothing different from last year."

Even with more brightly coloured apparel offerings and some interesting fashion trends, presentation seems old hat and creativity is nearly nonexistent. The winners this holiday will be the innovative merchants who don't let exciting items sit hanging on racks or piled high on tables, but rather who take risks in making them visually appealing and compelling to buy.

Presentation is key
Why is presentation so key, especially when consumers are so shopping savvy and familiar with product? Because consumers no longer buy out of need - they buy for pleasure.

"Consumer expectations have fundamentally changed and retailers haven't caught up," Danziger says. "We all have far more things than we need and we're purchasing things because we want them, rather than out of necessity."

This means that if we're spending money out of desire, we're buying out of emotional reasons or feelings and ultimately the happiness derived from acquiring a particular item.

"Retailers have always had the perspective that they're selling things: apparel, jewellery, shoes…," she says. "They line them up and present them from the viewpoint that people look at their purchases as things. But consumers aren't buying things - they're buying emotions." The thing is simply the means by which they acquire an experiential feeling.

This is especially important in the holiday season when people's expectations for an experience are heightened. Consumers want the holiday music, smells, sights, colours and more from the time they approach the store to their entire shopping experience once inside. Christmas is the ultimate expression of emotional consumerism, Danziger says.

"Retailers today have a very long way to go to bring the experiential component into shopping," she says. "We have to challenge ourselves to bring experiential component."

The good news is that once you start offering more experience, sales will continue to grow throughout the year - experiential shopping may be heightened during the holiday season but you can capture and capitalise on the concept and move its momentum into the coming year.

Retailing 21st century-style
"This is retailing in the 21st century," Danziger says. "This is why people who can afford to pay full price shop in discount stores - it's exciting. Why go to a department store if you aren't getting a thrill." It's not about the money - it feels better when you buy an expensive jacket or designer shoes for half the price. This is the concept at the heart of having a successful holiday season.

"If retailers want to get off the discount rollercoaster they need to substitute other thrills for the excitement of saving half price," she says. "Discounting is not about the money. Retailers do what they want to do, present the way they want and offer what they want but they need to turn 180 degrees and look at what the consumer wants."

Those that invest in trying to determine what consumers want and present it an exciting way can override the negative impact of lack of newness this season. Although it's difficult to change a corporate culture and tradition of business operation (besides the fact that many believe this Christmas is a done deal), retailers still have a chance to woo last-minute shoppers to break their budgets.

Danziger cites studies that ask people what they expect to spend this year. "Everyone answers from the left brain because that's the rational part of the brain, but once you get them into the store, their emotions take over," she says. "This is the big opportunity to organise your presentation and play up to consumers' right brains."

Your odds of success are heightened by talk of a growing economy, a new Medicare program and more which has people feeling better about spending money - this good feeling is what will drive spending.

Last-minute persuasion
So you've got just a couple of weeks left in this holiday season. What to do? Besides planning on making next holiday season a year-long emphasis (after all, it's a major portion of your annual sales), check out other retailers. What are they doing? How are their displays? Watch how people respond to different merchandising strategies and see what's working and what's not?

Then take that knowledge back to your own store and tweak your presentation. "Once a company has turned shopping into an experience they've got a leg up on the competition. Lack of creativity and innovation in the past should challenge retailers and designers to step up their efforts to enhance the shopping experience."

The even bigger challenge will be to not stay stagnant once you figure out the right formula of excitement and freshness in your merchandising. "You can never stop," she says. "You have to continue to reinvent yourself beyond the holiday season and always ask yourself how you can do better from day to day and season to season.

"The good news for now is that people feel much better about the economy and global affairs - they want to feel good and we have signs that positive trends are on the way." All retailers have to do is spur people's natural inclination to spend to heighten those happy feelings.

Ten retail tactics to guarantee a great holiday "gifting" season (there's still time)

  1. Enhance the "gifting" experience: The goal of gifting is to emotionally connect the giver with the recipient. The gift itself is the means to an end, and that end is an emotional connection between individuals.
  2. Know qualities shoppers want in a gift: With connecting the goal, gift-givers seek gifts that show they know the recipient. After finding the right item, they want quality and craftsmanship, uniqueness and an item that expresses individuality. Give the shopper a way to customise the gift.
  3. Make shopping convenient: Gifters won't trudge from store to store to find the perfect present. In choosing a retailer to buy gifts, they want convenience, so they go where they shop for themselves and know the layout. Retailers should compile a list of the top gift ideas for specific relations (eg husband, wife, child, co-worker) and price points (eg $25 and under; $26-$50; $51-$100; $100+) and post this prominently at the front counter, the cash registers, on the window to entice shoppers. End cap displays or tables stacked with ideas also draw crowds.
  4. Offer Gift certificates: Gift cards, rather than cash, are preferred by gifters because they show that he cares enough to have shopped. Stores that make this strategy an afterthought miss a huge opportunity to build shopper loyalty among both givers and recipients. Gift cards should connect emotionally, displaying popular licensed themes, such as Harry Potter, Lord of the Rings or SpongeBob. Generic cards aren't enticing.
  5. Think "year long:" Gift shopping doesn't take place only in the last two months of the year. Heavy gift buyers, in particular, are always grazing for new ideas. They buy and stash away gifts all year long, so make gifting and gift shopping a key retail focus throughout the year.
  6. Put people back into your store: While retailers are working to remove sales help and make the shopping experience do-it-yourself, gift shoppers value the personal touch. They want knowledgeable, well-trained sales help to guide them. Retailers who don't depersonalise shopping will be rewarded.
  7. Target the gifters' decision process: Gifters have a number of critical decision points in the gift shopping process. They must select something that the individual wants within their price range. To help, prepare your staff with a list of open-ended questions that will help shoppers discover the perfect gift. Make sure sales staff know the stock and can intelligently interview shoppers. The goal of gift retailing is to have the right item, at the right price, for the right person on the right occasion.
  8. Have brands and products people want NOW: Keep up with consumer passions and preferences in key product categories. The Internet can be an effective tool to follow the latest product fads and fancies. Be on the leading edge in your product lines and get rid of last year's merchandise, so shoppers won't see your store looking tired.
  9. Improve presentation: Presentation counts. To maximise sales of gifts, offer expert-quality gift wrap services with a number of wrapping options. Gift wrap can even become a new profit centre, if you think in terms of upscale luxury gift wrap choices. And make sure your store's name is included somewhere in the gift package, either on the box, complementary gift card or gift receipt.
  10. Position your store as a brand where gifters like to shop: Branding your store and differentiating it as a good place to shop for gifts is critical. Make gifting a key feature of your brand by enhancing the shoppers' gifting experience, eg convenient, offering novel gift ideas and presentation options. Understand that gifting is a rare opportunity for a store to touch two consumer segments: the buyer and the recipient. Make the most of that opportunity by building a loyal following among both.

Source: Pam Danziger, Unity Marketing