Viewpoints

All Signs Point to a Busy Bargain-Hunting Season

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This is the week retailers traditionally kick off the holiday season. For supermarkets, that means dressing themselves up with fruit baskets, wine and cheese platters, and complete turkey dinners. It seems there's always a party to cater to, a family event to serve.

Research firm IBISWorld recently predicted that supermarkets stand to benefit nicely from the holidays this year: Thanksgiving sales will grow 3% over 2008, with nearly all of it (about $28 billion) spent on food and beverages; general Christmas spending will increase marginally, 0.19%, yet spending on food and drink will grow nearly 12% over 2008, to nearly $28 billion.

The numbers reflect a continued emphasis on home and hearth, and underneath that — despite an optimistic Warren Buffett saying, “The financial panic is behind us” — it's pretty clear that consumers remain anxious over the state of the economy and the outlook for 2010. The panic may have subsided, but there's still plenty of uncertainty in the air. Wal-Mart said as much two weeks ago, when it forecast tepid earnings for the all-important fourth quarter, which revolves around holiday sales.

Such ambiguity means holiday merchandising needs to be supported by plenty of good cheer: Smart prices, strong value propositions and aggressive promotions. To get the message out, retailers can rely on traditional strategies like coupons and discounts, but they also need to ring in the new by employing modern tactics, according to some recent polls.

First, let's take a look at the time-honored coupon. They're Rudolph red-hot right now. More than 231 billion pieces of paper have flowed through the marketplace so far this year, according to NCH Marketing Services. Face values of these coupons are up, too, averaging $1.43 in Q3 vs. $1.31 a year ago.

“The significantly larger coupon booklet translates into a great savings for shoppers who have let marketers know loud and clear that they are seeking value and will spend money when given the opportunity to also save money,” said Suzie Brown, chief marketing officer of Valassis, NCH's parent.

The savings theme runs through a different study that found about 17% of holiday shoppers plan to use social media like Twitter during their forays into the stores. The Deloitte survey points out that most of this group (52%) is in the 18-29 age group, though 33% are ages 30-44, and an impressive 12% are between 45 and 60 years old.

“Retailers should consider harnessing this activity to turn browsers into buyers with one-click access to coupons, promotions and purchasing tools,” said Stacy Janiak, vice chairman and Deloitte's U.S. Retail leader, adding that 44% of shoppers polled expect to use a coupon they obtained online before hitting the stores.

These tactics aren't new to most retailers today, but it's important to understand that this is the one time of the year consumers actually feel compelled to get out and shop, to entertain and to socialize. It's that time of year to intercept them in compelling ways with a hearty greeting: There's no place like our store for the holidays.

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Contributors

David Orgel

David Orgel is executive director, content & user engagement, of Supermarket News (SN) and its website, SupermarketNews.com. Orgel delivers his opinions on industry trends through a bi-weekly...

Jon Springer

Jon Springer has been writing about food, food retailers and food retailing for more than 10 years, and is in his second tour of duty with Supermarket News. His prior experience includes covering the...
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