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Feb 2, 2017

An Urgent Message for Retail

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There was one big thing missing from Holiday 2016 – a sense of urgency among consumers, and that should create a sense of urgency among retailers to take action. Such a unique holiday shopping season should be used by retail as a case study and call-to-action for change.  After all, while the season was full of success, the challenges and changes were much more prominent.

NPD’s Holiday Shopping Bag 2016 Weekly Report showed the struggle the core retail business faced this season, ultimately failing to reach Holiday 2015’s results, let alone beat them. Beyond the steep discounts challenging retailers to grow dollar sales, consumers appeared to have grown numb to the early and constant promotions. As the holiday shopping season wrapped up, NPD asked consumers if they took advantage of any of the sales offered when making a purchase for themselves or others during the holiday season – only 20 percent took advantage of sales for all of their purchases, and more than a quarter said they did not take advantage of sales at all.*

We have witnessed the demise of promotion’s reign as king of shopping influencers. For the past several years, retailers have turned to earlier and deeper holiday promotions to capture consumer attention and dollars. And, in past years, it worked – promotions prompted consumers to buy and buy more, which is what needs to happen for retail to truly benefit from their promotional efforts. This year, online retailers really turned up the heat in this battle, and it sustained a strong presence throughout the season. But this year’s efforts didn’t pay off as hoped – they didn’t create the sense of urgency we saw in the heyday of Black Friday doorbusters. Holiday shoppers now know the promotions will continue, and the products will be the same, so they are willing to wait to see if a better deal comes along. According to The NPD Group’s partner, CivicScience, as of the week before Christmas only 51 percent of consumers were done with their holiday shopping, and 8 percent hadn’t even started their holiday shopping yet.

During the holidays and throughout the year consumers want and need more than the promotional noise with which they’ve been bombarded.  Promotions aren’t dead, but they aren’t in the commanding position they once were. Retailers are now tasked to find a way to break through the noise with powerful products and experiences that make the consumer want to act, and act now! If Holiday 2016 taught us one thing, it is that retail needs to make a change and find a way to compete with all the other things that are gaining the consumer’s share of mind and wallet. Retail needs to show consumers something they don’t want to miss out on.


*Source: The NPD Group, Inc. / December 2016 Omnibus

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