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October 2007

Every year early in the fall, the National Retail Federation (NRF) releases its prediction for holiday sales. This year NRF believes consumer spending will increase by a tepid 4%. The International Council of Shopping Centers (ICSC) predicts an increase of 2% for same store sales, and consultants Deloitte & Touche believe it will be a 4.5% increase. Each year these predictions get widespread media coverage. I've long wondered if the various articles in the media influence consumer spending during the season.

While most retailers may be a little nervous about holiday 2007, those in consumer electronics anticipate a robust shopping season. With the continuing price drop of flat screen TVs, a whole crop of newly released video games, and the growing popularity of iPhones and other feature-packed telephones, electronic products will be prominent on many gift lists.

Another group of retailers likely to have a good holiday season are those selling luxury goods. Such companies as Neiman Marcus, Nordstrom, and Coach have seen healthy sales increases throughout the year, and I don't see any reason why that won't continue.

THE EXTENDED HOLIDAY SHOPPING SEASON
"Black Friday" has long been considered the official start to the holiday shopping season, but for some it starts as early as August. The number of early shoppers is growing as is attested by a recent NRF study. Nearly 40% of consumers surveyed planned to make holiday gift purchases well before Halloween. Although some consumers complain about stores displaying Christmas merchandise earlier every year, turns out it's just good business.

While pre-season shoppers may be an important consideration for holiday success, so too are gift cards being used well into January. According to another NRF survey, more than half the consumers responding said they want to receive a gift card this year. By one estimate, gift-card purchases will exceed $35 billion, an increase of nearly 40% over last year.

CLOUDS OVER HOLIDAY SHOPPING
With the probability of lackluster consumer spending this year, retailers have responded with conservative inventory investments. If sales don't take off fairly quickly, we could witness even more aggressive pricing than we've seen in recent years. I know that doesn't seem possible, but it could happen.

Another factor that will affect some retailers this year is a shortage of several popular toys. With extra testing and recalls of products imported from China, consumers will be looking for toys assured to be lead-free. Owing to cautious importers and toy companies, it will be more important than ever to encourage shoppers to buy the toys they want as early as possible.

THE 2007 HOLIDAY OPPORTUNITY
In the first few weeks of the new year, we all will be looking at the numbers hoping retailers had a great 2007. As happens every year there will be winners and losers. The losers will complain that consumers didn't turn out because of one thing or another--lousy weather, high gas prices, or the housing slump caused consumers to be cautious. Whatever. At the same time, there will be those who hit or even exceed their projections. The difference is the way retailers execute in their stores, how their customers are served, and the attitude of everyone.

I've found that retailers who enjoy healthy sales increases during the holidays take steps to make the shopping experience truly special for their customers. They decorate to create a holiday wonderland. They know that teaching associates to be patient with customers, to smile, and make customers feel good about shopping in the store results in increased sales.

I visited a store of one national chain last year and noticed very few holiday decorations, uninspired music, and dreary associates. When the holidays were over, the company reported a decrease in same-store sales. Wake up!

In my view, the attitude among associates along with the overall look, feel, and tempo of the store are critical during these important weeks--more so than any other time of the year. Don't believe the so-called experts. Go out and make this holiday shopping season a winner for your stores.

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JORDAN'S "MONSTER DEAL"
Boston's Jordan's Furniture ran a promotion promising any customer who bought a mattress, dining table, sofa, or bed from one of its stores at the beginning of the baseball season--from March 7 through April 16, 2007--would get their purchase price back if the Boston Red Sox won the World Series. On Sunday, the Red Sox did exactly that sweeping the Colorado Rockies in four games.

Although Jordan's didn't invent this kind of promotion, it did a magnificent job making the most of this event and expects to provide refunds for as many as 30,000 customers. With the promotion insured for $20 million, it looks like the Red Sox weren't the only winners. Both Jordan's and its customers won big, too.

WHO DO YOU TRUST?
Retailers and consumer products manufacturers continue to spend hundreds of millions of dollars every year on marketing. According to the most recent Nielsen Internet Survey, consumers have become increasingly distrustful of those marketing messages.

Based on web survey responses from more than 26,000 consumers around the world, 78% place their highest level of trust in what they hear about stores and products from their friends, relatives, and other consumers. The simple fact is consumers continue to trust word-of-mouth advertising over all other forms of marketing. As we've long known, negative word-of-mouth is deadly with reports of bad experiences outweighing good ones by an estimated 5 to 1.

THE FIRES BURNED!
We've had a very tough time here in San Diego County over the last week. As is common this time of year, winds shifted from west to east and combined with very dry conditions fueled wildfires throughout the area. This year, there were as many as seven fires burning at one time resulting in the evacuation of more than 500,000 people and the destruction of as many as 1,400 homes.

Many retailers were forced to close their doors for several days due to road closures and the inability for themselves and their employees to get to work as they dealt with fire-related problems and took care of their families. When the retail numbers are tallied at the end of the month, San Diego retailers certainly will have suffered.

Most remarkable to me is the cooperation and generosity of so many who came together and helped the thousands of displaced San Diegans during this tragedy. Qualcomm Stadium, where our NFL team plays, and the San Diego fairgrounds among other places were used to temporarily house people, pets, and even livestock. It was inspiring to see both local and national companies as well as individual citizens quickly swing into action supplying food, water, medical supplies, and other needed items for the evacuees--truly a community effort.

As this is written, the fires are nearly under control thanks to the heroic work of fire fighters who battled the blazes for days on end with very little rest. Many people now have been able to return home. Others must deal with the devastation of lost loved ones and homes that burned to the ground. My heart goes out to them.

Until next month...

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Speeches and Seminars for Retailers

As one of the nation's best-known and most popular retail speakers, George's speaking schedule includes events for retailers and consumer products manufacturers all across the country. He's added some exciting new convention and trade show topics. If you are a meeting planner or are involved with speaker selection and would like to book George for your next convention, we encourage you to call as early as possible. George's calendar fills up quickly.

Topics for conventions and trade shows:
(Click on a topic for details)

Retail Success! Increase Sales, Maximize Profits, and Wow Your Customers in the Most Competitive Marketplace in History

Into the Future! Powerful Trends Shaping the Future of Retailing

Stop, Look, Touch, and Buy: The Dynamics of Merchandising

12 Powerful Advertising Secrets Every Retailer Should Know

Power, Punch & Pizzazz! Create Advertising that Grabs Customer Attention and Sells More Merchandise

Customer-Direct Marketing: Increase Retail Sales with High-Impact Direct Mail & E-Mail

Double Your Sales and Triple Your Profits with High-Impact Marketing and Promotions!

Competition? What Competition! Standing Out in Today's Competitive Retail Marketplace

How to Find an Eagle in a Flock of Turkeys! Finding, Hiring, and Keeping the BEST Retail Employees

Every Customer Every Day!

For more information go to our web site or call 800-766-1908.

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Seminars and Training Programs for Managers and Associates

Delivering performance-enhancing speeches and seminars for retailers since 1987, George jam-packs his presentations with practical, real-world information. His seminars for managers and associates teach store management skills, customer service improvement, and sales techniques. If you want to improve store productivity and profitability, we encourage you to call George Whalin. Don't wait, his calendar fills up quickly.

Topics for managers' meetings and corporate conferences:
(Click on a topic for details)

Great Store Managers Make Great Stores!

How to Find an Eagle in a Flock of Turkeys! Finding, Hiring, and Keeping the BEST Retail Employees

Customer Focused Selling

Every Customer Every Day!

For more information go to our web site or call 800-766-1908.

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Resources for Retailers

George Whalin's book RETAIL SUCCESS! is now in its ninth printing. A number of consumer products manufacturers have purchased the book for their retailer customers. Retailers have provided copies for their managers who regularly refer to portions of the book in their managers' meetings. And managers are referring to the book in their daily store meetings. If you haven't purchased a copy yet, what are you waiting for? For multiple copies, call us for volume pricing. For individual copies, there are also some very good deals to be had at amazon.

Go to our web site today where you'll find several other books in addition to RETAIL SUCCESS that George recommends. Check it out often, he keeps adding to the list.

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If you have an opinion or thoughts about any of the topics posted, I invite you to comment at retailerblog.com It's easy to do. And if you have a topic you would like to see addressed on the blog, send me an e-mail at george@whalinonretail.com.

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In addition to speeches and seminars, George also consults with retailers helping them improve the operation of their businesses. His consulting services include helping retailers with strategic planning issues, marketplace positioning, merchandising and store layouts, developing results-driven marketing and advertising programs, personnel management, and improving store performance. If you need solid, practical, proven insights and ideas to grow and improve your business, call us toll-free at (800) 766-1908.

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We encourage you to pass this publication along to your associates and colleagues. If all or any portion of this newsletter is reproduced in another publication, attribution should read as follows: Copyright 2007. Reprinted with permission from George Whalin's Retail Management E-Letter. To occasionally reprint portions of this newsletter one time, no express permission is required. To reprint in more than one venue or multiple articles, please contact us at 800-766-1908 or info@whalinonretail.com.

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