Make It Happen! Keep Your Holiday Shoppers Coming Back
Colin Shaw
LinkedIn 'Top Voice' & influencer Customer Experience & Marketing | Financial Times Award Leading Consultancy 4 Straight Years | Host of 'The Intuitive Customer' in Top 2% | Best-selling Author x 7 | Conference Speaker
It’s mid-November, and that means retailers’ annual holiday promotions are reaching a fever pitch.
Discount department store Kohl’s will kick off Black Friday at 5 p.m. on Thanksgiving day. It plans to encourage spending by offering deep discounts and making it easier for shoppers to see how much they’ll save. Sears, Kmart, Best Buy and Amazon have all also launched aggressive price-cutting campaigns.
I like a good deal as much as anyone, but as a customer experience consultant I’ve always thought these frenzied holiday sales were penny wise and pound foolish. Retailers drop their prices to bring more shoppers into their stores. And while the strategy can work in the short term, it’s no way to generate loyal customers in the long run.
I’m happy to see that some retailers seem to be pursuing customer experience initiatives this year that go beyond traditional price slashing. Walmart is throwing holiday parties in its stores on three different dates. It has beefed up the number of sales associates, who will be decked in holiday attire. Target has put sales personnel in select departments, and it is debuting eight new store brands.
The Problem with Price Slashing
Retailers like Walmart are realizing that you can only get so far by cutting prices. Low prices bring in bargain hunters. These are the folks who will leave the Thanksgiving table early to stand in line for three hours to snag a big discount on a TV. They don’t care whether they buy the TV at Walmart or Best Buy or someplace else. They care that it’s cheap.
To rope in these shoppers, retailers have to compete with each other on price, leading to a race to the bottom. But this strategy does nothing to build customer loyalty. Shoppers will happily make their next purchases somewhere else, if it means they can save money. This means that retailers who sell lots of products at a loss during the holiday haven’t built any value or customer goodwill for the coming year.
Struggling department store chain Macy’s, for example, is constantly running discounts. But it turns out that just 10 percent of its shoppers account for half of its sales! It is responding this holiday season by rolling out a new rewards program that aims to give these loyal shoppers special benefits and perks.
Why It’s Better to Focus on Experience
Walmart still focuses on low prices (it wouldn’t be Walmart otherwise!), but it is increasingly paying attention to the customer’s experience. The holiday parties in its supercenters are part of this, including toy demos, shopping assistance and visits with Santa. Walmart’s ‘Rock this Christmas’ campaign will also increase the assortment of items for sale, offer exclusive gifts, and pepper its stores with festively attired ‘holiday helpers’.
Potentially, then, a trip to Walmart on a party day becomes something more than a race to get the last of the video game consoles on sale. Families can go and check out the new toys together. The kids can talk to Santa and the adults can get help with their shopping lists. This makes for a memorable day, and positive memories build loyalty and long-term value. If it’s done right, Walmart’s holiday initiatives could lead to increased business all year long.
The same is true at Target, which stands to benefit from more sales personnel on the floor to ask questions and help shoppers choose products. This kind of personal touch gives customers a reason to come into the store instead of shopping online.
By contrast, when a company focuses primarily on discounts, it often neglects the experience a customer has in the store. Stores are crowded with merchandise, there are few sales associates on the floor, and lines can be absurdly long. Customers might get extra discounts at the cash register, but they feel frustration, confusion and other negative emotions along the way. These emotions far outweigh the rational rewards of a bargain when it comes to building (or destroying) loyalty and value.
The last time I shopped a big holiday sale, I stood in line for 45 minutes. I vowed never to do it again. However, if big retailers start to change the way they deliver the holiday shopping experience, they might just win me back!
Are holiday sales worth it? Tell me what you think in the comments box below.
Find out more about how to keep your customers coming back, not just for the bargains! Read my latest book The Intuitive Customer: 7 imperatives for moving your customer experience to the next level, co-authored with Professor Ryan Hamilton, to discover how.
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Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.
Follow Colin Shaw on Twitter @ColinShaw_CX
WAREHOUSE, DC SUPPLY CHAIN HEADACHES. I will help cut through issues. Warehouse/DC Design, Employee productivity, Customer Service. Training.
6 年12 MONTHS A YEAR???? THEN YOUR MARKUP IS FAR TO HIGH !!!!!!!
Owner/Founder Swimwear & Fitness yoga wear/bikini/swimsuit/ Manufacturer/Supplier(OEM/ODM)
6 年we are Swimwear and yoge wear manufacturer，www.0086swimwear.com
Driving to the mall is time consuming and costly; shop online instead. We are the mall of all malls with 400+ stores.
7 年Consumers are becoming more conditioned to getting sales all the time including earlier than previous years. This makes it harder for businesses to compete, because their is always that one business that will undercut their own potential profit on an item or multiple items. This is what is known in retail as "a loss leader." An example would be Company A sells an item for their wholesale cost instead of marking it up some for a profit whereas Company B sells it for a small percentage above what they paid for it (which is the norm for most businesses) and Company C then reduces their cost to be lower than company B, but only by a few dollars or perhaps the same price, but with free shipping if you spend X number of dollars on an order. When they reduce their price they are still higher than Company A (which is normal competition). There has always been competition about price of an item from store to store. However, when the price is set too low to profit (like Company A in this example) no one can afford to sell that product and it stops being sold anywhere. This causes the consumer and the retailer to loose out. The consumer looses out because they cannot get that item anymore and the retailer looses out because there is no money to be made on that product. Retailers betting on a "loss leader" driving traffic to a store (online or brick and mortar) is always a gamble. The retailer is betting on that someone will either buy the no profit product and other items to make up for it or simply skip that no profit product because they see something better. Loss leaders are bad for business and since businesses are in business to be profitable this concept makes no sense to follow. What retailers should be doing instead is focusing on how their store looks (online or brick and mortar), making policies clear to consumers and having a great reputation for service and selection of products. In the long run that is how a successful business is run. Some consumers will only buy the cheapest products, but most will be willing to pay a little more for better service and selection. The Mall of the Internet, focuses on selection (of brands and stores and products) rather than being the cheapest. Sure we offer sales and we might have the lowest price from time to time, but we believe service and selection are more important to most consumers so that is our focus. By focusing on service, appearance and selection (when done right) you will get repeat customers who will not only shop with you, but tell their friends to shop there too!
Design Professional - Making dreams come true, one space at a time
7 年Great read, Walmart and Target have long been the retailers to watch for ingenuity and style great concept for both this year. Personally, I think that the strategy of PC Richards is the one to follow. Spend Thanksgiving with your family, (which by the way is where you should be) the sales for them will start sooner and last longer. This makes your shopping more enjoyable and not so crazed and allows you a day to enjoy ... back to tradition! Now let's talk Department stores. The real reason they are chasing online shopping is because they are targeting the wrong merchandise. What I mean here is most people buy for current need seasonally they are not looking to buy for weather we are not having. That said don't bring seasonal merchandise in 3 months early and expect to sell it as full price. All of these POS incentives are wiping profit away with deep discounts in the end to clear unsold goods for the next seasonal display. As for the in store experience, you need a special person to deal with the many personalities of the retail shoppers... a knowledgeable and pleasant person, Someone who pays attention to detail will keep you coming back. Train your employees, don't just hire anyone and throw them in to the water to swim.
Director of VIP Programing/ Tour Management- Chicago The Band. Co-Founder of Big & Little Events. Special Olympics Coach. Rotary District 7210 Governor Nominee
7 年All for getting consumers back into the stores, I just wish it allowed for more time to spend with family and friends on thanksgiving. Its getting earlier and earlier each year. But Go Kohl’s!