While early openings may help some retailers ring up post-Turkey Day sales, what can stores do year-round to stay competitive?
A tough job market and still uncertain economy may make it difficult for retailers to capture Black Friday dollars from penny-pinching shoppers. The National Retail Federation expects retail sales to increase by only 2.8 percent this season compared to last year’s 5.2 percent growth. Retailers that cater to budget-conscious consumers stand to lose the most, Reuters reports.
The economy has seemingly remained stagnant between this and last year, so what's the reason for the predicted decline? Acosta Marketing Group, a Jacksonville, Fl.-based marketing firm, may provide a few answers. The company's recently released report, "The Why Behind the Buy," found that while shoppers' pocket books haven't improved much over the last six months, grocery prices have increased. This additional pressure on consumers' budgets is leading to reduced overall spending. Here are a few statistics from the report:
25 percent of shoppers with incomes under $45K said they'd lost their jobs, were demoted or reported some other negative job experience.
26 percent of shoppers say they're spending less on groceries this year than they did last year.
- Shoppers are prepared. Nearly 72 percent said they make lists for their shopping trips. Major decisions on what to buy have moved from in-store to at home.
To give themselves a leg up on the Black Friday competition, stores that cater to shoppers on the tightest budgets are pushing the envelope in terms of early openings. Walmart and K-Mart will stay open all day on Thanksgiving as well as many Old Navy locations. Feeling the pressure, Macy's, Kohl's and Target are all planning to open earlier than ever and will kick off Black Friday sales at midnight.
While midnight openings may help some retailers ring up post-Turkey Day sales, the Acosta report offers a few suggestions to help retailers stay competitive year round:
Become a shopping partner by providing value while also helping shoppers stretch their budgets. Natural products retailers can use end caps to highlight easy, healthy and inexpensive meal options.
Social media platforms will continue to grow in influence. Use technology to communicate value and build store loyalty. For example, Ellwood Thompson's Local Market based in Richmond, Va. offers unique product discounts to its Twitter and Facebook followers.
- Remember there are two economies, one for those who make under $50K and another for those who make more than $50K. Understand the increasing divide between low-to-middle income households and higher-income households, and what it may mean for your store. While the Mustard Seed Market and Café based in Akron, Ohio, offers several gourmet items, owner Phillip Nabors, makes it a point to direct shoppers to reasonably-priced health food products. "We have to serve all of our customers, but I regularly direct shoppers to inexpensive healthier options," he says. "We have to present solutions, not be part of the problem."