As Christmas looms, retailers face the tricky task of using Sales to lure shoppers while trying to maximise festive spending.
The past few weeks have seen a flurry of activity from large high street retailers as they squeeze every penny out of the run-up to Christmas. Debenhams, Dorothy Perkins and House of Fraser hosted two- or three-day Sales in the last fortnight of November, while Coast, Whistles and New Look were among the retailers that have distributed discount vouchers via email. Gap’s emailed vouchers made the BBC News after they were doctored and disseminated by a prankster who doubled the 30% discount to 60% and extended the expiry date until the New Year.
Pippa Maddison, a retail analyst at monitoring group Compability, says: “It’s hard for retailers not to lose their nerve with the weather, general trading and fears about the economy all affecting sales.”
But there is method in the madness. November is commonly viewed as a ‘safe’ month for smash-and-grab Sales. In recent years the run-up to Christmas has felt like a war of attrition between consumers waiting for the Sale and retailers determined not to give them one. Who will break rank first? Discounting in December is seen as a sign of weakness. In November, it is a pragmatic means of driving footfall outside of the peak selling time.
Pali International analyst Nick Bubb believes the recent wave of pre-Christmas mini-Sales is nothing to panic about. “It’s no worse than last year,” he says. “You usually see these stunts around the end of November, and anything after that is not planned. Retailers don’t want to leave it too late – they want to sell full price through December. Look at what the big boys are doing. Marks & Spencer and Next are doing nothing.”
Although an email-driven Sale event could potentially be organised within a week, Sales events are routinely planned six to 12 months in advance. The large chains create strategies based on the previous year’s trading, the activity of their competitors, the quirks of the calendar (when Easter falls, for example), and on their own policy about selling at full price (do they want a shorter Sale this season?).
One department store source says that mega Sale days have to be planned well in advance to enable merchandisers to plan stock intake. Another department store director points to concerns over staffing levels. And if TV advertising is booked, there is little possibility of changing the Sale dates.