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EditorsJan 03, 2012
Holiday 2011’s new recipe for success
This 10X blog entry was written by Marshal Cohen, chief industry analyst, The NPD Group, Inc. This year’s recipe for retail success came in the expert blending of the following four parts (not all parts are equal). Part 1 -...
This 10X blog entry was written by Marshal Cohen, chief industry analyst, The NPD Group, Inc.
This year’s recipe for retail success came in the expert blending of the following four parts (not all parts are equal).
Part 1 - Sizzle to fizzle
This is the period of holiday selling through November up to and including the Black Friday/Cyber Monday time period. This year, this time period started out with a bang. For next year’s recipe we need to keep the fireworks sizzling … instead of fizzling…
Part 2 - Lull-or-buy?
This is that post-Thanksgiving lull… the two weeks after the Black Friday Frenzy.
The lull this year was a bit deeper this year than last as consumers were ‘tapped out,’ due their having spent their cash and credit limits (self-imposed or otherwise).
What was the source of all that spending? According to NPD’s Anatomy of Black Friday and Cyber Monday 2011 study, it was ‘self-gifting.’ Forty-six percent of consumers bought items for themselves on Black Friday, which was up 12 percent from last year.
Part 3 - Bunch ‘o crunch-time
‘Crunch-time’ for holiday retail is the ten days before Christmas. This year the Christmas Crunch was on par with last year’s. As consumers got focused on gifting, their spending remained steady. But it was not over the top like we saw in ‘part one’ of this season. This is the part of the retail season that is ‘the make-or- break’ period for revenue. Will stores get all the sales growth the wished for? Maybe. But we have only seen moderate growth so far for this time period.
Part 4 - Leftovers?
The day after Christmas is all about the leftovers …the leftover business retailers can get post-holiday, that is. Now, this truly is the make-or-break part for profits.
How much inventory is left to sell-off and at deep discounts will help to determine just how profitable the holiday will be.
And now what…?
The 2011 holiday season was marked by the beginning of several "new traditions." Things like: extended and earlier hours, self-gifting consumption, the "pre-searcher’s" use of online and e-commerce for holiday shopping, a value-centric consumer, and the tapped out consumer. And lest we forget…give them a deal and they will shop…no deal in there they will shop elsewhere.
For 2012 it will be the progressive retailers and brands who will learn from this
holiday and make use of these new traditions, building on them throughout 2012.
About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 2,000 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, entertainment, fashion, food, home and office, sports, technology, toys, video games, and wireless. For more information, contact us, visit http://www.npd.com/, or follow us Twitter at https://twitter.com/npdgroup.
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