To deal with the sharp decline in consumer spending, apparel retailers are devising clever ways to move sale merchandise during this pivotal holiday shopping season. Arguably, the most critical period for retailers, the 4th quarter can make or break a company’s profitability targets for the year.
Consumer spending this holiday season also sets the tone for merchandising strategies in fiscal ’09. Since it’s crucial for retailers to push overstock inventory right now, they’re pulling out all the stops. While some sales strategies are tried and true (e.g., gift cards, downloadable coupons, one-day-only sales, friends-and-family discounts and ramped-up rewards programs) this season offers some newfangled techniques to get consumers’ attention. Dara Fleischer of FashionJunkie.com investigates.
Online Social Networking
US apparel brands are finally waking up to the benefits of low-cost, high-impact marketing and the viral buzz of online social networks. From setting up interactive, store-branded Facebook groups, flashy MySpace pages, viral YouTube videos and Twitter accounts, these targeted online tactics instantly help retailers attract new customers, generate site traffic and ultimately, sell more products.
For example, New York & Company, a leading specialty retailer of women’s fashion apparel and accessories, recently launched a Facebook group that incorporates videos featuring “Trendy Not Spendy” holiday looks along with celebrity stylist wardrobe tips, must-have holiday merchandise, current promotions (e.g., take 30% off every purchase on Cyber Monday) and branded “NY Style Notebook” widgets, which enable would-be shoppers to receive the latest offers directly on their desktop. Daily bulletins are also posted on their Facebook “wall,” informing fans about holiday sale stock, gift-giving selections as well as how to receive 20% off their entire purchase. The ultimate goal: to get New York & Company Facebook (group) members to spread the word about these irresistible deals and ultimately, shop in-store.
Alternative Distribution Channels: Blogger Outreach
Web-savvy fashion retailers such as Lucky Brand Jeans have begun courting influential bloggers to help boost holiday sales. The popular sportswear label recently reached out to Glam Media’s curated network of top-tier fashion bloggers (from over 700 leading women’s lifestyle websites) to write posts endorsing an exclusive Lucky Jeans holiday promotion. Each post, such as this one from Stiletto Jungle, included a blurb about the brand’s latest holiday offerings, an eye-catching image and the promo details.
To compensate for unsold Fall/Winter ’08 inventory and to make room for pre-spring shipments, luxury department stores across the country such as Saks Fifth Avenue, Barneys New York and Bergdorf Goodman are offering deeper discounts than ever before. Mind-boggling discounts of up to 70% off (amounts previously unheard of) the original ticketed price are being offered. Even off-price retailers such as Loehmann’s, DSW, T.J. Maxx and Filene’s Basement are currently offering coveted designer merchandise for up to 65% off original department store prices.
Buy One, Get One Free
According to market research firm NDP Group, since stores are already offering up to 70% off and have mounds of inventory that merchants need to clear, retailers will likely be doing more two-for-one deals this holiday season. Pear, a trendy New York-based shoe boutique, is currently offering a “buy one, get one free” footwear promotion. And Gap Inc. recently launched a buy-one-get-one 50% off sweater sale for their online shoppers.
Independent boutiques are being crushed by big budget department store promotions so they’ve been forced to come up with their own innovative ways to move sale merchandise. Owner Lydia Burd of Shop, a cult clothing and accessories boutique located in New York’s Lower East Side, started hosting weekly trunk shows, whereby designers like Siwy (founder of the cult denim label) stop by to educate customers about choosing a flattering denim fit. All the featured styles were marked down an additional 20% off exclusively for customers that night.
Jackie Atkins, owner of nearby Pear as well as Plum, a high-fashion boutique, has also tweaked her holiday shopping strategy due to the crashing economy. “I’m offering customers more specialized services such as free styling sessions to make them feel special and ultimately shop,” exclaimed Atkins. If a customer buys something that’s suggested during the styling session, they automatically receive 50% off each item. Plus, if they spend $200 at Plum, they’re also entitled to a 15% discount at Pear.
Back To Basics
Despite all the new tactics and tools available, some retailers such as The Shoe Box, a contemporary New York-based footwear boutique, use a more traditional approach to push holiday merchandise. Store manager Sean Kirsch and his staff regularly contact customers by phone and send hand-written notes informing them of special promotions and in-store events. Explains Kirsch, “We’re making a concerted effort to stay on top of customers so they come into our stores to shop. At the end of the day, communication and consistent service is what sells.”