Retailers should focus on converting shoppers into customers and avoid the temptation of bringing forward discounts to offset lower revenue, industry experts have said.
The comments come as major retail organisations have said the upcoming Christmas period will see less growth than usual, and that department stores such as Myer and David Jones are bringing forward Boxing Day sales in order to offset the drops.
Retail analyst Rob Lake says retailers should hold their nerve if revenue drops to lower points than normal and avoid the temptation to give in to discounts.
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“Really this is about back to basics and doing everything you can to get those sales in the door,” he says, adding there is not a lot for retailers to do but “hold their nerve”, especially if they have already booked television and press advertising.
While Lake says a number of retailers will begin discounting, most should hang on until Saturday to start their annual sales.
Chief executive of the Retail Doctor Group, Brian Walker, says retailers should focus on converting shoppers into customers by making merchandise attractive with a good sales pitch.
“Have a good hook in your shop, have well-merchandised shops and make sure all your staff have a good product knowledge of what you’re selling. That’s what you need to have a good focus on.”
“Set up the shop the night before for the day’s trade. Really just zero in and give a great product, try to get a customer’s name on a database if you can and give them some sort of invite that gets them back into the New Year and gives you a sale. The focus is on converting – remember that.”
The comments come as the Australian National Retailer’s Association reminded businesses most shoppers do their Christmas buying in the last week before Christmas. Many retailers are hoping this last-minute rush will make up for an expected drop in revenue due to what Lake calls the psychological effect of a third consecutive interest rate rise, and are giving in to the discounting temptation.
Myer chief executive Bernie Brookes told the Financial Review early this month the store’s discounting began early due to “fickle” customer spending.
“The level of discounting is a little bit deeper this year because customer confidence is not as strong as it could be and you’re having to fight for every dollar,” he said.
But Walker says customers should avoid the temptation and instead, “focus on selling and servicing as much as you can”.
“If it gets very busy, get someone on the register and devote the rest of your staff to selling. That’s what will see you through, make sure everything is set up in an attractive way and focus on that sales proposition.”