Successful retailers have revealed their best Christmas sales strategies, after the Australian Retailers Association painted a gloomy picture for the industry with its latest predictions.
The ARA says retailers aren’t counting on any Christmas joy to save the year, with $39.5 billion projected in sales from mid November to December 24; only 2.2% higher than last year’s figure.
The projection is in stark contrast to the Commonwealth Bank Business Sales Indicator, released last week, which reveals October was the best month for retailers in 25 months.
But ARA executive director Russell Zimmerman says sales for key industry categories, which rely on discretionary income, are predicted to fall from last Christmas.
“ARA predictions indicate apparel and footwear sales could slump down 1.9% lower than last year’s festive trading period,” Zimmerman says.
“Conversely household [1.5%], food [3.4%] and other retailing [4.2%] are all set for a boost compared to last year.”
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“[This indicates] shoppers will more likely opt to spruce up the house and put on a family feast rather than put any more presents under the tree.”
Zimmerman says industry categories that traditionally rely on Christmas as their biggest trade period should brace themselves for the same disappointing conditions of the last 18 months.
“Retailers who are usually optimistic about the festive period fear sales will be worse than last year, with over 60% expecting fewer sales,” he says.
“Fifty-four percent are putting goods on sale in the lead-up to Christmas, and 74% said shoppers are looking for low prices rather than customer service or convenience.”
In contrast to the doom and gloom projected by the ARA, retailers appear to be upbeat about Christmas, outlining key elements of their sales strategies:
Apparel and footwear
Michael Fox, co-founder of online shoe retailer Shoes of Prey, says the business recorded its best ever sales week last week, contradicting the ARA’s projections about footwear.
“Sales are ramping up nicely for us. We launched 3D shoe design two weeks ago, so we’re actively innovating and improving what we’re doing with our products,” Fox says.
“The other key [strategy] for us is that in December last year, we did twice as many sales as November last year. We sold the same number of shoes but far more gift certificates.”
“The retail space is changing so rapidly and if bricks-and-mortar retailers aren’t offering their retailers anything different, it will be harder for them to keep going.”
Kelly Baker, founder of Edible Blooms, which designs food-filled bouquets, says food retail is experiencing a better upswing than retail overall.
“In the last three years, we’ve had a minimum of 30% year on year growth, which is against the industry trend. Most retailers are seeing a negative trend in growth,” she says.
“Christmas is our busiest trading period of the year – it’s a really busy time and we plan all year for it. We’re anticipating our best ever Christmas.”
Baker says the key to sparking sales is focusing on old-fashioned values, namely outstanding service, in addition to product innovation, particularly Christmas-themed products.
“Our admin and marketing teams become a Christmas call centre. They know the products so well, so we don’t bring in casual staff. It’s all about redistributing our team,” Baker says.
Wai Hong Fong is the founder of niche online retailer OZHut. In late October, OZHut launched OZKitchenware, a category devoted solely to kitchen appliances and utensils.
“It’s going really well in the sense that we’ve seen a 50% increase in the business overall since its launch,” Fong says.
“I read somewhere that in a recession, when things aren’t going well, the two things that sell well are cookbooks and condoms because people tend to stay home more.”
“Since the GST, people have become more pragmatic with their gifts as well.”
In the lead-up to Christmas, Fong says the key sales strategy for retailers in the household category is to steer clear of the hard sell, suggesting online communities are the way to go.
“It’s all about building a community and leveraging existing communities,” he says.