Retailers Take Initiative at the Last Weeks Before Christmas

RETAIL REBOUND: Holiday sales have rebounded from a historic low in 2008, according to an NRF chart, but forecasting remains a tough game.

by Andrew Asch, Retail EditorDecember 07, 2011

It’s midway through the Christmas holiday shopping season, but a lot of shopping remains to be done, according to trade groupNational Retail Federation, with the average shopper having scheduled 68 percent of his or her Christmas shopping after Black Friday.

There is a lot of opportunity to make more sales and build more margins in the remaining weeks of the holiday season, when retailers earn 20 percent to 40 percent of their annual revenue. However, financial and retail experts are divided on how retailers can increase profits during the remainder of the season.

For Kevin Sullivan, executive vice president of Wells Fargo Capital Finance in Los Angeles, changing gears in the middle of the Christmas season is simply not an option. “If a retailer has not already planned for the holidays, it’s already too late,” he said.

Retail consultant George Whalin said there may be one way to add a little more sizzle late into the season. “If a retailer has the resources, they may want to run some additional radio, TV or print ads, or send out a couple of additional emails,” said Whalin, president of Retail Management Consultants in Carlsbad, Calif.

If retailers need to improvise with inventory or sales strategy, the season’s biggest shopping days are coming up, said Paul Zaffaroni, director at financial-services firm Roth Capital Services, headquartered in Newport Beach, Calif.

“Retailers can capture more margins by being strategic with their discounting and focusing their biggest promotions on key days, such as the two ‘super Saturdays’ before Christmas,” Zaffaroni said. The super Saturdays are considered some of the biggest shopping days of the season, and this year they take place Dec. 17 and Dec. 24. 

But the question of whether to discount or not to discount is contentious.

Retail Owners Institute, a Seattle-based strategy group, recommended promotions to help independent retailers avert disaster.

“The minute your staff says, ‘This T-shirt is a dog; we’re not selling any,’ take a markdown quickly,” ROI co-founder Dick Outcalt said during a Dec. 6 conference call.

The goal is to quickly replace poor-selling merchandise with items that will sell at full price. It’s a crucial move for a season when Christmas shopping could last well into January with gift-card redemptions. There’s a high demand for gift cards this season. Eight out of 10 holiday shoppers will give gift cards, according to the NRF.