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Specialty Retailers: Nothing but Good News this Shopping Season

Posted by Tom Lombardo | Mon, Dec 08, 2014 @ 10:59 AM

Since stockbrokers like to have a number for absolutely everything they invented an index to measure fear, called it the “volatility index,” and gave it the ticker “VIX” on the New York Stock Exchange. When it goes up, something is wrong, and when it goes haywire we’re in the midst of a crisis. So this is exactly what you want to see going into the holiday season:

volatility index

A nice steady nationwide slide into a happy, stable feeling that since the economy is humming along we can all focus on shopping.

First, the Good News

Spend MoreAccording to a study of over 5,000 shoppers conducted by Deloitte, for the first time in two years we’ve seen an increase in the number of shoppers who expect to spend more this year than they did last.

Almost two in three shoppers finally feels like we’re recovering from the recession while the third one believes we’re still caught in it. And not only do the first two expect to increase their holiday spending by about 13%, the really big news – especially for those of us in grade school – is that the number of gifts people intend to purchase went up for the first time in eight years, to 13.4 (it was in the twenties before the crisis).

In fact people are going to spend more on everything this holiday season: 15% more on socializing, 22% more on entertaining; 15% more on holiday furnishings. So pretty much wherever you are in the holiday supply chain, you’re looking at a great year’s end. And don’t get impatient between now and Black Friday – 43% of shoppers won’t even start looking until December

Oh Wait, More Good News

There’s going to be a lot of them, and they’ll be in a good mood since the U.S. economy added 2.64 million jobs in the last year – the biggest surge since the height of the housing boom in 2006. Even better: last year not only did the fewest number of people since 2000 apply for unemployment but one measure of claims relative to the whole population just beat the gold-standard record set back in 1969. 

Seasons SavingsAdd to that the fact that fuel prices could not possibly have picked a better time to drop to their lowest levels in years, with further declines possible, and you have another reason to expect a great season. For many shoppers, the last few months of fuel savings may pump up holiday budgets while seeing prices drop below $3.00 a gallon may give confidence that extra spending on the holidays won’t cause problems in the New Year.

Good News about You in Particular

There seems to be an inexorable force directing shoppers to local businesses like yours because people want a shopping experience as much as they want the things they are shopping for.

In fact, experiences count for more than material goods in today’s market, and integrating this fact into your customer service may have a bigger impact on your word-of-mouth marketing and your close ratio than anything else.

Many psychological studies have shown that giving makes people a lot happier than having stuff for themselves, so holiday shoppers are already setting themselves up to feel good.

You can amplify that to close sales by making sure that your customer’s shopping experience makes them so happy that it becomes a commodity unto itself. And that commodity – the experience – is something your customer gets to keep, even if she gives away everything she buys. Not only will it increase the chances that she’ll tell others about you (because sharing stories is the only way to validate them), but the experience and the story about it will still be valuable to your customer weeks after she’s bought, indicating this method may drive traffic to your store for an extended period of time.

Combined with the “Buy American” and “Buy Local” trends, providing a top-notch shopping experience may the single most important aspect of your business development this year because, despite all this good news, BestBuy, Wal-Mart and Target have all tempered their expectations for this year. The big box stores may be worried mostly because they know that the moment the market is strong enough to think about more than price, their ability to compete starts to rapidly decay. Not only that, but perhaps realizing that a website simply cannot generate a story-worthy shopping experience, Amazon is opening its first retail outlet in Manhattan, just in time for this year’s holiday season, indicating that the market is not only going American and local but physical as well. In fact, today’s wired customer isn’t looking to buy online – she’s more interested in an integrated experience that ends in a physical store.

As It Turns Out, There’s No Bad News!

With all these positives lining up as though they had an absolutely outstanding sense of timing, it’s possible that this holiday season may be the best we’ve seen in a while.

Remember that even though half of shoppers won’t punish a retailer for past instances of payment fraud, a huge majority are really worried about data breeches and will appreciate your efforts to accommodate their payment preferences. But don’t just accept checks because they are among the most secure, the most private, and the most trusted payment types. Your customer will expect at least that.

You can also use checks as a means to close more sales by offering your customer what we call “in home layaway.” It’s not financing but it allows your customer to take home an item now even if they pay for it over the course of the next couple of paychecks. Not only do you have a better close (people abandon layaway items all the time, but they tend to keep what they take home), you can also get a revenue guarantee on all the checks you validate and accept.

Why not let the VIX drop to zero at your point of sale? Your customer gets what she wants by paying with checks she trusts and by walking out with the gifts she desires, and you get guaranteed payment while giving your customer a great story to tell others. Even more good news! Find out how here.

hold check, payment flexibility, increase sales

Topics: Retail

Written by Tom Lombardo