WSL Future of Health Event

Holiday sales picture unclear

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The holiday selling season is here. It is, or will be, the most complex, confusing, difficult-to-decipher period that mass retailing has embarked on in some time.

The holiday selling season is here. It is, or will be, the most complex, confusing, difficult-to-decipher period that mass retailing has embarked on in some time.

Few mass retailers are approaching the season with the same array of strengths and weaknesses with which they competed a year ago. Then, too, some of the very tools that served them well last year — competitive pricing, convenience, extended assortments — are more problematical this season, simply because more competitors are offering more competition in these core areas.

Perhaps most daunting of all is the new competition — or, put another way, the new formats of existing competition.

Amazon, for example, has emerged as a full-fledged retailer, no longer competing for business as an alternative distribution channel but as a viable alternative to brick-and-mortar companies. Moreover, Amazon has distinctive advantages: price, assortment, reliable deliveries and ease of shopping. More shoppers than ever, apparently, are willing to turn on their computers rather than brave the crowds and the elements to visit their neighborhood retailer in a quest for holiday gifts.

Amazon and other online retailers, for perhaps the first time, offer a healthy alternative, and more shoppers than ever will surely take advantage of what has become another viable shopping option.

Amazon has confused the issue by opening its first brick-and-mortar store, a modestly sized bookseller in Seattle. Those who rush to analyze these events have jumped in quickly to predict the end of retailing "as we know it," contending that Amazon’s new store will destroy the balance of power that has kept traditional businesses upright. Truth is, nobody yet knows what, if anything, this new store will mean. It is, after all, a bookstore, and that segment has been disappearing from the American retail landscape — due perhaps to the emergence of Amazon as an online bookseller.

Speaking of online retailers, more will join the competition this year, including many that have stayed away thus far. Walmart, for instance, is pushing hard to become a viable online retailer. In the Walmart world, that means challenging Amazon. But in challenging Amazon, will it also be challenging itself?

Target’s back this year, continuing to recover after a disastrous Christmas season in 2013. At its best, Target is the equal of any mass retailer in America, and it certainly appears poised to compete this year.

Unnoticed, or purposely ignored, is the stunning performance of Costco, a membership retailer that continues to outpace every mass retailer in the nation in its ability to churn out sales while converting Americans to its format, its merchandise assortment and its price advantages. Earlier than any retailer, Costco has opened its holiday selling season with a full array of merchandise — and customers are already responding. Face it: It’s become impossible to ignore Costco’s offer of quality merchandise at not-to-be-beat prices in a hospitable if sometimes crowded shopping environment. And fewer consumers than ever are doing so.

The grocery channel has also spruced up its holiday offerings, particularly in general merchandise. Certainly of late, America’s leading supermarket retailers have shown themselves capable of competing in the mass retailing community, and this year looks to be their strongest holiday selling season in some time.

As for the chain drug industry, it remains primarily committed to health care, though beauty care still accounts for a strong sales contribution — and perhaps more of a commitment than drug chains have shown in recent years. Still, beauty care is hardly the centerpiece of Christmas merchandise, and drug chains have been slow to increase activity in other seasonal categories.

This thumbnail sketch doesn’t include other mass retailers that will certainly contribute to the confusion that holiday shoppers will face as they attempt to sort out the many options as Christmas approaches. Clearly, if consumers choose to spend more freely this year, they will spread that spending over a wider assortment of retailers — with the result that more of those retailers will feel the pinch of fewer customers and fewer sales at a crucial time in the retail year.


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