Inside This Issue - Opinion
Retail is all about the customer
January 28th, 2013
by David Pinto, Editor
No mass retailer prepared more thoughtfully, more diligently, more creatively or more wisely for last year’s Christmas selling season than Target.
The Minneapolis-based merchant offered its guests a variety of compelling — indeed irresistible — reasons to shop its stores. Among them:
• A brilliantly conceived and flawlessly executed alliance with Neiman Marcus that offered Target customers some 26 original accessories and household items created by some of the world’s best-known and most highly regarded fashion designers — and made them available only to Target shoppers.
• The opportunity for customers to select children’s gifts at Target, then have the retailer mail these gifts to their recipients, along with the appropriate greeting — all electronically and with little effort on the part of the customer.
• An opportunity for customers to compare Target’s prices with those of any competing online or brick-and-mortar retailer.
These inducements came with the usual Target shopping inducements in merchandise, value, selection and service that have combined to uniquely position Target among mass retailers and transform the retailer into a compelling favorite among consumers.
So what happened? Target’s sales during the holiday selling season were flat.
Why? Perhaps Target failed to effectively convey the excitement and variety of its unique offering. Perhaps Neiman Marcus just doesn’t have the cachet for Target shoppers that it does for Neiman Marcus zealots. Maybe brick-and-mortar customers just aren’t all that interested in comparing prices with online retailers. Perhaps customers who prefer brick-and-mortar stores to their online counterparts don’t care as much about price as they do about the ambiance, excitement and serendipitous experience of shopping in a real store. Perhaps … perhaps … perhaps.
A similar case can be constructed for Christmas at retail as can be made for Christmas at Target. Mass retailers had it all going for them last year: a recovering economy; an early Thanksgiving and resulting extended holiday shopping season made even longer by the growing movement among retailers to open earlier and remain open longer; more aggressive and creative promotional and marketing programs than retail has fielded in some time; the fact, always significant in the past, that Christmas fell on a Tuesday, giving customers an important final shopping day before the holiday.
Though the list doesn’t end there, it is mitigated to some extent by the ongoing confusion over the debt and taxes struggle in Washington; the still-sluggish nature of the U.S. (and global) economy; the growing strength, reach and omnipotence of online retailing; the unpredictability of the weather; etc., etc., etc.
The point is that three weeks into the new year no one has been able to put the holiday selling season into proper perspective or adequately explain its disappointing outcome. Put another way, how could Target have recorded flat sales after unveiling and promoting a holiday marketing, merchandising and promotional program that was among the most creatively complete yet assembled by a mass retailer?
No one knows. And six months from today no one will know. The difficulty is that retailing is all about the customer — and this year the behavior of that customer was more difficult than ever to predict.
Certain conclusions can be drawn, however, about consumer behavior this year and in the past. For one thing, consumers apparently like shopping more than they like buying. How else to explain their trips to the store at 10 p.m. on Thanksgiving night, only to return home three or four hours later without making a single purchase — or buying only so-called door-busters?
For another, weather matters. This year the effects of the storm that fractured the East Coast at the end of October were felt right through December. These included both the tangible economic effects and the less tangible emotional impact. Instead of shopping, consumers were busy rethinking their future, rebuilding their homes — and waiting with growing impatience to be reimbursed for their losses.
Finally, there are limits to the positive impact even the most dynamic and creative marketing programs can exert on consumers who have already been saturated with merchandising promises fulfilled and promises to come. When is enough enough? — when consumers are forced to confront the fact that last week’s unbeatable deal has morphed into this week’s unbeatable deal.
One more thing: Consumers, always smart, have become smarter than ever. If they’re not interested in the aura of Neiman Marcus, transplanting that aura to Target, or any other mass retailer, will not simonize it for them. And this year Target’s guests were just not that into Neiman Marcus creations, whatever the price.
Who could have predicted it? And, even now, who would believe it?