Capitalising on festive spending patterns

At first glance, it seemed that stores and centres were slightly slow on the festive-uptake this year, with decorations going up somewhat later than expected. However, these soon took over shops and malls in all their glory. The opening of the new Sandton Centre and its infamous Zara clothing store also fuelled a flurry of festive season excitement countrywide and reminded consumers (well, high-end consumers) that in-store is where it's all happening.

So how can retailers and marketers make the most of this momentum? Based on our recent observations and experience, here's some advice for industry professionals this season:

Give an irresistible deal

Convincing consumers that they are getting the best deal they could possibly get is imperative. Seventy-eight percent of consumers prefer purchasing goods that are 'on sale'. For some reason, it is compelling to buy something that is on sale and to feel like you are getting more for your buck, even if you may not have bought it in the first place. Despite some premium brands sticking to their guns about sales devaluing the brand, like Diesel, others are giving in to the pressure this season - such as Hugo Boss, which plans on a 20% markdown for the festive season.

Think and give them what they need

Ninety percent of shoppers will be seeking useful purchases this season, 84% are going to make less impulse purchases and only 32% of adults are thinking of giving gifts to their partners (according to Deloitte's survey). Clearly, the season of spoiling is taking strain but there is an opportunity in 'useful' gifts. So the critical question is, 'what do my consumers need'?

High-end department stores such as Stuttafords, Woolworths and Edgars have clearly picked up on this and have stocked their shelves with seasonal gift packs containing a number of complementary items. They are doing the work for the consumer (why hunt around if you can get it all in one go?) and further motivating the purchase by slapping on a discount for buying more than one item.

Department stores such as Game are also pushing value for money with 'useful' products like paint, microwaves and other kitchen appliances with messages such as "big gifts, small prices" and "bringing out the biggest deals." It may not be very romantic getting a blender for Christmas, but if it is something wanted and needed then it makes spending the money well worth it.

Interestingly, despite the fact that most consumers in the Deloitte's survey are planning to give cosmetics and perfumes to family and friends, the majority said their most desired gift is cash. This again proves that consumers want what they need, rather than need what they want. So when possible, give them an option to return or buy a gift card.

Hugo Boss is not only marking down its prices, but it is thinking for the consumer as well - by offering practical gifts such as wallets with free key rings, perfumes, ties, belts, gift packs and gift cards, as opposed to its usual suits, shirts and other clothing items. "This also opens the market to female shoppers, as sizing requirements are not required," explains Suliman Surtee, owner of Hugo Boss SA.

Merchandise with your consumer hat on

South African shoppers are still coming in-store to shop, as opposed to doing online shopping. It is important then, to make sure your product is situated at as many relevant points of decision-making as possible to capitalise on their time in-store.

For example, Checkers may not be able to tap into the adult gift market, but it is going all out for kids and using merchandising to help the consumer consider different gifts. It has placed kiddies' gifts, gadgets, sweets and chocolates throughout the entire store to stimulate purchase decisions.

Communicate in-store

Consumers might be purchasing fewer impulse gifts but they are still doing their in-store bargain-hunting homework. This means that brands must go the extra mile in-store, beyond the shelf-talkers and deals, if they want to stimulate an unplanned purchase or trial. Considering that 67% of consumers are choosing to buy private-label over independent brands, communication from the latter is particularly important.

For example, sampling, demos or take-home recipes could trigger a purchase that the consumer would not normally have made or have been willing to try. Give consumers a reason to purchase there and then, before they leave the store to find something better!

Retailer versus restaurant

With the consumer sentiment being that they are willing to save on eating out this year, there really is a gap for retailers to steal market share from restaurants. However, for restaurateurs the upside is that consumer travelling will be reduced, so although there will be much eating and entertaining at home, the desire to indulge and treat oneself and one's family to other smaller and more affordable forms of entertainment will be even stronger. So, give consumers a value for money experience that allows them to enjoy the little things and they will still support you.

Despite the fact that South African consumer confidence still sits higher than its European counterparts, the overall sentiment is one of uncertainty. All around us are headlines and news clippings of double-dip recessions and crashing economies, which are not about to encourage frivolous spending and entertainment. So for this last push, those of us in the marketing industry are going to have to roll up our sleeves and work that much harder in the hopes of winning over increasingly cynical and savvy shoppers.