Capitalising on christmas
Ah, Christmas promotions. So much fanfare, so much cardboard, so much waste. It’s the marketer’s Catch-22 – damned if you do, and damned if you don’t.
Or are you?
Do you spend inordinate amounts of money on Christmas-ifying your point of sale in order to be ‘part of the Christmas spirit’, and risk being lost in the visual clamour of all the other red, white and green things? Or do you stand on the sidelines, potentially Scrooge-like, and watch the Christmas parade pass by while you promote your point of difference?
In other words, do you Zig or do you Zag? Well, as with most things in life, it depends.
Below are some steps to successfully negotiate the in-store Christmas clutter with the least amount of grief. Whether you should Zig (‘be in it’ in terms of Christmas theme and price promotions) or Zag (do your own thing, and not necessarily drop price) depends on the relevance of your category to Christmas shopping occasions.
There are two basic shopping occasions surrounding the Christmas season: entertaining and gifting. We’ll deal with categories in each of the above two occasions, and also what to do (or not to do) in categories that fall into neither of the above.
Which categories? The basics are:
- food: traditional Christmas dinner items such as hams, chickens, turkeys, puddings, mince pies, prawns, ice cream and custard for the pudding, gourmet condiments and sauces
- treats and snacks: chocolates, dips, cheeses, crackers
- liquor: beer, sparkling wine, table wine, RTDs
- non-alcoholic beverages: bulk packs for entertaining
- decorations: tree and home decorations including baubles, tinsel and lights, wreaths for doors. gift wrap, tags, bags
- utensils: paper plates, cups, napkins, and
- lighting: indoor (candles), outdoor (bamboo lanterns, fairy lights).
In-store execution: create solutions
Shoppers shopping for Christmas entertaining are in stock-up mode, but they are time pressured, harried from dealing with crowds, and therefore looking for convenience and a ‘one-stop shop’. Entertaining occasion categories should be ‘redded up’ in traditional Christmas gear, put all together if possible to create an ‘entertaining solution’ display and have a clear occasion message, e.g. ‘Christmas dinner’.
Entertainment solution displays may be divided into the following:
- cold foods/delicatessen
- decorations, lighting and utensils, gift wrap
- treats, snacks and condiments, and
Don’t discount turkeys at Christmas
Because it’s a one-stop shop with a time limit, the grocery shopper mindset for Christmas shopping is ‘how fast can I get out of here?’ not ‘how much can I save?’. Entertaining occasion items would be purchased anyway, so there is no point in decreasing your and the retailer’s profit for the same sale. Price should only be dropped as a mechanism to secure display, if necessary. Price point should be communicated on point of sale, but being ‘on special’ is less important than getting display visibility with a clearly communicated occasion.
Are you in a gifting occasion category? If not, can it become gifting by changing pack format or gift boxing, e.g. single serve chocolate bars versus gift box chocolates? Can your category ramp up the indulgence factor to play in gifting occasions? Who would buy your category, for whom? And what does this mean for pricing and execution?
It starts with for whom the shopper is buying
Is there a ‘type’ of Christmas shopper? For instance:
- ‘on a budget’ – I only have $X to spend across everybody, or $X per person, or
- ‘the right thing’ – I want to buy them the right thing to show I care, regardless of the cost.
In reality, a shopper might be either depending on for whom they are buying.
The shopper’s relationship to the gift recipient is at the core of what they are likely to buy and what they’re likely to spend on it. Let’s look at three levels of relationship – intimate, close and distant – and their impacts on gifts bought.
Who they are: immediate family such as mothers, fathers, kids, wives, husbands.
Shopper mindset: I want to show that I spent time and effort in thinking about them and make sure that I get exactly the right thing for them. Price is not very important. I am happy to spend several hours getting the right thing.
What they buy: specific, high-value products and brands, potentially with a degree of uniqueness or customisation. Unlikely to be gift box format unless a very high-value item.
Categories: books – specific authors; music – specific artists; perfume – premium and couture; accessories – belts, scarves, ties, handbags; jewellery; digital and electronic devices; toys and games – higher value; tools; sports and leisure, e.g. golf clubs, fishing rods; high-value vouchers; chocolates (high-end, as additional present to the primary one).
Who they are: close friends seen frequently, grandparents.
Shopper mindset: I’m happy to spend a few dollars on something nice that shows I know them, but isn’t too intimate. And I don’t want to spend hours looking for it.
What they buy: category may be matched to individual recipient, but may or may not be brand- or product-specific. May be in gift pack format.
Categories: books, music and DVDs – category specific; liquor – focus on bottled wine, sparkling wine, spirits, imported, micro- and home-brewed beers and kits; bags; perfume – mainstream, gift boxed; personal care pampering – bath packs, foot care packs, skincare; homewares – kitchenware, e.g. platters, particularly with an entertainment focus, candles; toys and games (low cost) – for both kids and pets; pot plants and flowers; cosmetics – gift boxes; chocolates mid- to high-end, e.g. Lindt, Cote D’Or.
Who they are: friends seen only occasionally, acquaintances and work colleagues, clients, extended family, e.g. cousins.
Shopper mindset: I need to be seen to be doing the right thing, but don’t want to spend too much time and money. How many people can I knock over all at once in one store for a total of $X? What can I buy in bulk?
What they buy: categories not matched to individuals. Generic, ‘safe’ categories, lower value items, likely in gift box/value pack format. Multiple recipients may receive the same item.
Categories: liquor – red wine, gift boxed liqueurs with glasses; homewares – candles; toys and games – stocking fillers; pot plants and flowers; chocolates including themed, e.g. Santas, coins, roses; food items, e.g. hampers.
Impacts on POP execution
The type of relationship impacts upon what is bought. This in turn impacts upon how the category should be executed. Let’s look at how each of the relationship categories would work in-store.
Brands in categories falling under intimate relationships should ‘Zag’. That is, they should focus on their own branding, uniqueness and point of difference. Ensure your POS embodies your brand and reinforces shopper decision as to why they should buy you. Do not use Christmas colours in the point of sale. Focus on shelf space, and an additional display in the immediate vicinity of the category, as the category is a destination. Price point is relatively unimportant. Chanel is famous for not discounting its perfume. Ever. Yet it remains popular as a Christmas gift because of its brand strength – shoppers buy it anyway.
Products in categories falling under close should concentrate on quality and value for the money, particularly for gift boxes. Point of sale should carry images of the gift pack and outline its contents and the price point: ‘For $XX you receive all this…’ Christmas colours and messaging should be subtle. Displays should ideally be located at the front of the store, or at least within the category vicinity.
Front of store rules for displays. If you’re not in a large display bin at the front of store or on a gondola end, don’t bother. Colour up your point of sale to reflect Christmas, decide on a sharp price point, and communicate value – provide an incentive to buy your product versus the competitor’s. Quality is less important here than price and convenience. Ideally use promotional staff to communicate your product and generate trial if necessary.
This can be summarised in the featured table.
What about other categories?
What if you’re not in an entertaining or gifting category? For example, what if you are: apparel (lingerie, socks and jocks, and apparel vouchers excepted); staple groceries, e.g. milk, bread, toilet paper; health foods and health products; personal care staples, e.g. shampoo, toothpaste; general household goods, e.g. garbage bags? Staples don’t require being Christmas-ed up as they bear little relevance to the occasion. For instance, it’s hard to see a roll of toilet paper on Christmas promotion unless it’s a novelty roll of loo paper with Santas and reindeers etc. on it. You can capitalise on the stock-up shopping occasion and additional store traffic with price promotion and ‘just in case’ messaging without turning everything red and green and adding to the clutter.
For household categories that are guest-facing, you might be able to up-trade shoppers to a higher quality product. An interesting UK study outlined in The Retail Bulletin highlights the tendency for consumers to trade up to higher quality items across most categories during celebration seasons due to ‘snob value’ – the need to impress guests. Products in this category include beverages such as juice and coffee, and personal care items such as soaps, hand wash and, yes, toilet paper.
So as we’ve seen it’s all about the occasion and the shopper’s relationship with the gift recipient. If you’re a ‘distant’ category then it’s all about Zigging – rolling out the red, white and green and the sharp price point and ‘buy in bulk’ messages. If you’re a ‘close’ category or entertaining occasion the focus is on communicating the occasion, quality/value equation and convenience of the one-stop shop. And if you’re an ‘intimate’ category or a household staple not related to Christmas you should Zag – stay away from Christmas colours and messaging and instead concentrate on branding and up-trade.