Large Retailers Rethinking Thanksgiving Weekend Promotions

Retailers are feeling better about the future. For many, the future will include a bigger digital presence. A new BDO USA survey indicates that retailers have reviewed what worked and didn’t work in 2012 with respect to increasing sales. Most are prepared to DepartmentStoreShopper-150x150make some changes to improve their results in 2013.

After several years of anxiously waiting for consumers to start spending again, retailers believe 2013 will be the start to a period of stronger growth. While the prospect of higher taxes will keep shopper enthusiasm in check, there is growing optimism in the housing market and consumer confidence, two indicators that influence shopping in general.

However, over the past few years, the online shopping sector has become more important to retailers. While the CFOs at retailer establishments are expecting a 3.2% increase in total store sales this year, the e‑commerce part of their business is likely to grow by 6.9%. With this kind of growth in their sights, it should come as no surprise that more digital promotions will enter the media mix in 2013. In analyzing the successful promotions during the holiday season, CFOs say free shipping, email and social media have been most effective. Fewer executives believe that keeping bricks and mortar stores open for longer hours and offering deep discounts at Thanksgiving are yielding  enough benefits. As a result, we may see some retailers pulling back on the extent of their Black Friday promotions this year. Analysts suspect the key problem is linked to low margins on these big sales.

The survey also emphasizes the increasing importance of the mobile channel. At least 60% of big retailers will commit the same level of resources to mobile this year as they did in 2012 and 38% will increase this spending. Most are focused on the goal of  omni-​channel retailing. This would be a shift from 2012 when some retailers offered shoppers in the mobile channel better discounts than they would get in traditional stores, for a limited time period.

It will be fascinating to watch how the continued increase in e‑commerce impacts the way retailers carry out their 2013 holiday season promotions.

[Source: Retailers Forecast Modest Sales Increases. BDO USA. Feb. 2013. Web. 25 Feb. 2013]

 

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.