In a growing culture of minimalism, a preference for experiences (and experiential gifts) over material things, and a move out of the shopping mall, it’s reasonable to question whether the holidays are as important as they once were for retailers.
It’s no surprise that 2019 wasn’t exactly a great year in the retail world, as we saw a good handful of mall staples like Forever 21 and Payless ShoeSource close their doors (RIP). According to Retail Insider editor-in-chief Craig Patterson, however, the holidays remain as important for retailers as ever before – and so do the discounts.
The holidays can be the most wonderful time of the year for brands. But one bad holiday season can potentially break a business.
Though we’ve placed a newfound value on meaningful experiential, environmentally conscious gifts, gift-givers are still dropping countless dollars on prettily packaged presents. “Despite shifts in behavior, the holidays are still a time of mass consumption,” says Patterson. According to the National Retail Federation, for some companies, the holidays can account for as much as 30 per cent of annual sales.
One notable difference between now and times past, says Patterson, is that retailers are offering more sales after Black Friday (Fun fact: Patterson says they actually call it Black Friday because a lot of retailers won’t be profitable until around that day).
Now, the trend is to keep the sales running after the famous annual day of sales.
“Black Friday sort of kicks off the holiday season now. Discounting is pretty common; one of the things we’ve noticed over the years – especially since Black Friday has become more of a prominent thing in Canada – is that retailers are offering discounts for a longer period of time,” says Patterson. “Retailers will reduce prices right up until Christmas and then right after with Boxing Day. In the past, they may not have offered much before Christmas.”
The challenge for retailers, as Patterson points out, is that customers (especially those in pricey cities like Toronto and Vancouver) have now grown to expect a deal, even leading up to Christmas. Frankly, many of us refuse to pay full price for anything found within a shopping mall aside from the food court offerings.
With the arrival of Black Friday in Canada within the past decade, Boxing Day may be taking a backseat.
“Recent studies are showing – and we will be able to find out for ourselves really soon – that Black Friday may have surpassed Boxing Day in terms of being the most shopped day of the year,” says Patterson. “There are conflicting reports on that, though, so how important Boxing Day is sort of remains to be seen.” One survey by the Retail Council of Canada found that Black Friday is the top shopping event of the year in Canada, with 43 per cent of Canadian shoppers planning to partake in the deals, compared to 34 per cent on Boxing Day.
When it comes to the shopping mall, the festivities are in full force – perhaps even more so than in the past.
Shopping malls have definitely not let their game slide in the Christmas decoration department, going far beyond the typical Santa photo booth. “One thing that I’ve noticed is that shopping centers are really focusing on their pre-Christmas activations. For example, Yorkdale Shopping Centre has gone all out; they’ve actually partnered with Coach to create a Christmas tree that was decorated by Coach, along with a pop-up,” said Patterson. “The CF Toronto Eaton Centre has a pretty incredible tree.” Of course, we can’t forget about the windows at the Hudson’s Bay Company, which are as spectacular as ever, he adds.
Whether or not such eye-catching (and social media worthy elements) result in a direct increase in sales for the retail outlets housed within the malls, at least they offer a draw to the sale-filled space.
Just as the holidays can be a major driver of sales, however, they can also tank an already vulnerable business – especially in today’s climate.
“It really is a make or break time for a lot of retailers. In January, you start to see these notices of retailers going bankrupt, and it’s because the Christmas season is so volatile; a time for retailers to shine,” says Patterson. “A few years ago, I was working with a jewellery company in Toronto and they weren’t doing any sales really over the Christmas season because another major gold/jewellery company had gone bankrupt and was clearing out its product. Anyone looking for a deal went to the clearance sale. It can really sink retailers if they’re not making sales.”
So, a failing competitor could actually have detrimental affects on some brands, as sales-driven customers seek out the blowout bargains.
“I do think that more retailers will be filing for creditor protection in Canada, so we will probably be seeing more blowout sales,” says Patterson. “It’s a hyper competitive landscape right now for homegrown retailers, especially with the arrival of these big international brands to Canada. Retailers need to keep up, or they won’t succeed.”
Savvy retailers can make the most out of the holiday season by increasing their online visibility and SEO, ramping up their social media game and focusing on marketing. In-store food, beverages, and couches also never hurt.
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