Has Australia got the Holiday Selling Season Back-to-Front?

Posted on 19. Dec, 2011 by Jon Bird in Retail Marketing

In the retail “School of Hard Knocks” from which I (and most people in this industry) graduated, I was always taught the importance of the “runway to Christmas”. The idea was that during November you’d launch a strong promotion into the market to bring forward as many sales as possible. This would lift the sales plane off the runway, and the momentum would carry forward into December. As your sales took off towards Christmas Day, you’d throttle back on the discounts and incentives and reap the benefits of higher margins. Well, at least that was the plan, Stan.

These days, no matter what retailers do, there seems to be difficulty lifting that damn sales plane off the tarmac as we lurch towards Christmas. A big part of the issue is that customers have been trained over time to hold off until the Boxing Day Sales. So we panic, wildly throwing percentage off discounts at the market, and hope for the best.

When you think about it, it’s kind of the wrong way around, with the big promotional hook after the big day. And that’s where I think the U.S. has it absolutely right.

American retailers start their runway to Christmas on “Black Friday”, the day after Thanksgiving (so called because that’s when the red ink is supposed to turn black). The timing is perfect because Thanksgiving falls on the fourth Thursday of November each year and Americans enjoy a four-day holiday weekend – ideal for shopping. Retailers have embraced the idea with many opening stores at midnight on the Thursday, and customers love it.

The sales event has further evolved with the relatively recent invention of “Cyber Monday”, an online sales promotion to round out the weekend. This year, Americans spent a record US$52 billion over the four days, about 20% of a typical month’s US retail sales. We don’t have the full stats for November as yet, but last year, sales were up about 6% on the previous month (I’d expect this year to be a bigger increase). Compare that to Australia, where there was essentially no sales growth from October to November last year.

Yes, the US still has a biggish December 26th, but it’s only the third highest-volume sales day of the holiday season, after Black Friday and Super Saturday (the Saturday before Christmas).

So my question to Aussie retailers is this: do we need a new approach to the holiday season’s promotional calendar? How about a Super Saturday in 2012 on the last Saturday in November – the 24th? Our own version of Black Friday would be designed to kick off the selling season in earnest and provide that initial lift on the runway to Christmas. Then over time, perhaps we ease back on the post-Christmas sales, and use them for what they were originally intended to do, which is to clear surplus stock.

It’s worth discussing…because right now our selling season really is a silly season.

• No Related Post