Now that Halloween is safely behind us and the government has been so good as to flirt with declaring the recession to be over, the rest of us can briefly turn our attention to the all-important year-end holiday shopping season.
You retailers have been preparing for it for weeks now, if you're smart.
The National Retail Federation is forecasting a one percent dip in this year's holiday retail receipts, with consumers spending, on average, 3.2% less this year than they did last year. In other words, the 2009 holiday retail pie will be smaller this year and everybody is figuring out how best to carve out a piece if it for their business.
The big story in retail this year, as it was last year, will be the economy. The government might be gleefully noting the 3.5% growth in the economy during the third quarter of this year but don't tell that to Joe and Jane Consumer. They are still nervous about continued job losses and making ends meet, and few of them will be ready to splash out on gift buying this year.
Under the circumstances, anything small business retailers can do to save people a bit of money will help both consumer and business owner.
As a general rule, these sorts of economic times are bad news for small businesses in retail because they are not often in a position to compete on price in this industry sector. On the other hand, if there are other ways in which those small retailers and e-tailers can add value without having to increase their prices, that will be the way to go.
Offer plenty of payment options, including layaway, to accommodate your customers' jittery nerves and reluctant spending. Roll out as many extra gift-giving services as are already in your arsenal and be willing to make up a few more. And make ‘customer service' your middle name; friendly, personalized service is where small businesses can really outshine the big boys. Make the most of your competitive advantage!
Having said all that, even if you can't necessarily compete on price, don't hold back on the sales and promotions this year. Everybody is still keyed to those monthly jobs numbers and, unless the labor market unexpectedly turns around within the next few weeks, everybody will be looking for a bargain.
That goes for the Main Street merchants, the multi-channel retailers and the Internet pure-plays, as well. For online merchants, free shipping remains at the top of the heap again this year, with offers including with conditions, without conditions and starting earlier than last year.
Online merchants anticipate making lots of use of social media as a low-cost marketing strategy this holiday season, adding or improving their Facebook pages (66%) or their Twitter accounts (59%) and beefing up their blogs and RSS feeds (66%).
In addition, according to a recent Shop.org survey of online merchants, many will be using available technologies to enhance the customer experience in order to stand out from the crowd. Respondents say they have revamped shopping carts (45%), on-site search (44%), suggested items (43%), customer ratings and reviews (40%), and featured sale pages (37%).
Smart merchants will work to match their site enhancements with what customers say they want and why they say they will shop online. For many customers, the reason is the simple convenience of the 24/7-shop-when-you-want Internet retail. Others find it easier to compare prices or even to find the item they're looking for. And, as has been found previously, online shoppers simply love that free shipping.
A lot of those site enhancements and holiday promotions are expected to work, too, as many are expecting online retail to be the lone bright spot in the holiday retail season. Forrester Research predicts that 2009 online holiday retail sales will increase by 8% over 2008 levels, although success is expected to vary depending on retailer type, size and product mix.
For small retail businesses, online and off, the key for a successful holiday season will be a combination of smart inventory management, smart operational choices that enhance profitability, and top-notch customer service.
The good news for all you retailers out there is this: the 2009 holidays shopping season is certainly expected to be better than last year. How much better will depend, in part, on how well you can anticipate what appeals to your customers and give them what they want.
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About the Author: Dawn Rivers Baker, an award-winning small business journalist, regularly reports and analyzes small business policy and research as the Publisher of the MicroEnterprise Journal, where the nation’s business meets microbusiness. She also publishes the Journal Blog.