The holiday shopping season is in full swing, and independent retailers may find themselves once again going head to head against large retail companies. Fortunately, there are several tactics small businesses can employ to compete with the big-box stores. These include instituting a gift card program, stocking up on unique toys and clothing, altering holiday offerings to accommodate self-gifters and offering free shipping.
In a recent National Retail Federation (NRF) survey, gift cards were the most requested and most purchased holiday gift item, with 80 percent of respondents saying they planned to buy at least one. That means independent retailers must stock and promote gift cards in their stores, talking up their advantages to customers. Gift cards, for example, allow recipients to use their cards at any time, all year long.
After gift cards, the two most popular categories for holiday shoppers are toys and clothing. Specialty retailers should get these items front and center, marketing them as gift choices to casual browsers. The advantage here goes to independent retailers that can offer unusual toys or unique items of clothing that can’t be found at the local mall. The key is to have items that meet shoppers’ practical needs while setting your particular stock apart from the crowd.
This year, more shoppers are willing to make purchases for themselves. According to the NRF’s annual holiday consumer spending survey, nearly 60 percent of shoppers planned to self-gift. Respondents estimated that they would spend about 20 percent of their total holiday outlay on themselves. The biggest spenders were young adults between the ages of 25 and 34, and smaller retailers that display items geared toward that demographic might score extra sales.
Any retailer that sells online must be prepared to take a loss on shipping costs, as such deals have now become the norm rather than the exception. According to the NRF, 92 percent of online retailers offered free shipping during the 2011 holiday season, and that trend has continued this year. One possible bright spot is that last-minute buyers will have to pay for expedited shipping to get their gifts delivered before Christmas.
The final months of the year are a critical time for retailers, with holiday spending accounting for about 20 percent, on average, of their annual sales. The NRF estimates shoppers will spend 4 percent more this year than last year and implementing the suggestions above could mean big gains for independent retailers.