Competition for seasonal sales heats up

The drug channel could be losing its edge in seasonal sales. GMDC’s recently released “Seasonal Best Practices” report revealed that, according to Nielsen data for the 52 weeks ended Oct. 26, 2013, while drug store seasonal merchandise dollar sales are slightly ahead of supermarkets, the channel’s sales have slipped 16%.

Seasonal dollar sales at the drug channel, according to the report, were down for Christmas, Halloween, Valentine’s Day and Easter, but were slightly ahead for summer seasonal promotions.

GMDC’s part one of a report on seasonal sales — part two will be released in July 2015  — could serve as a wake-up call for a channel that has traditionally done very well with seasonal merchandise. Other channels are turning up the heat and grabbing share. A panel discussion of several supermarket executives hosted by GMDC revealed that the channel is taking seasonal sales seriously.

In its report, Robin Gutridge, category manager of seasonal, home decor and social expressions at Raley’s said: “We’ve grown our GM seasonal business by 45% over the past three years.  Our CEO, family stakeholders and the SVP over our 119 stores all support GM seasonal.”

Yet drug store retailers willing to make a commitment to seasonal sales can win back consumers with strategic programs that 
are well-executed.

“The better retailers plan, execute and collaborate with suppliers, the better stores perform,” GMDC’s report said. The report said that chains, realizing they can’t be all things to all consumers, must decide what role their stores play in consumers’ holiday shopping and create a strategy that plays to 
those strengths.

When defining a role, the report said, “destination” is “the most aggressive, where shoppers could meet all their needs for a season.” GMDC’s report said that while retailers can’t feasibly aim to be a destination for every season, less intense roles can still be profitable. Roles can be identified as “routine,” where a retailer’s assortment is ample for shoppers already in the store, and “convenience,” where modest, basic merchandise offerings could fill a quick need, the report said.

Some best practices GMDC identified were displaying unique items early to spark impulse purchasing, taking markdowns in a controlled manner, and using category management scorecards and metrics to demonstrate the value of seasonal departments to decision-makers.

The report stressed the importance of a speedy and accurate review of what works and what doesn’t following each season so chains can re-plan rather than start from scratch each time. “The quicker and keener they review and analyze results, the stronger success prospects will be the following year,” the report said of retailer performance. CDMA recommends reviewing within 45 days, “when memories are fresh and energy is high.”