Retailers decorate shelves with cheaper holiday goods

9/28/2009

No one expects a fantastic holiday season, but drug store retailers could generate steady sales from gifts priced under $20.

Tom Bunge, president of the Food Drug Mass Marketing Co., a national retail marketing consulting firm, expected gift giving to be flat to slightly up this year. “I think we’ll see smaller gifts being given, and the mass market should benefit from that,” he said. Consumers, he said, will be looking for “affordable luxuries,” and the mass and drug channel will offer them a range of options at value prices.

CVS, for example, featured a microfiber robe from Aquis for $39.99 on its Web site, along with a number of gift sets from Aromafloria/California Fragrance Co. and Spa Necessities retailing for under $20. That $20 price point seems to be the magic number for drug chains.

“Mass retailers should do well this holiday season in this economy, but they need to offer affordably priced items priced at $19.99 and below,” said Chris Barnes, president of Candle Warmers Etc. Retailers, he said, are particular about how much product they are bringing into stores. “They want four to six pieces in the store instead of 10 to 12 pieces,” he said.

Barnes said the company’s Aurora Candle Warmer Lamp and Contempo Candle Warmer Lamps, priced at around $30, have done well at retail, but he expected even more movement from the company’s new Illuminations Fragrance Warmer, priced at $12.99. Kinney Drug will feature the company’s Hurricane, Aurora and Illuminations products on an endcap in the fourth quarter. CVS will carry several products on its Web site, and likely will carry some models in-store.

Hanna’s Candle Co. is featuring a new wooden wick natural candle, Timberwick, for the holiday. “The Timberwick is very giftable and will retail for $12.99 to $15.99, so it’s a unique gift at a nice price point,” said director of marketing Annett Davidson.

Diffusers, Davidson said, especially in ceramic versions with such add-ins as acrylic beads, are still popular. “Diffusers are a growing home fragrance area,” she said. Hanna’s also will be offering licensed Cinnabon, Hershey’s and Cold Stone Creamery candles for the holiday.

Gibson Overseas is focusing on Peanuts licenses for its holiday season gifts. “We’re a value-oriented supplier, so we tend to do better than most during down economies,” said Roy Chung, director of marketing and communications. “Our drug store business is up 23% year-to-date, with chains looking more and more to their general merchandise to boost traffic and profits.”

This season, CVS will carry Gibson’s Peanuts Happy Holidays three-piece Melacore kids’ set and Peanuts Holiday Joy mugs, which will retail for $9.99 and $4.99, respectively. The products have a Christmas theme.

Toy suppliers also are looking to the $20 range for the most movement this season. Barry Lederman, VP sales and marketing for Peek A Boo, said he expected promotionally priced plush to perform well this holiday season. “Big and cheap will sell,” he said. He expected the company’s line of 10-in. and 12-in. plush Gum Drop Kids and Snowbunnies to be top sellers this season.

“Toys are recession-proof; they are a perpetually strong category for the holiday season,” said Richard Freeman, VP domestic sales at Fascinations Toys & Gifts. While Freeman doesn’t expect sales to be as robust as in past years, he thought the season will be stronger than anticipated, and expected toys priced under $20 to have the most sell-through. “People are going to be picky shoppers,” he said. “Toys that are offered at $20 or under will be huge successes. Innovative new products and retro toys will provide excellent shelf appeal.”

The company has introduced new technology products and inexpensive novelty toys with a learning angle, such as the First Time Clock, a build-your-own clock for kids.

Manufacturers are concentrating on the classics when it comes to licensed holiday products. American Greetings’ ornament lineup will focus on SpongeBob SquarePants, Rudolph and Transformers. The ornaments will retail for $7.99. American Greetings also will run an exclusive plush promotion that offers a Jingle Bell Puppy for $5.99 with the purchase of three AG cards when consumers use their CVS ExtraCare cards.

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