Strategic moves to drive results this holiday season
Retailers don’t need to be rocket scientists to navigate this year’s final quarter. In the face of inflation and an uncertain economy, food and drug retailers can rely on many of the same merchandising and marketing strategies that succeeded in the past year or two — which include remaining sharp on price.
That’s as good a formula as any to navigate a holiday period in which consumers are still tentative about spending and uncertain about the future.
Mixed Economic Outlook
The forecasts from economic experts are mixed. U.S. economic growth has slowed, but the outlooks for inflation and recession still aren’t clear. Consumer spending levels at retail will be crucial to monitor, National Retail Federation chief economist Jack Kleinhenz said in a September economic review. “All eyes remain on the consumer, and what is happening in retail is very important,” he said.
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Family-focused Strategies
Retailers have succeeded with virtual programming for families during the pandemic, and this approach holds a lot of promise in the fourth quarter. A thoughtful example comes from The Giant Co., whose team of dietitians is offering a series of free live virtual classes. Giant’s programming includes events on hunger action awareness, kids in the kitchen and family meals consumers can create in less than 30 minutes. Kids in the kitchen presents Disney-themed classes with dishes that include Winnie the Pooh’s pasta salad and Rapunzel’s frying pan cookie.
Halloween Inspiration
Halloween is an important retail opportunity, and one of the biggest trends in recent years has been to bring pets into the celebration with unique costumes, treats and other touches.
Food and drug retailers can take Halloween inspiration from pet product retailers. Petco’s latest “Bootique” collection includes toys, treats and themed apparel — along with pet parent-matching apparel. Petco also is promoting an LED collar and reflective jacket to help keep dogs safe and visible during Halloween.
[Read more: Retailers retool loyalty efforts for new era]
Merchandising Savvy
A new research study from 84.51° — the retail media arm of Kroger — finds that consumers prefer to shop in physical stores for their main courses this holiday season. As a result, 84.51° suggests a targeted holiday merchandising approach to generate additional spending. This approach involves building in-store displays of related items located near the entrée items. The idea is to foster a bundling of main courses and related items while providing a discount. This may not sound like a revolutionary idea, but it’s a proven strategy that makes sense.
Price and Convenience
Last year’s holiday season provides clues for success this year, especially related to price and convenience. Walmart succeeded during the 2021 holiday period partly by driving lower prices than competitors on grocery items. Other retailers can’t match Walmart’s scale and negotiating power on price, but they can selectively offer value that drives sales.
Convenience is another important factor during the holidays, especially for consumers who delay their purchases until late in the season. Last year, Walgreens promoted its ability to support last-minute purchasing. The strategies included extended same-day delivery and pickup on Christmas Eve and Christmas Day. This kind of approach shows empathy for harried shoppers and makes a retailer into a destination for customers needing solutions late in the game. Retail winners this holiday season will be those that outperform on core competencies, such as price, convenience and merchandising. This may not seem like rocket science, but it requires very good piloting.
