How to leverage consumer shopping habits, gift cards, and weather patterns to increase retail sales.
2006 retail results to date reveal shoppers are still open to being engaged by new retail concepts and services, says Annette McEvoy of independent specialty retail consulting firm Annette McEvoy & Associates. "After a respectable December, January results impressed due to the redemption of all-time-high sales of holiday gift cards, while February results rewarded those who went to special lengths to engage and service the customer." Here, McEvoy highlights several retail opportunities to watch.
Stop and Shop
According to McEvoy, customers are selecting shopping destinations primarily around two criteria: convenience and aspiration. "Shopping formats that deliver on both fronts will continue to win, such as the new open community center shopping clusters that feature a mix of aspirational specialists, restaurants, big-box specialists, maybe a Whole Foods store, and no department stores," says McEvoy, who adds another good example is Target, which offers consumers both what they need and what they want.
According to an NPD Group consumer survey, more than half of all holiday gift cards from a specific retailer were fully redeemed (meaning the entire face value was spent) before the end of January 2006, leaving many gift cards in the hands of buyers waiting for new products to arrive in stores later in the year. There also exists room for growth in this category beyond the traditional holiday gift card. Notes McEvoy, "Giving a gift card no longer is perceived as lazy; it's simply thoughtful to choose one's favorite store, restaurant, or entertainment venue. Not to mention, customers generally up their intended spend level when it's there for the card recipient to see at the cash wrap." Retailers, she continues, can experience Christmas throughout the year and pace incremental sales via cleverly crafted gift card programs.
"The warming and storming pattern we have experienced over the last few years is something fabric manufacturers, vertically integrated apparelists, and retailers must try to get a better handle on," says McEvoy. Engaging reputable weather prediction services to aid in buying outerwear or stocking new fabrics that self adjust to varying degrees of wet, dry, heat, and cold are just a few of McEvoy's suggestions.
Known primarily as a leading multichannel retailer of quality apparel, outerwear, sporting gear, and home furnishings for outdoor enthusiasts, L.L. Bean, Inc., for example, warms up to the weather trend with an exclusive line of apparel from The Weather Channel. Available via L.L. Bean retail stores, catalogs, and the company's Website, the line—which launched with a waterproof and windproof three-in-one jacket (shown at left)—marks The Weather Channel's first foray into licensed apparel. Additional products in the line will be available in summer and fall 2006.