Marketing strategies used at Christmas

Posted: December 7, 2013

Turning holiday no-no-no’s into ho-ho-ho’s: Marketing strategies that sell Christmas

Alarm set for 2:00 am. Check.  Clothes set out in advance. Check. Credit cards in the wallet. Check. On your mark. You’re ready. Set. Go shopping from 3:00 am – 6:00 am for exclusive early shopping 50% bonus discounts at Giant SuperStore. The holiday shopping rush is on.

“I always go black Friday shopping,” said Autumn Simpson, freshman. “One year I was in Nordstrom’s Rack, and a girl was pulling a dress. I really liked it, so she put it down, I grabbed it really quickly. When she came back to get the dress, obviously it was gone, and she saw me holding it. It was really awkward,” said Simpson, “but I bought it.”

“I camp out for the early bird specials,” said Jaymi Michael, 28, a graphic designer for Utility Brand, a Minneapolis brand marketing agency that regularly helps clients with their seasonal campaigns. “I love the exclusive shopping days for loyalty customers. I get my best deals this way. Last year, I picked up a brand new 50″ television for my husband and saved $300 in the early hours. Macy’s has special sale days with coupons. I wait for those days, use my coupons, and I’ve found amazing gifts this way.”

During the holidays retail marketing experts say the objective is to keep customers loyal as well as to entice new customers to try a product. If a manufacturer or a retailer retains a shopper’s loyalty, that’s the start of success. If those same companies can entice you to switch from a competitor, that’s the icing on the Christmas cookie.

But what do they do? How do they entice consumers to buy their product or shop their store? What marketing strategies work on consumers?

“Depending on the type of product or retailer, discounting is the number one way companies entice shoppers to buy during the holidays,” said Bob Safford, Founder and CEO of Joia All Natural Soda. Safford, a seasoned marketer, previously for General Mills and in leadership roles within the advertising industry, adds that a number of strategies that retailers and manufacturers use to get consumers to buy but a few are really tried and true. “Early discounts, exclusive product, limited edition only available during the holidays, gift with purchase and gift cards are among the best hooks to get people to buy at Christmas,” added Safford.

Simpson said that holiday discounting has helped keep her “very brand loyal.”

“I definitely always go to Macy’s because I think they have the best sales,” declared Simpson. “Things are up to 70 percent off, so you can get really nice things for a very, very good deal.”

Experts agree that strategies like gift-with-purchase or purchase-with-purchase, dubbed GWP or PWP in marketing lingo, and buy-one-get-one (BOGO) rank among top marketing approaches.

“The most tempting deal is buy-one-get-one free,” said Ella Fredrickson, freshman. “I mean anything with the word ‘free’ in it is appealing. Plus, it’s a great way to get a present for a friend and yourself or two friends, depending upon how generous you are. Also, I have a sister [Marin Fredrickson, sophomore], so it’s cool when we don’t have to pay for everything together.”

Designed to extend shopping behavior and the buying season into the New Year, gift card and gift certificate programs are a tried and true promotional strategy. Safford shared one of the most successful gift certificate promotions ever helped McDonald’s restaurants extend purchases into January, typically a slow month for them due to consumers wanting to start dieting programs.

“McDonald’s created their gift certificate program because people stopped eating their food in January. Everyone went on a diet, right. So, the gift certificates were given at Christmas and people stopped into eat in January, helping increase their sales.” If little Tommy had gift certificates and wanted to eat lunch, the whole family went and spent money. Also, Safford says, the restaurant enjoys “slippage,” an industry term to define the amount of certificates that go unredeemed. That’s money kept in the store’s pocket.

“Target offered a free $5 coupon toward a book, movie or game to shoppers who showed up November 21 at 8 am to buy the Cities 97 Cities Sampler collector’s CD,” said Kathy Roseberry, owner of Intemark, a national partner marketing agency based in Minneapolis and New York. “Target had a limited supply. Scarcity drives consumer excitement and the thrill of the hunt is on. That, combined with a gift-with-purchase, makes a winning combination.”

Retailers live and die by the holiday season, so they make substantial investments to generate in-store excitement, according to Tom Tessman, Vice President, Advertiser Solutions, Nielson, a company that tracks advertiser campaigns and consumer purchasing.

“If you’re a retail store, like Target, the holiday season represents huge sales period, so you spend a lot of money to drive customers into your store, so increasing your advertising spend is essential,” said Tessman, “But, it can be very expensive because trying to break through all the clutter in the marketplace is tough. So they have to get creative and really smart with their promotions.”

Manufacturers create custom product designs, like a uniquely colored item, and offer it to a retailer as an “exclusive” available only at that retailer. This creates demand for the retailer and still sells the manufacturer’s product. Manufacturers also offer retailers deep discounts in exchange for end aisle displays and ads in their store circulars.

“Walmart started the holidays with a very early price match guarantee,” shared Tom Tessman. “You can shop with confidence at Walmart, and if you find the product cheaper elsewhere at any point during the holiday season, Walmart will put the price difference on a Walmart Gift Card. Very smart, because the gift card will drive you back into the store again for more purchases. Retailers are willing to sacrifice profit margin so they can keep their customer base.” Best Buy is on record saying it will not be beat this season on pricing, and they are willing to sacrifice margin and profit to protect traffic and sales.”

Faced with an abundance of promotional strategies, the shopper who understands how holiday marketing works could outsmart retailers and manufacturers and get a good bargain. Have you ever been tempted to buy something you didn’t want during the holidays just because it was on sale?

“Not really,” said Anna Nelson, 35, a self-professed shrewd shopper. “I’ve tried things, like a special coffee flavor or a bought a really nice candle for a friend, small things, but, I buy gifts I want for others and myself. I just look for the very best prices on them.”

So, it appears, deals prevail.


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