How Will the Economy Affect Retail Sales this Holiday Season?

The holiday season is a key time for retailers each year; however with the current state of the economy, retailers may have to become more strategic with how they operate in the coming months.  In a recent survey conducted by Harris Interactive, 84% of U.S. adults are currently taking steps to save money as a result of the current economic climate. According to the survey, 70% of adults are reducing their discretionary spending.  Only one-in-four U.S. adults are still willing to splurge this holiday season, given the economic times.

One key retail sector that relies heavily on holiday sales is the fashion industry, however in the survey 75% of adults said they have purchased uncomfortable footwear because the shoes were simply on sale.

So what are retailers to do in difficult economic times?  Here is a quote from an executive of Rockport, a footwear retailer, “In these tough economic times, consumers are looking for versatile apparel and accessories such as comfortable, multi-functional footwear that can be worn in a variety of situations,” said Shaye Strager. “Budget-minded consumers can be both fashionable and comfortable by focusing on one shoe that they can wear for various activities,” Strager added.

So by keeping customers informed of the product, retailers are looking to utilize product education as a strategic marketing tool.  Another example of this can be found in the sports manufacturing industry.  In order to help drive increased retail sales, Rip-It Sporting Goods has launched a large-scale instructional portal in order to provide a value added service which will have the added bonus of driving consumer awareness of their brand and product.

So this holiday season, watch for retailers that take the initiative to provide value-added services to consumers, they will be positioned the best to weather this difficult economic storm.

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