My friend Debbi, who a few months ago was perusing Ballard catalogs as she pondered redoing her kitchen, is hunkering down. She has put off the remodel, and is painting the cabinets and buying new curtains instead. And she is telling her family and friends that this Christmas will be “different.” She’s not turning into Scrooge. Debbi has always loved Christmas and that hasn’t changed. She still plans to throw her annual bash, and will still buy presents. But Debbi, debt-free with no financial worries to speak of, is taking everything down a notch.
“I feel very anxious about what’s going on,” she told me. “I lie awake at night and worry while my husband snores away.”
As it turns out, Debbi is not alone. A new survey, by
In the survey, the vast majority (83%) of women reported that their spending habits have been impacted. The changes range from cutting back on dining out and vacations to scrimping on basics, with a majority (59%) cutting back on “unnecessary spending.”
But women are still willing to make small purchases to give themselves a boost. Beauty products (18%), manicures/pedicures (18%), chocolate (16%) and shoes (10%), were the most popular choices for comforting, small purchases.
As to how Debbi and a lot of other women will shop this holiday season, there is little mystery: They are trading down. It’s all relative, of course. My cousin, who is a devoted Neiman Marcus and high-end boutique fan, is shopping stores like Bloom-ingdale’s and Banana Republic instead. But a more cash-constrained friend plans to limit her gift-buying to just three stores this season: Target, Wal-Mart and Dunkin’ Donuts (for gift cards). Gift cards for beauty salons, restaurants and even supermarkets top the shopping lists of several other friends.
Even my younger pals are being more cautious. A friend’s 19-year-old daughter and her long-time friends normally go all out buying holiday gifts for one another. This year, however, they have decided to do a grab bag (limit $20) instead. (Young adults, ages 18-24, are cutting spending the most, according to the National Retail Federation’s annual shopper survey.)
What’s a retailer to do—besides hunker down like my friend Debbi? Most industry experts seem to be focusing in on the obvious: the importance of using sales and promotions to incentivize shoppers. Wendy Liebmann of WSL Strategic Results offers up a different point of view. She says it’s important that retailers not act like Chicken Little if they expect to get shoppers to spend in the current climate. Trimming inventories, cutting costs and the like will only get a company so far. Retailers need to look for ways, however small, to get shoppers into their stores. Among her strategies:
- Feel their pain: The old messaging won’t work, according to Liebmann. You need to let shoppers know you understand what they’re going through, and that you will help them any way you can.
- Brighten their day: Shoppers need a little extra levity and excitement.
- Make trading down and cutting back cool and profitable: Try taking a page out of TopShop’s playbook and put a vintage or pre-owned department in your store so shoppers can trade in—or even trade up.
There is little doubt that value will dominate this season. But retailers, as Liebmann suggests, need to look beyond the obvious, and go the extra mile to bring shoppers—and themselves—some holiday cheer.