Despite their wishing and hoping, Christmas Eve wasn’t the saviour that the retailers expected.
In conversations with retailers, it seems that the slow retail environment carried through all the way to Christmas Eve sales. As one said to me, “This is the quietest Christmas Eve that I can remember.”
That said, it seems that grocery sales were up leading up to Christmas. Gluttony takes another form?
Or does this signal the beginning of a trend?
It may, but my suspicion is that what we are seeing is a levelling of consumption and growth. Not a correction, simply a “pull-back”.
It probably doesn’t mean that consumers won’t be buying in 2011, but it may mean that finally the majority of the population (putting aside those at the ends of the normal distribution) feel that (at least for the moment) they have enough “stuff”. You can only have so many flat-screen televisions in your house before you start to notice that you have lots of flat-screen televisions in your house.
What I am suggesting is that, at least for the time being, we are in a state of “consumption satiation”. It’s likely that this is a breather, rather than a long-term shift toward a “new thrift”, which has been suggested by some commentators.
I also don’t think the Boxing Day sales will show any upward trend, and they are unlikely to beat previous years.
Of course, there will still be plenty of people out there looking for bargains on Boxing Day, but the long-term trend is that most consumers are purchasing throughout the year, rather than waiting for sales.
It’s probably an indication of the fact that we now have access to more information about pricing, and therefore feel comfortable negotiating any time of the year. It could also be that the retailers are constantly having sales, so the blockbusters don’t have the impact that they had in the past.
Obviously, not all consumers are deserting the big stores – horse for courses, as they say (or segmentation, as I would say) – but this change in consumer behaviour is not a “blip”. It is unlikely that the retail world will ever return to the “good old days” when the retailers were in control.
The era calls for creative thinking from retailers.
What we are seeing is that small and flexible organisations are the ones who are best placed to respond to new consumer demands and expectations. The reality is that consumers simply have access to more information, have more awareness of competition, and are demanding better service, prices and products from their retailers.
I have some ideas, but it’s more than simply trying another sale. It’s about having a much deeper understanding of consumer behaviour, the social nature of consumption, and our insights into why people shop in a fragmented post-modern consumption environment.
A more detailed version of this posting was published on The Drum, ABC Online.
You can also listen to a discussion about the issue on ABC Radio National.