Predicting Holiday 2016: Products, Pricing and Curated Lists

Holiday shopping in 2016 will be bigger than ever, but will it be better? There are a series of emerging retail trends that are destined to become mainstream this season thanks to increasing competition, promotional addiction of retailers and shoppers alike, and unsustainable direct price competition.

‘Tis the Season, But Longer
The thing about promotions is that they don’t always have to focus on price. E-commerce makes shopper activity omnipresent and transparent, increasing the pressures on retailers to stay a step ahead of the competition. However, the goal of a promotion — creating a "now or never" mentality — is slipping away as the holiday season grows to unprecedented length and anticipation.

Seasonally, this trend can be explained by the continued competitive erosion around traditionally critical shopping dates, such as Black Friday and Cyber Monday. We're seeing deeper discounting early in the season and waning competitiveness as shipping cut-off dates approach. Consider that a recent study showed that almost half (49 percent) of U.S. shoppers will have completed this year's holiday shopping before the end of their Thanksgiving meal, and more than a quarter (27 percent) will be doing most of their holiday shopping even before Nov. 1 — up 8 percent from 2015.

Instead of suffering through margin erosion brought on by extended discounting periods, savvy retailers will be limiting their exposure by saving their best deals for short bursts. Flash sales, micro-promotions by category and member-only deals will serve to reinvigorate the sense of "now or never" that those months-long discount periods remove from the buying process.

Moving Beyond Price
In general, retail winners are seeking to avoid extended head-to-head price wars. The price transparency that has been so rewarding for shoppers has had an equally negative impact on retailers. This is true in general, but is especially pertinent during the holiday promotion season.

Increasingly, retailers are looking to the selection of products they carry to protect margins and drive conversions. Sources of strategic assortment differentiation include the use of private brands, exclusives, bundles, specialty items and curated lists.

Making a List, Checking it Twice
For mid to upper market retailers whose customers value the experience and often convenience as much as, or possibly more than, price in the purchase decision, curated lists or collections are often a winning strategy, especially during the time-pressed and stressed holiday season. For example, many home goods retailers recognize that there’s a lot more dollars in selling a “seaside," “modern” or “festive” collection than piecemeal sheets, towels and fixtures. Furthermore, shoppers value not having to incur the time and risk of putting disparate items together.

During other shopping seasons, like Mother’s Day or Halloween, retailers can use similar lists to make it easy for shoppers to find gifts for everyone in their lives based on their hobbies, age, relationship and more. For many shoppers, the power of having precisely targeted items easily accessible trumps the motivational impact that a marginal price difference might have.

Keeping it Private
Private labels and exclusives serve to blur price transparency and protect retailer margins, while also delivering a unique value proposition to shoppers. I expect the use of private brands, exclusive offers and other specialty assortments to accelerate over the holidays. The recent back-to-school season saw 44 percent of Staples’ curated shopping lists for third graders to fifth graders to be private label, and 48 percent of all clothing featured in Target’s Labor Day ad was its private label, Cat & Jack. Last holiday, 56 percent of Amazon.com's self-reported top 25 best-selling electronics were the online retailer's own private brands. When even Amazon, the perceived price leader, is looking beyond price to win shoppers, it’s time other retailers took notice. Happy holidays!

Jenn Markey is vice president of marketing at 360pi, a retail price and product intelligence solution.