Ho, Ho, Kapow: Stores Take The Gloves Off Early

Walmart/price cuts

Just in time for the turn of the calendar page, discount retailers are cutting holiday prices, making the kind of offers normally reserved for Black Friday.

Wal-Mart Stores, for example, announced additional rollbacks as an incentive to holiday shoppers, cutting the prices on 100 toys by as much as 20% to 30%. Target, based in Minneapolis, is offering free shipping on purchases of $50 or more. And Kohl's, breaking its price-focused holiday marketing campaign this week, is already touting the type of early-bird shopping events and extended hours usually reserved for late November and December.

And all of this is happening before most consumers have put away their Halloween decorations.

"Stores learned an important lesson last year -- the ones who discounted early and strategically gained market share," Doug Hart, a partner in the retail and consumer product practice at BDO Seidman, which just released a poll of retailing CMOs, tells Marketing Daily.



While last year's discounts became almost desperate as the weeks wore on, stores this year have had time to put together a more methodical approach to promotion. "This year, it's much more strategic," he says. "We'll see deep discounting early on, in order to drive people through the doors. But we can expect less panic."

Retailers are definitely playing on shoppers' strong desire to stay organized and budget-driven this year. Wal-Mart, for example, says research has shown that more than 50% of mothers hope to finish shopping by Thanksgiving, so it will continue to offer aggressive pricing on toys.

Such cuts are evidence that consumers are motivated by special promotions, and not just low-prices-every-day positioning, says Hart.

Kohl's, for instance, based in Menomonee Falls, Wisc., has said it is focusing on a strategy called "stackable savings" -- allowing shoppers multiple ways to save, such as special sales during special hours, or special prices for consumers using a Kohl's card.

Despite the earlier promotions, the BDO Seidman poll reports that retailers are mostly upbeat about the season. BDO Seidman polled the CMOs at the country's largest retailers, and found they expect both overall sales and comparable-store sales to gain this holiday season -- up 2.6% and 1.4%, respectively. And 60% expect to see a "meaningful" turnaround in the economy by the second quarter of next year.

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