Full-price retailers plan strategies to woo shoppers after Christmas rush slows
As Christmas shoppers give a ringing endorsement of the economic recovery, merchants are looking ahead to the new year and to deeper issues affecting American retailing.
After the Yule glow fades, the question is: How will traditional carriage-trade retailers come to terms with ''off-pricers,'' stores with slogans like ''name brands for less''? With counter lines growing longer, will customers respond to more service-with-a-smile? Or are low prices the ultimate drawing card?
''This Christmas season is going gangbusters, really rock-'em, sock-'em,'' says Louis W. Stern, a professor of marketing at Northwestern University.
As he sees it, the only limit on sales is lack of inventory, a result of conservative ordering by retailers. Like other analysts, he looks forward to continued strength in retailing. ''But a fascinating question is whether the manufacturers can continue to produce for the off-pricers.''
During the past couple of Christmases, full-price retailers fearful of getting stuck with slow-moving merchandise offered discounts so deep that the credibility of their markups was called into question.
Off-pricers, Professor Stern explains, operate under the umbrella of the traditional stores' ''keystone'' prices, usually at least 100 percent markup, from which off-pricers calculate their discounts.
Off-pricers also benefit from traditional stores' advertising, which helps create demand for name-brand goods. ''During the last five years, retailers have been learning that keystone pricing has got them into a lot of trouble,'' Stern says.
But with consumer confidence resurgent, as evidenced in booming sales and rising installment debt, bargain hunting has become less crucial.
''Consumers are not looking for big discounts; there's general optimism,'' notes Merrill Lynch economist Debby Kuenstner.
Where does that leave off-pricers? ''Predictions are hard to make, but I think we'll see manufacturers continuing to sell to off-pricers,'' Professor Stern says. ''The off-pricers are what we call good payers. They pay their bills on time, cash on the barrelhead, and they don't return merchandise. No hassles for the manufacturer.''
John L. Cohn, executive vice-president of the Independent Retailers Syndicate Inc. in New York, concurs: ''Every major retailer has had to examine their pricing policy.''
Any shopper who has ever wandered the aisles of a department store crying out , ''Is there anyone here who can ring up a sale for me?'' will be pleased to hear that traditional stores are seeing increased service as one way to hold the line against off-pricers.
Mr. Cohn, whose syndicate buys for a wide variety of 180 independent stores and small chains around the country, says increased service is ''definitely'' something full-price retailers should try to provide, ''but it's going to be difficult.''
''Expense control'' has been the retailers' watchword in recent years, Professor Stern says. ''And this means cutting labor costs.''
Retailers across the board are trying to improve customer service without putting more selling staff on the floor - by improving store layout, for example. And Bird McCord, vice-president for personnel of the National Retail Merchants Association, notes that adequate parking and ease of getting in and out of a store ''may be more important to the customer than having someone at her elbow reading aloud the fiber content on a box of packaged socks.''
But, Ms. McCord suggests, retailers haven't differentiated carefully enough between departments that should be basically self-service and those selling unfamiliar or technical items, such as floor covering or electronics, where customers really need help. ''I think people feel that shopping is not fun. I don't think we've looked at ways to make it easier, more enjoyable.''
Shoppers, however, are having enough fun in the stores this year to ring up double-digit sales increases over last December. This season is being widely projected to be the best Christmas is several years.
In fact, things are just ducky. ''Anything with a duck motif - ties, scarves, sweaters,'' is proving a big seller, says Cohn, who is projecting a 12 to 15 percent increase in sales this year over last. Other hot items: men's and children's patterned sweaters, teddy bears, girls' dressy dresses, small clamp-on book lights, lingerie items.
''Also, items with Christmas motifs have been doing very, very well. That shows people are willing to be more frivolous, to spend money for something they'll use once a year.''
The J.W. Robinson chain in southern California is likewise experiencing ''very strong'' sales, with a double-digit increase over last Christmas, says Steven Regur, vice-president for marketing. The ''better areas'' are proving especially strong in sales, he notes - ''better dresses, sweaters, occasion dresses; Waterford crystal and other items for the home; designer-label intimate apparel.''
A carriage-trade chain, Robinson's spends ''tremendous amounts of time and money'' training sales staff and emphasizing quality, Mr. Regur says. He plays down the threat of the off-pricers. ''They are doing business, but I can't imagine how I'm going to feel it.''
Chicago-based Montgomery Ward is looking for strong Christmas sales to help the chain ''break even on the plus side'' for 1983 after losses of $160 million for 1981 and $93 million in '82, a spokesman says. Last month's sales were up 10 .8 percent over the previous November's, and early December figures are proving even stronger.
The 376-store chain has closed 13 stores over the past year and trimmed personnel 20 percent - but it has also put new emphasis on service and sales-force training.
''We're trying to really take care of the customer in the face of an economy that is forcing us to take a hard look at our employee total,'' the spokesman says.
Christmas sales nationwide are off to a strong enough start to have shown up already in the Commerce Department's November retail sales figures, $102.5 billion, a 1.9 percent jump over October.
A national survey by Manpower Inc. projects that employment in wholesale and retail trade will hold steady during the first quarter of '84, in marked contrast to the usual substantial new-year falloff, says Fritz Marston, Manpower's vice-president for public relations.
''Of the 93 industries we follow, retailing is No. 6 on the list for projected high performance,'' says Milton Schlein, associate research director at Value Line Inc.
Retailing, he notes, is a highly leveraged industry with high fixed costs - stores remain open the same hours during good times and bad, for example. So even a slight upturn in sales can generate a considerable increase in profits.