christmas tree made of books

Tis the season for points of differentiation.

Here at Retail Remedy we do tend to hark on about differentiation, normally when we are being bombarded by the normal pricing tussles between the grocery retailers.

The Big 4 do have different offers, not just what they range but also how they range it, marketing messages, loyalty promotions etc. but it is normally the price that gets all the attention in the retail press and in any article comparing one retailer against another.

The recent Black Friday activity was all about price. The stores were overwhelmed with marauding customers wrestling over cut price TV’s that despite being ridiculously cheap, were probably still not great value for money (but that’s just our opinion). The point is that it was the price that led the promotion, and nothing to do with any other aspect of the offer.

The downside of course is the effect on margin as the customer is becoming conditioned to expect large discounts in the peak Christmas trading period. Retailers, and we aren’t just talking grocers here, must invest in other aspects of their propositions in order to protect margin and give the customer another reason apart from price to shop with them this Christmas.

Retailers must shape their own Christmas story and not be pulled down into the pit of heavy discounting. That story should be packaged in a cohesive compelling marketing strategy that stretches across sales channels and across all departments in the store.

Perhaps it hinges on luxury, a key selling point at Christmas obviously and one that Lidl are doing well to exploit across TV advertising, social media and on pack branding despite its discount price positioning.

Perhaps it hinges is on nostalgia, like Sainsburys WW1 advert and unique chocolate bar. That said Sainsburys has not extended that message beyond the confectionery aisle and the rest of the store appears adrift. They could have taken the nostalgia theme right across the store into different departments with POS and limited edition novelty lines. Maybe next year.

Perhaps its hinges on something that the retailer has already notched up as a success, like Waitrose and the Great British Bake Off uplift. The marketing campaign centres on homemade ginger bread cookies and pride in your achievements, reflecting on the partnership business model of Waitrose and John Lewis but also traditional Christmas family values. In store cookie decorating brought the ad to life and connected the ad with the shopping experience.

There will be winners and losers over the Christmas trading season, which we could go some way to predict already, in part due to current grocery trading trends but also due to their marketing strategy. The more points of differentiation and cohesive the marketing strategy, the better the retailer will do. Of course having the right stock in the right place at the right time also helps, but we’ll save that pearl of wisdom for another blog post.

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