Retailers rush to stave off Christmas blues as SMEs brace for discounting bonanza

Seasonal pickling and wreath-weaving workshops are just some of the goodies on offer for shoppers walking into Tracey Bailey’s retail stores this Christmas as the independent retailer looks to keep one foot ahead of the market.

The end-of-year promotional period is just around the corner for Australia’s retail sector, and after a tough year, business owners are hoping for a bumper trading period.

Bailey’s Biome Eco stores are preparing to go the extra mile for the holiday season, running additional workshops across its six stores in Queensland, NSW and Victoria in the hope of driving increased store traffic and sales.

“Our Christmas-themed workshops, particularly the Christmas wreath ones, have been selling well,” the retailer tells SmartCompany

“During the Christmas shopping period, it’s particularly important for us, as an independent retailer, to generate as much customer interest, traffic and sales as possible to keep Biome at the forefront of customer’s minds.”

Evidence suggesting customers will be keeping a tighter grip on their wallets this Christmas continues to pile up, while retailers themselves are paring back their expectations.

Deloitte’s annual pre-Christmas retail survey, released today, finds only 62% of retailers expect to see higher sales this Christmas compared to last year — down from 80% in 2018.

Meanwhile, amid expectations of heavy discounting with Black Friday and Cyber Monday just around the corner, just under 40% of retailers said they expect to see profit margins decrease.

“Many have pinned their hopes on federal government tax cuts, but the latest trading data suggests consumers have chosen to keep any windfall in their pockets. Retailers are no doubt hoping they’ve been saving up for Christmas,” Deloitte’s retail expert David White said of the figures in a statement.

The growing popularity of November shopping holidays in Australia drove back discounting activity by several weeks last year, causing headaches for many traders which experienced a subsequent slow period in mid-December.

The concern is shoppers will gear up on cheap goods before December even starts, making it even harder for independents to convince shoppers to open their wallets in the crucial weeks leading into December 25.

It’s a worrying sign for a retail sector already contending with difficult conditions, and while many larger retailers are able to participate in extending periods of discounting, smaller firms often struggle to keep up.

But White says cautious shoppers have created an opportunity for retailers willing to go the extra mile and bring “good old customer service back to the fore”.

“Over a quarter of respondents highlighted customer service as the most important driver of sales this Christmas, just behind digital and omnichannel offerings,” White said.

“These two strategies aren’t mutually exclusive. Forming a strong digital connection with the consumer is critical to building trust in the brand, regardless of where the customer spends, and this connection to the customer flows through to loyalty.”

How is your business planning to shake up Christmas this year? Let us know: news@smartcompany.com.au.

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