Retailers that focus on price will lose out in crucial Christmas shopping period

Retailers must use aspirational campaigns to communicate their convenience and service to shoppers if they are to win the Christmas shopping battle.

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It may seem early to be talking about Christmas, but marketing for the holiday period is already kicking off. In store, there are shelves full of mince pies, mulled wine and Santa-themed wrapping paper. Plus the TV ads have started, with Morrisons firing the starting gun with an ad to promote its ‘Big Christmas Bonus’ offer.

But what is the right marketing message? With the British Retail Consortium describing consumers as “cautious” earlier this week and retailers suffering their worst monthly sales performance this year in September, it might seem that price will be the key battleground over the coming months.

Yet the BRC is warning retailers to manage their promotional activity carefully, while both P&G and GlaxoSmithKline are warning against unsustainable value giveaways, suggesting a focus on value creation rather than price.

Their views are backed up by a study by global consultancy Simon Kucher and Partners of more than 1,000 consumers which found that, even online, consumers do not cite “lower prices” as their primary motivation for shopping.

Instead it is all about investing in service and infrastructure, ensuring that retailers can get access to the products and services they want when they want them.

You need only look at recent moves by the big retailers to understand the secret to satisfying customers. eBay and Argos recently tied up to offer eBay shoppers the ability to pick up their goods in Argos stores, while AO.com launched a same-day delivery service.

There has already been a slowdown in discounting rates, with the average price of non-food items falling 2 per cent in September, an improvement on August figures. This now needs to be reflected in marketing messages.

Price will always be important and increases in the cost of living and poor wage growth mean consumers are still choosy about how and where they spend their cash

Yet despite this the economic outlook is improving and positivity is returning to the high street and so retailers must make sure they don’t make it all about the price. Consumers don’t want to return to the days of constantly being battered by the latest price drops and promotions.

Instead, retailers should look to be aspirational, making customers feel good about the brand and boosting brand equity.

Value is about more than just price, it is also about convenience and customer service and the shopping experience. Retailers that play to those advantages in their marketing message will win out over Christmas and in the long run.

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