The soft side to the Christmas rush

Every year between the September 30 and the November 30 I receive telephone calls from chief executive officers, managing directors, merchandising directors, sales directors, category directors and marketing directors that work for major retailers and manufacturers within Australia and New Zealand.

Each year the calls are calmly placed and the caller and I are right on the edge of a professional nervous breakdown! They say stress is defined as the feeling of being out of control, and when you can’t see, hear or feel what’s going on you most definitely feel out of control. I had my first two calls of the season this week.

During this time we are between the planning and implementation phase which began back in early to mid-2010. We are also in the lead up to the huge and intense sales period that delivers so much of our country’s profits in the Christmas and New Year period. Australia is not unique in this sense but we are certainly well represented in the top 10 ‘compressed profit period’ table.

In the last 90 days of the year, all of those plans come to life. In those 90 days, billions of dollars of printed point-of-sale, store catalogues, billboards, print media, TV commercials and online advertising all starts to come alive to support the billions of dollars of stock that is arriving in store. This awareness activity and wave of stock is married together in store by billions of dollars worth of labour costs.

In retailing maths, the formula is: awareness + stock = increased sales. If you remember your maths from school, all good maths equations provide two of the variables and you have to work out the last one. At the moment each player in the game has their own two variables. They know how much they have spent on awareness and how much they have sold or bought in depending if they are a manufacturer or a retailer.

What everybody wants to know, what every telephone call is about is this: how are sales going out there?

Well as of this morning, as you read this blog, the answer is ‘soft’.

Why? Well it could be that we haven’t got into our shopping stride as yet and come the last week of November we will start our Christmas rush in our normal way.

However, there may be other factors that are contributing; a surprise interest rate rise on Melbourne Cup day, challenging weather up and down the Eastern seaboard and an increase in online purchasing thanks to the Australian dollar being at parity with the US dollar.

As the weeks ahead roll out, I’ll let you know how ‘compressed’ our Christmas sales will be.

In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.