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Retailers Think Out of The Box This Holiday

Friday, 19 Nov 2010 | 12:00 PM ET

Retailers are flexing their promotional muscles for the holiday season by wrapping their marketing campaigns in some unlikely packaging this year, from new “grab-and-go” gift shops at Macy’s to new flexible payment options at Sears.

"The economy has been tough, the consumer is still very catalyst-driven in terms of how they're shopping and it's still an environment where people are competing on price," said Amy Noblin, a senior analyst with Weeden & Co.

Macys at Jersey City decorated for holidays
Source: Macy's
Macys at Jersey City decorated for holidays

To drive business and make further productivity improvements, retailers are having to get creative, Noblin said.

So retailers are putting a fresh spin on deals by harnessing the power of Facebook, wooing consumers on their smartphones and by offering new discounts and payment options for recession-weary shoppers.

Others are looking to appeal to new group shoppers with a wider variety of merchandise.

Macy’s , for example, has rolled out gift shops akin to what would be found in a specialty store. They’re designed to take the guesswork out of gift giving and appeal to time-pressed shoppers on a tight budget with low-priced, trendy items that are even pre-wrapped.

These shops, in 400 Macy’s stores, appear on the main floor and include everything from metallic candles and popcorn makers to chic, hip cell phone covers and sweet hair barrettes. The average price of an item is under $20, most are priced under $50, and stocking stuffers start as low as $3.00.

The shops are a departure for Macy’s as they’re aimed at an edgier customer—rather than its traditional shopper—“who is looking for different, exclusive, crazy, fun and kitschy things—which is a whole new layer of gifting that doesn’t compete with anything that we’re doing,” said Martine Reardon, executive vice president of national marketing for Macy’s.

“It’s about picking up more incremental business,” she said.

The retailer has also bowed celebrity gift shops for the holiday that spotlight exclusive items from Macy’s designers, such as Martha Stewart, as well as international gift shops with merchandise from the Rwanda Path to Peace and Heart of Haiti programs. Proceeds from gifts such as hand-woven Rwandan baskets and artisan home décor from Haiti go towards feeding, clothing and educating the families of these impoverished nations.

Macy’s charitable gift initiatives reflect the growing trend toward cause-related marketing, as shoppers increasingly want their purchases to reflect more than their own consumption.

According to the just-released 2010 Holiday Trend Tracker report from Cone, the cause-marketing firm, nearly 89 percent of consumers want companies to support causes this holiday season. In addition, 49 percent of Americans surveyed say they have already purchased or plan to purchase a holiday gift that supports a cause this year.

The New Deal

Merchants are also tapping technology to drive traffic, Noblin said. “The movement online and to mobile is strong as evidenced by things like Facebook Places.”

Retailers such as , American Eagle, the Gap and Macy’s have signed on for the new Facebook Deals, which brings shoppers special offers when they check into Facebook Places on their smart phones.

With its test of Facebook Places during November, Macy’s, with over 600,000 Facebook fans, hopes to attract a new “tech-crazed” shopper that is tethered to their mobile device and is “very engaged in anything Facebook,” Reardon said.

Sears and Kmart are among the retailers launching eGifting on Facebook, which allows users to purchase and send between $5 and $25 in eGift gift cards to a friend’s Facebook account or e-mail address. These are great for last-minute gifts as they are posted immediately.

J.C. Penney'scustomized Facebook pageis integrated into the retailer's main Web site. The company also features gift ideas with its weekly obsession item and a way to purchase gifts for children and senior citizens in need through its Salvation Army "Angel Giving Tree."Other features will roll out over the holidays, including a Facebook gfiting app that allows customers to share stories and get shopping advice.

Just as Facebook is changing the way retailers market, mobile is “revolutionizing” the way people shop, said Mike Boylston, executive vice president and chief marketing officer for J.C. Penney.

To that end, the retailer is launchingm.jcp.com this holiday, a mobile commerce site that features the chain’s entire product assortment so that users can make purchases on its main Web site directly from their smartphone.

Shoppers stroll around at the newly decorated Christmas floor at KADEWE department store in Berlin, Germany.
Getty Images
Shoppers stroll around at the newly decorated Christmas floor at KADEWE department store in Berlin, Germany.

With the rise of smartphones and tablet computers like Apple's iPad, the consumers’ “rate of mobile adoption [to shopping] is even faster than it was to the Internet,” he said.

For one, the retailer has found that most shoppers prefer to now get their coupons sent to them directly on their smartphone. But the company also is looking for other new places to put coupons, including on the backs of New York City Metro transit cards in the weeks leading up to Christmas.

Then there are the new twists on old-school retail offers to sweeten the deal.

Last month, Sears introduced the Sears Monthly Payment Option, which allows shoppers to spread payments over 48 months.

And Target is offering shoppers five percent off on nearly all purchases made with its Target REDcard in the store and on Target.com.

“This innovative, new initiative will provide Target REDcard holders with tremendous value on our exciting merchandise assortment,” said Terry Scully, president of Target Financial Services, in a statement.

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