Planning for Increased 4th Quarter Competition
by webmaster — October 7, 2010
Target and Wal-Mart are getting ready for the 4th quarter “no holds barred cage match” which kicks off Black Friday, the day after Thanksgiving. It’s no fun being caught in the crossfire of two behemoths, especially when both giants are vying for the all important 4th quarter sales.
Both retailers made announcements recently of the rollouts of their new formats, Wal-Mart with their new 20,000 square foot hybrid of Marketside/Neighborhood Market in New York City and San Francisco. Target announced their plans for a 60,000 to 90,000 square foot new format in Seattle.
You also may have seen the recent announcement that Target is offering a 5% discount on all items in their stores that are purchased with the Target credit card. In the past, we’ve worked with retailers on similar, short-term promotions; it appears that Target is making their 5% discount an ongoing, permanent program.
The Target credit card 5% discount will likely be a game-changer.
To begin, the Target credit card has always played a role in Target’s continuity efforts. The Target grocery initiative is so large and sweeping that they need a strong lure for grocery shoppers. We already know Target will be price competitive; coupling Target’s strong pricing model with a 5% discount makes for a great launch campaign.
Long term, any shopper with interest on their credit card loses, and this could be Target’s Achilles heel. The industry shakeup is not complete, but from where Target pulls shoppers will have a major bearing on who survives and who does not.
We know there are numerous loyalty programs available to grocers; the loyalty program we’ve touted is not card or credit card based (see DW’s take on customer loyalty programs)
So what can an independent retailer do to stave off the increased competition from Wal-Mart and Target in the 4th quarter?
- Ground your promotional activities in October, November and December by dramatically increasing the focus on your key differentiating points—namely, you don’t need 140,000 square feet to put great food on the holiday table.
- If there’s ever a time that you can promote your community connections, it’s the 4th quarter. Sure, Wal-Mart and Target can boast of the millions they trickle down to local communities, but they will never have the same opportunity you already have with neighborhood connections. How do you amplify this? With well-planned events, both in your store and outside your store.
- Use ROP ads and in-store “bouncebacks” to bring in new customers and keep them coming back.
- Plan your social media promotions and messages today! If you’re using social media to announce your weekly ads, it’s time to move onward and begin using social media to do more for your community bond.
- Get local media coverage on community events. You shouldn’t be planning community events simply to get local news coverage. If your heart is in the right place and you’re genuine in your concern for the hungry in your neighborhood, you’ll get attention to help you reach out to those in need this holiday season.
- If you’re not already involved in school activities during the 4th quarter, check into sponsorships for the holiday programs. With widespread cutbacks in school funding, it’s likely your local schools could use some sponsorship this holiday season.
- Talk to community based organizations about ways you can help them during the holiday season. Schedule different organizations each week to promote their cause inside your store (vs. outdoor soliciting) by offering gift wrapping stations , gift basket assembly, party tray sales, etc.
- Encourage local schools to feature their holiday music in your store on the weekends. If the first grade choir shows up to sing holiday music, be sure to provide each participant with a complimentary gift card to your store as your appreciation gift.
Between Target shoppers maxing out their Target credit cards and noticing the high credit card interest rates, and Wal-Mart failing to service the throngs of shoppers this holiday season, you have an opportunity. It’s an opportunity that doesn’t arrive at your doorstep without proper planning and execution.
If you’re interested in exchanging ideas on a comprehensive marketing plan for the fast approaching season, contact me today and we’ll discuss some options.
Filed Under: Company News