The Dysfunction of December
Do you ever wish that you could just turn back the clock when it comes to the Holidays? It seems like every December my siblings and I harken back to Christmases past and pine for those memorable holidays of yesteryear. We recall fondly the magic of the season the gifts under the tree and the closeness of family minus of course the dynamics that were sure to follow in later years. We just wish December could be like it used to be. I’m not talking about Uncle Ned passing out in his Yorkshire pudding from too much egg nog or not getting the gift from Santa that was #1 on your list but rather all of the fun happy times. We selectively block out what we perceive as negatives and remember the good times through our own personal filters.
Retailers’ Selective Memory
I believe that most retailers are guilty of this every single year. Even the most disciplined merchant seems to have selective memory when it comes to sales and inventory forecasting during the Holidays. Can we all agree in principle that the years of December being dedicated to full price selling and clearance markdowns being taken in January are over and have been over for a long time? We are in a new era. This year we experienced greater discounting in December than any time that I can recall. MAP pricing violations were observed by retailers and vendors alike. I am aware of at least one vendor who ran afoul of their own MAP policy by breaking price on the company website and expecting retailers to not follow suit. How crazy is this getting?
Commit to Your Buying Plan
While the December of 2015 is still fresh in your mind make a New Year’s resolution to commit to your buying plan knowing that you really have no control over factors external to the business. Thinking you can manage areas outside of your control is like putting your inventory dollars on #7 and spinning the Roulette wheel. You could get lucky but most likely you will end up losing money.
External Factors You Can’t Control
You can’t manage the weather the possibility that a social protest may block your street and store entrance or how the stock market will perform. You do not know if the Fed will manipulate the interest rate what the unemployment rate will be if your health insurance premiums will change how high the minimum wage will be or who might win the Presidential election. The point is to take control over the things you can manage.
A Shift in Mindset
I propose a complete shift in mindset. Forget how you “think” or “wish” December business should be and plan for what it WILL be… a strong albeit Promotional month. Begin by setting the stage with vendors NOW for a successful December next year.
Holiday Open-to-Buy Strategy
I would suggest considering a breakdown of Holiday open-to-buy dollars for next year as follows:
Naturally this will vary based on the segment of the retail industry that you operate in. This approach will enable you to compete on a more level playing field. With a slight paradigm shift I believe December can become less stressful and more functional once again.
Wishing You Well
I wish all of you a Happy Healthy and Prosperous New Year!
Ritchie Sayner
Article Summary
The article reflects on the nostalgia for past Decembers contrasting them with the current retail environment marked by heavy discounting and shifting sales strategies. It emphasizes the need for retailers to adapt to the new reality of December as a promotional month advocating for strategic planning and a mindset shift to manage controllable factors effectively.
“Forget how you ‘think’ or ‘wish’ December business should be and plan for what it WILL be… a strong albeit Promotional month.”
Real-World Examples of Selective Memory in Retail
The concept of selective memory as discussed in the article is prevalent in various industries particularly retail. Here are some real-world examples illustrating this phenomenon:
- A large department store chain remembers only the successful holiday sales of past years while ignoring the patterns that led to overstock and heavy discounting in January. As a result they continue to overestimate demand and face similar issues annually.
- An electronics retailer focuses on the high sales volume achieved during Black Friday overlooking the subsequent slowdowns and returns in December. This selective memory leads them to repeat aggressive promotions without adjusting inventory levels appropriately.
- A fashion brand recalls the popularity of a specific holiday collection from previous years failing to account for changing consumer trends and preferences. This results in unsold inventory and the need for deep discounts to clear stock.
