Lose it Forward

I didn't plan to spend a lot of time writing about Christmas shopping, but there is an undercurrent of discontent as so many levels or the retail world this season, it needs review from many directions. Here's mine.

While shopping this past weekend I witnessed the seeds of destruction for the New Year Sales being planted. This was big home accessory store, and to drive sales they were having a 50% off sale on all Christmas items. The manager must have been under pressure to get sales levels up higher because he came on the PA system and announced, "take an additional ten percent off on all items purchased between now and closing."

The immediate result was that all customers who had completed their purchases ran back the cash registers and customer service counter and demanded their "additional ten percent off" which resulted in an wave of confusion washing over the cash registers. The check out lines slowed to a crawl as the cashiers had to cancel the previous sales and reenter them manually with the additional discounts.

The next thing that happened is customers began grabbing more Christmas stuff. So now the main stock for the "after Christmas sale" was flying out of the store before Christmas. I heard customers even comment on the fact they are going to get such a jump on next year's Christmas shopping now, they may not have to shop the New Year Sales.

A perfect example of "Lose it Forward."

As I watched, what I began to think of as the "Titanic Sale," continued to slide along the iceberg. Three shoppers who had already paid and left the store, came back after their friends told them about the additional discount. The three of them went to customer service and demanded the additional discount also. The manager approved it.

So now the cashiers are once again tied up canceling sales and re-keying them to reflect the additional discount causing lines to back up again. As people waited in line, two customers abandoned their shopping carts and walked out the store.

However, the floor traffic picked up as two women called several of their friends still shopping in different stores in the complex and told them about the 60% off sale.

Let's go to the root cause of this sale in the first place. To my mind, one of the main reasons sales are down is lack of Christmas spirit in the stores this season. I am not the only one saying it. In addition to numerous business reports saying the same thing, millions of consumers are saying it as well by where they decide to shop.

Most of the reporters are reporting flat to slightly negative floor traffic. The Internet stores are reporting about a 26% increase in sales over this point last year.

With traffic down, the sales are starting earlier this year. By January the public is going to be "sale weary" and traffic will drop further causing the "panic discounts" to get bigger earlier in the shopping period after Christmas and New Year. The newspapers will report another disappointing holiday shopping season – the fifth in a row.

The earlier sales and bigger discounts are going to kick start "Lose it Forward" into high gear as the media begins reporting a lack of "follow through" in January sales numbers as retail floor traffic continues to fall.