The holiday season, defined by the National Retail Federation as November and December, is the biggest time of year for retailers of all shapes and sizes.
The NRF estimates the period can account for as much as 30 percent of a retailer’s annual sales.
For a small, local retailer like Haughton’s Margo’s Specialty Flower and Gift Shop, it holds true that holiday buying is the lifeblood.
“In the gift shop, it’s really important. It’s actually my busiest time,” said Margo Williams, owner.
For Margo’s store, a gift and home decor outlet as well as a florist shop, said the holiday season accounts for 1/3 of her overall business in the gift shop side of her business.
“The Christmas profit is usually what I use to buy most of my yearly inventory for the next year — Valentine’s Day and Mother’s Day product, and just new things for the store to keep people coming back.”
With a lower unemployment rate, people earning more money and cheap fuel and food prices, the pieces are falling into place for a more robust holiday shopping season.
This year, NRF estimates that holiday sales will increase 3.7 percent to $630.5 billion. That’s above the decade’s average increase in holiday sales of 2.5 percent.
The signs are there that consumers are loosening their purse strings. The personal saving rate fell to 5.7 percent from 6.2 percent, according to government data, while consumer confidence figures rose to 89.8 percent in September, up 2.6 percentage points from the same time in 2015.
To help get buyers in the door, Margo capitalizes on the time of year by holding her annual Christmas Open House. Scheduled after Black Friday, the event is time to get retailers who are tired of or done with large retailers.
This will be her seventh year to host the event and will feature 20% off everything in the store, door prizes and free refreshments.
“It’s something that a lot of people have come to expect from me,” said Margo.
And small to midsize retailers like Margo who focus on niche products have been successful with a collective annual sales of $200 billion over the last five years according to national analytics firm Deloitte.
While things are slow heading into the holiday buying season, some of that can be attributed to uncertainties surrounding the election. Those are expected to evaporate once all the votes have been tallied and retailers will be able to make it up, just in time for the most critical shopping days.
However, the biggest buying day of the year, Black Friday (the annual shopping holiday that features massive discounts on the Friday after Thanksgiving and even spreading into Thanksgiving night), is really a non factor for Margo’s business.
In her experience, Black Friday is not for small retailers.
“It’s (a big deal) in the big stores…For me it’s nothing. I don’t even open on Black Friday anymore,” said Margo.
On the flip side, she said Small Business Saturday (a retail movement marketed to get shoppers into local retail stores, held on the first Saturday after Thanksgiving) is starting to gain traction.
“It’s still not really out there yet, people haven’t gotten the concept yet. But it’s picking up.”
Consumers’ addiction to discounts is a challenge for retailers as lower prices means they have to sell more units. That’s why Margo has sales events like the aforementioned Open House and has to try and target her merchandise to the consumer’s whims.
“It’s a guessing game every year. I have a big variety of stuff, so I think that helps for when people come in,” she said.
This story was first published in BIZ. Magazine