Customers push a Samsung television to their car outside of a Target store in Jersey City, New Jersey, on Nov. 27. Heading toward Christmas, the planned promotions are over and stores still have plenty of inventory. Especially if you’re looking for clothing, opportunity awaits the savvy shopper. (Photographer: Michael Nagle/Bloomberg)
When it comes to trumpeted promotions, this has been quite the year for holiday events. We’ve had pre-Black Friday specials, Thanksgiving, Black Friday itself, Cyber Monday (and Tuesday), Small Business Saturday and now “Green Monday” (a new one I just heard of today. It’s getting hard for me to keep up!)
Apparently “Green Monday” is the extra promotional day eCommerce retailers have slipped in to offer special deals, mostly around free shipping.
The problem is, like anything we see or hear repeatedly, consumers have become habituated to hearing the discount song. Sure, digital sales are up, but overall, sales are below plan and stores still have lots of inventory.
Now the real fun begins for consumers.
As fellow contributor Walter Loeb pointed out last week, retailers are about to hit the panic button. The planned promotions are over. Inventory still languishes on shelves. We’re entering the heart of what I call the game of “Markdown Chicken,” and retailers have flinched first yet again. Especially if you’re in the market for some clothes….opportunity knocks.
  • Old Navy has ramped up to 60% off site-wide with free three day shipping.
  • Abercrombie and Fitch, a retailer who once vowed never to take markdownseven at the height of the Great Recession is offering 40% off orders more than $200 plus free shipping, if you shop online
Macy’s has embraced the Green Monday concept and is offering free shipping plus an extra 20% off on any order over $25…plus an extra 15% off selected departments. Guess what kids? Most consumers know that countdown timer or no countdown timer (as I write this, there are 15 hours and 35 minutes left to go), prices aren’t going to rise tomorrow. The only deadline is when the carriers are willing to guarantee they can get the product to shoppers’ homes by Christmas.
Even electronics retailer Best Buy BBY +0.00% is driving “Green Monday” deals, including free shipping. Most fascinating to me about that particular retailer is discounts on Apple AAPL -0.89% products. It’s not a devious sort of strategy like “get a $100 gift card.” It’s a straight up Apple Holiday Event. Did even venerable Apple overproduce for this holiday season? Wow.
Other retailers like Nordstrom JWN -1.85% and Urban Outfitters are a bit more muted in their sales strategies. Nordstrom highlights free delivery by Christmas and gently suggests gifts at lower prices. Urban goes slightly further, touting “Best of the Season Sale” in stores and online. You get the sense these retailers have less inventory to liquidate.
To effectively play the game of Markdown Chicken, there are two questions consumers have to ask themselves, 1) Am I willing to settle for a “less than perfect” match for what I want, and 2) Am I willing to go to stores, rather than shop on line? If the answer to these questions is “Yes,” you can still afford to wait. Expect 70% off sales at many retailers and a shopping frenzy to get the deepest discounts.
Truth be told, you can totally bet the house and buy gift cards for your friends and family. It’s not for nothing that December 26 has become one of the biggest shopping days of the year. In years when inventory is light, I would never suggest this strategy. After all, in a perfect world, once the returns are processed, stores should be stocked with new spring merchandise at full price. This year, with sales down and inventory up, it’s a viable strategy, as long as those friends and relations understand it’s not just a lazy way to give a gift, but a really economical and clever Markdown Chicken tactic.
Bottom line, this year retailers have put themselves in a very tough position. I’m predicting this season will represent the height of promotional frenzy and we’ll see a stepping back next year: lower inventory, fewer Thanksgiving Day store openings, and a return to some level of normalcy. It’s not for nothing that 47 stores opted out of Thanksgiving this year. It’s really not a money-maker.
One last thing: As I advised a friend last week, I wouldn’t wait until February for that “great deal.” By then, it’ll all be over but the shouting. Start Tuesday, and continue through mid-January. And that will be that.
This is the year to take maximum advantage. Next year just won’t be as easy. Enjoy the game!