Stores across Canada are already preparing for Boxing Day sales, which could be posted earlier this year in hopes of attracting as many customers as possible in this time of tighter budget management.
In recent years, the flagship event for discounts in Canada has been relegated to second place behind its American counterpart, Black Friday.
However, many experts agree that sales fell short of expectations for Black Friday and Cyber Monday last month, which means that many retailers will want to empty their inventories at the end of the year.
“We’re going to see pretty good discounts for Boxing Day, because the end-of-year sales season has been quieter. We didn’t see a rush to the stores in December as we usually see, ”said Lisa Hutcheson, managing partner of the consulting firm JC Williams Group.
Even with tempting sales, consumers could remain timid in their purchases, due to the current economic context.
“Inflation has a lot to do with it; there are a lot of fears, Ms Hutcheson acknowledged. Boxing Day is mostly for people who have received gift cards and have personal purchases to make. Except that if people are concerned about their personal finances, there will be less personal purchases. »
find the balance
Retailers will therefore try to find a balance between the need to empty their excess inventories and maintain their profit margins, explained retail analyst Bruce Winder.
The greater the discounts, the greater the volume of products a store is likely to sell. Smaller sales keep margins higher, but run the risk of stores getting stuck with unsold products.
“In some cases, we can keep the inventory until next year, but it takes labor, not to mention that we still have to pay the suppliers,” said Mr. Winder.
Still, national spokesperson for the Retail Council of Canada, Michelle Wasylyshen, qualified that most retailers aren’t overly concerned about inventories — at least, not to the level that some analysts suggest.
This false impression that stores are full of unsold goods may stem from disappointing Black Friday sales.
“The general feeling is that consumers were waiting for better deals, either because they heard in the media that retailers had too many stocks, or because they had to tighten their belts because of the rising cost of life,” said Ms. Wasylyshen.
Still, stores are heading into Boxing Day with “cautious optimism.”
“The Boxing Day event is an opportunity for retailers to plan promotional events and review their inventory levels to see if they really need to go all out with in-store or online sales events. to help liquidate excess inventory,” Wasylyshen said.
Much like Black Friday, Boxing Day has become a week-long event, with fewer of the in-person door-to-door sales that once epitomized the day.
“The trend now for retailers is to extend these events so that people don’t have to come all in one day,” observed David Soberman, professor of marketing at the University of Toronto’s Rotman School of Management.
“This is a particularly important thing now given that influenza, respiratory syncytial virus (RSV) and COVID-19 are still very, very active and people are worried about it. »
In terms of the amount of discounts, Mr Soberman thinks offers are likely to be “sporadic” with products seen as more discretionary, seeing more promotional activity.
“Where retailers have high inventory, you can see really good deals,” he said. The last thing you want to do is carry Christmas and winter inventory through the first quarter. »
Loyalty rewarded
According to a recent study, retailers seeking competitive advantage will focus on customer service and rewarding loyalty.
A survey by payment service Adyen conducted by Angus Reid found that more than half of respondents aged 18 to 34 cited loyalty to stores they’ve shopped at before as the top determining factor in deciding where to go.
“The most important factor is whether it’s a brand they already know and have a relationship with,” said Sander Meijers, Adyen country manager for Canada.
“They really want to be recognized when they buy something online or in-store and to be rewarded for being a loyal customer. »
The survey also revealed that service, including speed of the checkout process, was key for many Canadians when deciding where to shop during the holiday sales.
“The speed and smoothness of a checkout experience is always a key indicator of whether or not a retail store is going to be successful during an event like Boxing Day,” he said.
The online survey of over 1,500 Canadians was conducted in early November. According to the survey industry’s professional body, the Canadian Research Council, online surveys cannot be assigned a margin of error because they do not randomly sample the population.