Nov 6, 2008

This holiday season, retailers better be wary of the surly shopperBy Shannon ProudfootCanada.com

Retailers are turning on the charm in an effort to coax credit cards from the wallets of financially stressed customers this holiday season.

“Retailers are looking at the market today the same way their customers are,” says Peter Woolford, vice-president of policy development and research for Retail Council of Canada. “They live in the same world their customers do, so just as customers are standing nervously on the edge of all this uncertainty and trying to make sense of it, so are retailers.”

Some stores have already launched campaigns intended to show consumers they understand this year is different.

Wal-Mart Canada says it dropped the prices on its top-selling toys earlier this year than ever before, while Shoppers Drug Mart recently offered shoppers $10 or $20 restaurant “food cards” with purchase. On select weekends, Sears Canada has started offering interest-free payment reprieves until 2011 for big-ticket purchases, while some U.S. retailers are bringing back the layaway plan.

Future Shop launched its holiday promotions a week early this year and its online Gift-o-meter suggests gizmos for a range of budgets and degrees of tech-comfort.

“The consumer last year was confident, was ready to spend. It was about, ‘Let’s have a little fun,'” Woolford says. This year, the message of choice appears to be “‘We make your dollar go farther here,” he says.

Kevin Groh, director of corporate affairs for Wal-Mart Canada, says that since stock markets began lurching this fall, its stores have seen new groups of consumers join the usual bargain-hunting crowd.

“We’re seeing (big sales of) household basics like paper towels on the one end, but we’re also having great success with our flat-screen TVs,” he says. “There’s no question, economic woes lead people to our doors.”

Ernst & Young predicted this week that while Canadian retailers will see a steady flow of customers through their doors, they’ll be picking up “more modest” gifts than in flusher days, perhaps opting for DVD players or GPS systems instead of LCD TVs or high-end cellphones.

But in a year where many will be pushed to spend more than is comfortable, price is only part of the equation, says Rob Daniel, managing director of retail research firm Maritz Research Canada.

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