It’s still more than three months to Christmas, but already advertisers and agencies are in full swing for the Christmas period. But, with a slowing Australian economy and a generally dismal prognosis for the retail sector what can we expect from Christmas campaigns this year?
“Christmas is critical to retailers because they take a disproportionately high share of sales during that time compared to the rest of the year,” says M&C Saatchi retail marketing director Jon Bird. “They also sell more full-price merchandise which contributes significantly to the bottom line.”
Bird says there has been a change in recent years in the way advertisers approach Christmas. “We can actually think about Christmas for retailers more as the ‘holiday season’, which stretches from November through to January,” he says.
The increasing importance of January as a sale period has led to an increase in the sales of gift cards as Christmas gifts, according to Bird.
Stuart Mitchell, marketing executive at Nikon, agrees that advertising this Christmas period will be more price-driven.
“I think we will see price points as a big part of the Christmas advertising this year, particularly for the larger retailers,” he says.
Christmas is easily the biggest time of the year for camera sales says Mitchell, with figures three times as high during the festive season.
This year Nikon will be putting a lot of its marketing dollars into a joint promotion with Westfield shopping centres in the lead-up to Christmas and will be doing little promoting post Christmas, preferring to leave that to the retailers, explains Mitchell.
Overall, retail sales for the Christmas period are concentrated in late November and the weekend before Christmas according to Australian Bureau of Statistics data for 2007, with the only area to thrive mid-December being the online retailers. Online sales reached a new peak last year and are expected to again rise this Christmas.
But away from the online shopping, traditional retailers such as Myer will still be heavily marketing its selection of gift products explains Paul Bonnici, director of marketing and creative at Myer. “We will ensure that we deliver the promise of choice to our customers in the way we market the brand and visually merchandise our stores to ensure we offer the best choice of merchandise,” he says.
As in previous years, Myer will be releasing a specific Christmas campaign across all media, with events and in-store promotions as well. “We are also investing in a brand new Christmas decor package across all stores,” Bonnici says.
In recent years Myer has focused its campaigns on Christmas as a gift-giving event embracing family, friends and lifestyle. A new focus this year will be to reward Myer One customers with special shopping nights and value-added gifts, says Bonnici.
Ann Charter, group account director at Love Communications, says despite economic conditions people still want to make Christmas special for their loved ones. “But they are approaching their shopping quite differently. There is much more pre-planning than last year with people actively comparing offers and looking for additional value,” she says.
According to the Australian Retailers Association and Deloitte, 20% of shoppers planned to start shopping a week before Christmas in 2007. While shoppers are leaving it later and later according to M&C Saatchi’s Bird, Charter says retailers are starting the push earlier and earlier. “Given the heavy emphasis on comparison shopping we think early impact is more important than ever,” she says.
While most would agree advertising products as gifts is easy, Charter says this year will be different because according to research more people are looking at practical gifts, not luxuries. “It certainly doesn’t seem the year for frivolous spending,” she says.
Charter expects a heavy emphasis this year on in-store sales programs and incentives as opposed to general advertising campaigns.
Those who do advertise can expect a typically cluttered market, with more people advertising not only for Christmas but also summer activities.
“You could argue that a successful Christmas campaign is harder because you have to avoid the obvious and lazy,” says Robbie Moore, business director at Singleton Ogilvy & Mather Sydney.
Adam Peruch, trading director at Ikon Communications, says a variety of Ikon’s clients have a peak spending period in the lead-up to Christmas and January.
Ikon is already “well and truly” into Christmas preparations for a lot of its clients, but has also seen a lot of retailers holding off promotions until after Christmas.
“January is a new shopping experience for retailers because of sales and back-to-school purchases,” Peruch says. He agrees that this year will be interesting for retailers as they are presently struggling and believes they will do one of two things. “Firstly, they can spend any funds they have to attract more shoppers or keep marketing dollars in their pockets.”
He says if retailers could find something that was considered a “must have” item such as an iPod, then this could drive consumersto stores.
In terms of media spend, Peruch says some retailers might be looking to spend less than usual but actually getting more TV air time because summer is a non-ratings period. However, this could be counter balanced if there is a large increase in the amount of advertising being done by those who saved up for Christmas marketing.
As in previous years, Christmas advertising will be in-your-face and everywhere – but this year the economic climate is set to affect both creativity and spend levels. n
