How Best Buy, Target & Nordstrom Executed Their Holiday Shopping Strategies

When I was in Minneapolis for Thanksgiving, I effected my own informal holiday shopping survey. I took a look at the crowds and merchant behavior and came, pretty much, to the same conclusions as Steve Rowen, one of the RSR principles, who wrote of his experience and observations in "Black Friday Boston: The End of an Era." Rowen wrote that Black Friday had changed to the point of being unrecognizable from what it was just seven years ago. He conducted his own informal survey in Boston at 1pm on Black Friday to a Target store in Everett, Massachusetts, and "the not-so-nearby" Natick mall. He found the post-Thanksgiving Day Target store less busy than a typical shopping day, attributable to the fact that the store had been open and decimated by Thursday's sales. "The deals were long gone and so were the people," wrote Rowen. Nevertheless a quiet Target was open as usual the day after Thanksgiving, which implies extra costs had to be incurred for the special opening time, but at what price?

Rowen then drove to Natick, a tony shopping area where "shoppers can browse Barney’s and Tourneau for $25,000 watches or purchase a $90,000 Tesla Model S." Even with valet parking, he couldn't get close to the shopping center. "Thanksgiving is rapidly becoming a holiday for people who can afford it," Rowen concluded.

Here are some vignettes from my informal shopping survey in Minneapolis:

On Saturday evening, Dec. 7, the night I arrived in Minneapolis, we had to go to Target to buy an air mattress. We expected the store to be busy before Thanksgiving, but it wasn't. We received help immediately from one of the higher-level staff, who not only pointed out the best buy and price for the air mattress we sought, but then proceeded to tell us about Target's price match policy, cartwheel app (Target's mobile coupon app that has more than 2 million users), and in-store pick up of items ordered online. The staff people in the store, including the checkout people, were VERY knowledgeable and forthright about their products and services.

The advantages of a store like Target is that they offer commodity items, so that all the shopping can be done in one store, despite some price differences, so the price match, while sounding good, doesn't come into play too often.

On Thanksgiving Day, as we drove along Highway 894 to dinner at relatives', we saw people camped out at Best Buy to be the first for whatever sales were going to be offered that evening. (BTW, it was an extremely cold day, even by Minnesota standards).

On Friday, Saturday, and Sunday after Thanksgiving, I observed moderate car traffic and moderately quiet shopping malls. Inside the mall, I felt no special atmosphere or urgency about Christmas shopping.

On Monday, Dec. 9. I went into an Apple Store (in a Minneapolis suburb) to buy a new mouse and to get more information about the iPhone I had received before leaving Madison (Apple, Amazon, Price Optimization, Customer Service & Me). The mall was pretty quiet -- and I didn't have too much trouble getting service at the usually busy Apple Store. I noted that the median age of the customer in the Apple store appeared to be around 60; that is to say, people with the means to buy these products.

After Apple, I made a point of stopping at the Best Buy standalone store on the other side of the mall. The store was quiet that day. I walked right up to the mobile help counter to talk about smartphones. The person who helped me, about 30 years old, was extremely knowledgeable and proactive. He was very well prepared for any question or need from a customer.

 "How's business?" I asked, knowing about all of Best Buy's efforts to turn itself around with better use of its space, price matching, in-store pick up, and better customer service. He replied with statistics of how much Best Buy stock had improved over the last month.

"What about showrooming?" I asked. "We INVITE showrooming," he said. "And we are a pick-up station." I asked about the availability of an unlocked Samsung Galaxy smartphone. "We don't carry them in the store, but I have an idea," he said. "Perhaps The Mall of America, being an international destination for shoppers, will have an unlocked phone." He immediately called as I stood there, and came right back to me. "No, they don't have them," he said… but I was extremely impressed by the customer service I had just received.

Nordstrom, as you know, follows its own, well-thought-out and executed strategy. Nordstrom and Costco were two major retailers that did NOT open on Thanksgiving evening -- and did not appear to suffer for it, maybe even benefited.

Nordstrom recognizes that the store operates in a social community and must serve customers in an enhanced way both in the store, and especially on its web site. The company now gives customers options that include buying on-line with pick up in-store, free shipping and returns, and special private sales for ecommerce customers. Some of the fulfillment of orders is done on the selling floors in order to insure that the customer gets her merchandise quickly. All locations now have Wi-Fi for customers, many associates have mobile point of sale (POS) devices, and the company continues to enhance its personalization effort, which bolsters its sterling reputation for customer service.

Nordstrom also has arrangements with online retailers like Bonobos and Haute Look, for in-store return of their Internet purchases.

"I believe that Nordstrom can sustain growth through its thoughtful modern approach, dedicated staff, and understanding of today's consumer," wrote Forbes' contributor, Walter Loeb.

"(Nordstrom) Management has shown great strength not to participate in the Thanksgiving madness," wrote Loeb, adding: "I hope that next year greater sanity will return to more retailers."

Bottom Line For A Retailer's Bottom Line:

* Many retailers did their homework for the holidays and put strategies in place to meet the competition, especially from online retail. Whether they will get an "A" on this assignment remains to be seen.

* Stores like Target that opened at the end of the day on Thanksgiving, may have been busy and made sales, but probably at the cost of duplicating their efforts by being open, but not busy, on the following day.

* Where, when and how people shop may not be price per se, but whether people have money or not.

* Cyber Monday was true Cyber Monday, enjoying the biggest online sales figures ever.

* Conclusion (shared by Steve Rowen, Walter Loeb, and me): 

Holiday shopping will never be the same again!

 

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Gilon Miller, CMO

About Author

Gilon is a seasoned marketing, sales and business development executive with over 15 years of experience in the software and Internet business. He is the Founder and CEO of GuruShots. Previously, Gilon was the CMO of Upstream Commerce, VP of Marketing at iMDsoft and Director of Global Marketing at SAP. He earned an MBA at the MIT Sloan School of Management and a BS in Electrical Engineering from Tufts University.
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