It’s beginning to look a lot like January, even with nearly a week left until Christmas. Retailers started post-Christmas markdowns extra early this year.
Deloitte analyst Jason Gordon explained it this way: “There’s a finite amount of spend. If one of your big rivals goes on Sale, you don’t have any choice. You’ve got to get your share of the action, otherwise it’ll go to your competitor and be lost. It’s a game of chicken and there’s only going to be one winner – the consumer.”
Of course heavy discounting carries a price, particularly the time of year when retailers typically earn much of their margins. Not only are retailer margins slimmer, but discounts can devalue the brands on deal.
What is notably not on promotion this Christmas is the iPad2 and iPhone 4S, reminding us that it’s more important than ever for marketers to create products with real meaning. A recession is a litmus test for meaningful brands (as I sketched in this Share of Wallet cartoon in 2009).
Thanks for all of your continued support and encouragement in 2011. Happy holidays, everyone!
(Marketoonist Monday: I’m giving away a signed print of this week’s cartoon. Just share an insightful comment to this week’s post. I’ll pick one comment by 5:00 PST on Monday. Thanks!)