A little more action: Holiday sales robust in 2009

Perhaps the best thing that can be said about holiday 2009 is that merchants get to compare it to holiday 2008 — the worst season for retail sales in decades.

And when that is combined with much lower expectations going into the season, most merchants managed to easily beat last year, and many made their sales plan, or at least they came closer.

Figures vary as to how the season officially ended, but the National Retail Federation's preliminary 2009 holiday findings at press time indicate that sales rose 1.1%, to $446.8 billion. Not only is that better than the NRF's 2.8% decline for the 2008 season, it beats NRF's initial projection of a 1% drop for 2009.

Among the publicly traded companies, multititle kitchen and home furnishings cataloger/retailer Williams-Sonoma says its net revenue for the eight-week holiday period ended Dec. 27 increased 7.4%, to $783 million.

The company, which includes the Williams-Sonoma, Pottery Barn and West Elm brands, says its direct sales for the period reached $282 million — up 9.7% over 2008. The merchant's total sales and direct sales were both down 23% for the period in 2008.

Luxury products retailer Neiman Marcus Direct reports that sales for December were up 3.2%; last year they were down 9.2%. The merchandise categories that performed the strongest for the direct unit this past holiday season included women's fine apparel, shoes, jewelry and handbags.

“We worked very hard all year long to keep customers engaged on our sites and in our catalogs,” says Neiman Marcus spokesperson Ginger Reeder. “We also increased the gifting focus of our Christmas Book, driving higher productivity per page.”

While it wasn't exactly the year to spend lavishly, luxury products did seem to rebound. High-end jewelry and tabletop gifts cataloger/retailer Tiffany reports that its combined Internet and catalog sales in the U.S. increased 17% for the two months ended Dec. 31. The company's total worldwide sales for the period also rose 17%, to $799.1 million; both direct and worldwide sales had slipped 21% for holiday 2008.

In particular, “the luxury sector benefited from a horrible 2008 holiday,” points out Neil Stern, a retail analyst and senior partner for retail consultancy McMillan Doolittle, “so their numbers are also looking better by comparison.”

Lifestyle apparel and home goods merchant Urban Outfitters — one of the few success stories from 2008 — says total company sales for the two months ended Dec. 31 increased 16%, from $389 million in 2008 to $452 million in 2009. Its total sales for the period last year were up 9%.

The Philadelphia-based company, which includes the Anthropologie, Free People, Leifsdottir, Terrain and Urban Outfitters brands, saw its direct-to-consumer sales rise 28% for the period, vs. a 25% increase for 2008.

BEATING THEIR PLANS

Women's apparel cataloger Boston Proper reported a holiday sales percentage increase in the single digits against its plan. But president/CEO Sheryl Clark says the merchant saw a double-digit increase “in the teens” compared to last year.

The company didn't make any significant changes or additions to promotional strategies for the holiday. “But we strategically changed our resort book to a ‘Holiday 2’ book, and gave the customer great ‘wear now’ and gift options,” Clark says. Boston Proper's annual Winter Sale book, which was mailed in three drops — Nov. 19, Dec. 3 and Dec. 17 — performed “significantly above plan and last year, she adds.

Boston Proper's total circulation was flat to last year, Clark says, but the mix changed, with house circ up 5% and prospect circ down 5%. “We did not shift spending away from catalog circ, but we did increase our online marketing spend somewhat,” by about 5%, she notes.

Gary Giesler, president/CEO of AmeriMark Holdings, says company holiday sales rose 8% over plan and 24% compared to last year. In general, “2009 was a record year for the AmeriMark Holdings family,” he notes.

So how did the cataloger, which sells home healthcare products for seniors via its Amerimark and Dr. Leonard's Healthcare titles, do it?

Giesler credits modeling circulation plans and a continued focus on targeting the merchandise to the customer needs. Total catalog circulation was up just 3% over last year, but of that prospecting increased 31%.

Amerimark scaled back its use of free-shipping offers from 69% of orders in 2008 to 56% in 2009. But it did boost its use of proprietary credit offers from 16% of orders in 2008 to 29% in 2009.

Baking products cataloger King Arthur Flour ended the holiday season with sales well above plan, says director of online services Halley Silver. “We believe that this is due to the current back-to-basics mentality of consumers, and as a flour/baking company, we are positioned to benefit from this.”

Silver says the company adjusted its marketing plan this year, increasing circulation 5%, and using a prospecting strategy based on reactivating lapsed customers. “We did not shift any money to or from online channels,” Silver says. With e-mail marketing, “we were flat in terms of both schedule and number of mails sent, but we saw greater efficiency and ROI.”

Silver says King Arthur offered fewer promotions. “We ran fewer storewide sales, and instead ran more merchandise-specific promotions. We focused on a stronger mix of educational and inspirational e-mails and Web features that kept our followers engaged — and hungry!”

NOT MAKING THE GRADE

Mailers that cut back on catalog prospecting did not fare as well. Learning Resources, a manufacturer/marketer of educational products and toys, did not meet its original forecast, says direct market catalog manager Mike Peters. At press time, it was still too early to tell if the campaign met the company's revised forecast.

“Our holiday 2009 sales were down from 2008 holiday sales overall — partly due to a lower mailing strategy, but largely due to the economy,” Peters says. The online strategy did exceed the planned budget by 16%, however.

Peters says Learning Resources revised its fall/holiday catalog mailing plan in early 2009. “Instead of testing several outside lists, we opted to focus our mailings on our known buyers and do very little prospecting.” The merchant cut its overall prospecting efforts by about 85%, “which included eliminating our fall catalog mailing.”

The marketer concentrated its print efforts on two holiday mailings to its buyers and a limited number of prospects, Peters says. To capture new parent e-mail addresses, it added an inkjet message to prospect catalogs with a special offer for prospects providing their e-mail addresses.

Learning Resources increased e-mail frequency and invested in paid-search placements and SEO, Peters says. “We added customer reviews to both the catalog and online, which has been successful for converting sales.”

Social media played a big role as well: It promoted products through social networks, including Twitter, Facebook and YouTube, Peters says. “We posted videos on our home page showing our marketing team using their favorite products with giveaways to viewers who became Facebook fans, and we posted special keywords from the videos.”

Foods Across America's holiday sales were flat compared to last year. “We think they were the same, as we changed our marketing plan this year compared to last year, and we reached out to a new potential customer base,” says vice president Tracey Stone.

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