The countdown to Sept. 1 tariffs officially is underway and U.S. retailers understandably are hoping yet another tweet from President Trump calls the whole thing off before time expires, sparing the 77 percent of apparel, textiles and footwear produced in China from impending 15 percent duties. But if tariffs are imposed as planned, consumer spending could spiral—and drag the economy down with it.
For now, many retailers are preoccupied with figuring out how the all-important year-end holiday season will fare with so many variables in play and rumors of a recession rippling through the stock market. But is retail set to capitalize on the holiday opportunity right in front of it—Labor Day Weekend?
Sourcing Journal turned to Mousumi Behari, who leads the digital strategy practice at digital services Avionos, to find out why Labor Day Weekend sales should be a priority for retailers looking for profits before tariffs could potentially rewrite the consumer spending landscape.
Sourcing Journal: Given that there’s been so much back and forth with the trade war and tariffs, could consumers take advantage of Labor Day sales as a “last hurrah” before retail prices are at risk of rising?
Mousumi Behari: “If the trade war and tariffs kick in, they will impact apparel and electronics, which are typically high-in-demand items. Though unlikely, some retailers may choose to absorb the increase in cost to not deter their customers. Other retailers may potentially try to delay showing the increase until the holiday season. Consumers could take advantage of this year’s Labor Day sales by purchasing apparel, iPhones and even toys, as many of these items are imported from China and stand to suffer the largest price increases.”
SJ: What kind of messaging should retailers use as a call to action this Labor Day Weekend (LDW)? How can retailers leverage their digital channels to drive consumers to stores?
MB: “Labor Day historically signifies the end of the summer season and the start of school. This Labor Day Weekend, retailers should consider an integrated marketing approach. They should utilize social media to boost messaging and inspire the customer to either come into the physical store or make an online purchase. Promotions both online and in-store are great calls to action. Messages on Twitter, Instagram and Facebook that are targeted will be beneficial to keep retailers’ products top of mind for consumers.
Retailers can also capitalize on the virtual-to-reality path by informing customers of in-store specials digitally, and then maximizing customer experiences once shoppers arrive at the brick-and-mortar location. Retailers could offer in store features, such as stylists to help shoppers pick out new outfits or even give free makeovers. Sephora does this well by having makeup artists do makeovers for customers in-store, which almost always leads to upsells. In addition, retailers could consider partnering with other companies in an attempt to become uber-local and offer faster delivery speeds during this weekend. For example, retailers can work with Uber or Lyft to deliver packages, as customers are looking for instant delivery options today.
Finally, for those retailers with mobile apps, they can utilize push notifications to create last-minute promotions either in-store or online to engage the customer. By leveraging technology both online and in the physical store, and offering unique promotions or special deals, retailers can take full advantage of this Labor Day weekend to increase profits and boost customer loyalty.”
SJ: Which kinds of retailers—mass market, department stores, specialty, etc.—stand to reap the greatest benefits this LDW?
MB: “Big-ticket items, such as laptops, do well during this time because of purchases made for the back-to-school season. It’s also a good time to buy appliances such as dishwashers or even grills, because retailers are trying to make room for newer models that typically come out toward the end of September or early October. Mattresses and summer furniture also do well with sales, as they make room for newer items. And consumers are more likely to purchase these items in the physical store—in fact, 58% of online shoppers say they’re most likely to buy big-ticket items like furniture or electronics at brick-and-mortar locations.
Labor Day also marks the end of high-tourist season. This could be a great time for consumers to score a quick vacation deal (especially to Europe), where it starts to get slightly colder and less crowded. During this time of year, retailers offering travel apparel and accessories would be wise to offer specialized deals and discounts on their products, bringing shoppers either online or into the physical store.”
SJ: BOPIS has done very well for a lot of high-profile retailers and especially during the November/December holiday season. Does the trend carry over into other holidays like LDW?
MB: “Buy Online, Pick Up In Store is a powerful tactic to get people into brick-and-mortar retail locations. Retailers should be strategic by placing the pick-up stations further into the store so that customers will have to walk through the aisle and perhaps pick up other things they see.
This is a smart move because according to our recent ‘Consumer Expectations in 2019’ report, 58 percent of consumers say they’re most likely to make unplanned purchases in physical stores. Another tactic that stores like Target and Sephora utilize is by putting smaller novelty or travel size items by the checkout that quickly lead to upsells. This could be a great way to get rid of summer seasonal items during Labor Day weekend at a discounted price.”