Retailers rejoice: a robust economy and a resulting surge in consumer spending should make this Christmas season among the most profitable in years. At the same time, merchants need to come up with attractive price points and compelling sales messages, because shoppers will be doing more than their usual amount of comparison shopping.

“Consumer confidence remains high,” says Bob Phibbs, a retail consultant based in Coxsackie, NY (retaildoc.com). “And we are now on the other side of the election, so that uncertainty is behind us.” Furthermore, shoppers are not expected to be preoccupied with other expenses. “Employment is surging ahead, and interest rates and gas prices remain low,” points out Al Meyers, a retail innovation consultant at Kalypso, Cleveland (Kalypso.com). “As a result, there’s no reason we shouldn’t have a halfway decent holiday season.”

Trim prices
Before ringing too many holiday bells, though, retailers need to realize that shoppers will be bargain-hunting. “The nation has been experiencing many high-profile store closings,” says Phibbs. As a result, consumers will be expecting retailers to reduce prices. “It’s going to be harder to communicate compelling messages beyond discounting.”

Just as challenging as a product supply glut is a rapid growth of ecommerce at the expense of brick and mortar stores. Aggressive promotions by online retailers will put more downward pressure on prices. “Retailers are going to have to come up with promotions that shoppers can’t get on the web or from Amazon,” says Dave Ratner, a speaker and consultant on retailing based in Agawam, Mass. (daveratner.com).

Package deals
What to do? Ratner suggests beating the price-watchers at their own game: Assemble packages of related merchandise that offer eye-catching discounts while boosting your average ticket sale. “In all of your promotions you should try to do kits,” says Ratner, referring to such grouped merchandise. “You will be a lot more successful selling batches of related merchandise than selling add-ons to a base item.”

Ratner likens this approach to that of package deals in the travel industry and the “luxury” offerings of car dealers. You also might offer discounts for the purchase of two or more items of the same kind. Because this increases rather than trims revenues, it’s a much wiser move than offering discounts on a per-item basis.

Target key shoppers
Avoid making the mistake of competing on price alone. You must differentiate yourself by communicating an exclusive reason to shop at your store rather than all the others. Just as important as the presentation of package deals is drawing in the right shoppers. “It’s important to target promotions to specific demographic groups,” says Ratner.

One of the best ways to do that is the use of social media. Ratner points specifically to Facebook, where retailers can send messages to groups of people identified by age, occupation, and even location. “You can buy Facebook ads that target people within five miles of your store, to various occupations, hobbies and genders,” he says. “And the costs are so much less than the old days of print ads and mailers.”

And speaking of targets, how about aiming at local organizations that can do your marketing for you—or at least help substantially? “Make deals with your local schools, churches or other organizations,” says Ratner. “Do promotions that will appeal to their members, and give the organizations a cut of the sales. They will end up promoting your merchandise for a cut of the profits.”

Dress for success
Employee training, of course, is equally vital. “The biggest mistake is to load up with part time people who barely know how to ring up a sale, then fail to train them and then get mad at them for not engaging with customers,” says Phibbs. “You need to start training people early.”

Personnel make up half the battle. The other half is the creation of a sparkling, festive store environment. People love to shop in a happy place. Packing your store full of the holiday spirit will make the cash registers ring a happy tune. “Anything you can do to make your store more fun than the big guys is a big deal,” says Ratner. “Have your employees dress up to make your store festive for the holidays.”

Decorate with festive banners, garlands, and evergreen branches. Add pine aroma and quiet, tasteful holiday music. Replace your light bulbs and make sure the whole place is well lit.

Interactive signing throughout the store can be effective in directing shoppers to holiday merchandise, says Meyer. “Emphasize suggestive selling and promotions as people pass by the screens.” Provide more signing at the point of sale to give shoppers what they need to know to make a decision. “Once people are in your store you do not want them to see empty shelves,” says Ratner. “Display your merchandise in imaginative ways so people are encouraged to walk around the store.”

Bonus tip: Provide small baskets so people can carry a lot of small items to your cash registers.

Nail the sale
Once they get to the checkout, customers will be open to one final sale. That can make the difference between profit and loss for your store. “Promote an item at the checkout, selling for under $10, that is an easy impulse item for people to pick up,” says Phibbs. “Make it something people don’t have to think about. Add a compelling sign that says something like ‘The gift you forgot.’”

Bonus tip: Set up a system for bringing merchandise to the customer’s door. “Retailers are going to have to offer delivery,” says Ratner. “Consumers have become used to that from the ecommerce merchants.”

How about your own store? The ideas in this article will help you put in place some profit-boosting ideas to catch the public eye. For more tips see the sidebar, “Stocking Stuffers for More Sales,” and pick the ones that look right for you.

If you develop a compelling sales message, trim your prices, and promote package sales to targeted shoppers, the result will be a profitable Christmas season. “You have to know your customer, communicate why people should leave their houses and come to your store, and really focus on those four walls to create an exceptional experience,” says Phibbs. “That takes a lot of work. But what other choice do you have?”