1.  Those who don’t have to do without, won’t.  Luxury spending is on a steep rise despite the down economies in the US and Europe.  Three years of a deep recession and 9%+ unemployment aren’t dampening the spirits of the bulls-eyed 1%.  Even NY State’s Governor Andrew Cuomo won’t hit the millionaire wallet and handbag.  States need every taxpayer they can get.

2.  Ecommerce, the at-once General Admission concert seats and genteel private entrance, will continue to capture increasing growth and wallet-share.  Led by search online and directed increasingly to handheld devices and tablets, consumers at home get the guilty pleasure, special discounts, free shipping and radically improved shopping experiences that they rarely get after sitting in traffic to get to their favorite retail store.

3.  Brands that integrate their marketing channels will win.  Consumers think they are already.  Most aren’t.  Those that don’t may not see what’s happening underneath their sales numbers given the likely positive Holiday growth numbers.  Like most consumer-led disruption, though, future declines won’t be polite.  Just ask NetBook manufacturers and the company trading under the symbol NFLX (Netflix).  Click here for the latest in multi-channel whitepapers.

4.  People want to donate.  They really do.  When will nonprofits understand they have to earn the right to capture those dollars?  Social media, search, mobile and display media are well-worn channels that the commercial marketers have proven.   If they took the least productive 10% of their year-end marketing and spent it to develop online brand credibility and downstream donations, wouldn’t it make nonprofit brands more relevant?  Internet time is a 2:1 ratio.  For every year of delay, it’s 2 years of catch-up.

5.  Consumers will become more loyal to their favorite brands, especially in the luxury sector.  All of the years of print ads have worked to embed strong loyalty and emotional connection.  Luxury brands aren’t making a mistake…they’re following the numbers.  Online display ads, at least today, still can’t grab and grip a customer like a provocative ad with Scarlett Johanson staring back at you.  Have you seen the Vanity Fair article?  Can tablets bring more allure and connection as print advertising continues to fade?  Amazon’s Fire, Apple’s iPad and HP’s unit numbers think so with 19.5 million sold in 2010.  So do I. Click here for the latest Luxury Brand study.

6.  Catalogs matter.  So does direct mail.  Mail is the ultimate push media given its ability to finely target the perfect prospect. No channel can cost-justify itself without its direct sales impact on website and retail store sales, and inbound telephone calls.  Why can’t the Post Office understand math’s most basic variable cost calculation?  As advertising costs go up, return-on-investment goes down which forces channel choice.  Without it, direct mail loses more than it wins.  No channel can cost-justify itself without its direct sales impact on website and retail store sales and, oh yeah, inbound telephone calls.  Lest we forget, 26.4% of the population is age 45-64, and baby boomers are buying (see Prediction #1).

7.  Email is back and growing, especially with the 55+ crowd.  Social media is hugely important and influences all, but the channel carries 2011 targeting and lifecycle-triggering capabilities along with its circa-2002 simplicity.

I’ve just returned from two retail-focused conferences (the Shop.org Annual Summit and another NYC apparel-focused show).  The overriding theme at both was that value will be the predominant message of the holiday.  Those who promote value and whose message resonates with customers will win, and those who don’t will miss out.

Today we’re on the cusp of the holiday, but back in July, Kmart was already promoting their Christmas tree section.  At the time, I read a few articles criticizing the retailer for pushing the season, but I don’t think that was Kmart’s sole mission.  Rather, the offer in Kmart’s aisle was layaway, an old fashioned practice whose time is once again appropriate.

I don’t know how this campaign did for Kmart, but it would have been nice to see some other merchandisers testing it. I’ve debated the layaway issue with other retailers and have been told that Bill Me Later is already offered on many websites.  But the fact that one option enables you to take the merchandise now and pay later and the other requires you to make payments before you can take possession seems very different to me.  With tight credit and a prevailing climate of frugality, the latter is an offer that would appear to fit the moment more.

During Fashion Week there was lots of discussion that luxury will never again be what it was.  I don’t know if that’s true, but I do think it will take a long while to come back, and it’s no secret that current luxury brands are having difficulty.  Last week I heard Norma Kamali speak about her three fashion lines – her high-end Made in the USA fashion brand, her mid-range EBay line, and her low-end Walmart line in which her highest priced item is $35 with $25 being the average.

Norma Kamali at Walmart

Kamali was as excited about her Walmart brand as either of her other two lines, and I think she’s definitely nailed the value equation that’s prevalent today.  From a marketing perspective she is covering all ends, which is smart (and a little risky) but with the appeal of her low-priced clothing so huge, she is definitely strategically aligned.  High-end designers who are not considering lower-priced options are going to be far less relevant this coming holiday and possibly for years to come.

It’s easy to finger luxury as an obvious sector who’s going to take a big hit this year, but all the mid-tier brands that are more affordable for the masses (Gap, American Eagle, Victoria’s Secret) are also going to struggle unless they, too, can appeal to consumers with a strong value message.  People are hunkering down not necessarily because less-is-more is fashionable (although some would argue that it is) but because so much personal wealth was lost last year, and any retail purchases must wrestle wallet share away from utility bills, day care, etc.

Price will be extremely important this holiday and the competition for wooing consumers with limited resources will be fierce because people just don’t have the money to spend lavishly on a cardigan cashmere sweater that so perfectly matches an item in their wardrobe.  This may once have been thought of as a necessity but is now regarded as slightly frivolous, unnecessary, wasteful and expensive.  When competing with limited wallet share and faced with purchases that can no longer be put off, price will be a huge driver.  I predict another good year relative to their higher-end counterparts for Walmart, Target and Kohl’s.

While price is a big component and will be a consideration this year for consumers, it’s not the only component when consumers regard value.  Styles aren’t so radically different that items from last year can’t be worn, and good style is always in fashion.  An outdoor clothing company who sells quality down jackets may outsell retailers who sell similar-looking merchandise at a far discounted price but whose clothes lack the same level of quality.  Despite the higher price point, in this case the value is perceived to be so high that consumers will pay.

However it’s done, those retailers leading with the value message this holiday will fare the best.

Update:   Stuart Elliot’s article in the New York Times today, More Ads for Basic Brands as Shoppers Spend Less, discusses the impact of current economic times across all consumer brands, not just retail.  The article points out how “suddenly budget conscious consumers” are looking for value in the everyday purchases they make.  Marketers everywhere are adapting to this, shifting focus to a broader audience.

In addition, according to the National Retail Federation, holiday sales are expected to drop 1% on top of last year’s 3.4% decline. Yesterday’s New York Post article, Retail Group Sees Grim Holiday Season states that major retailers “have been slashing prices in a desperate effort to hold shoppers’ attention.”

Suzy Sandberg is President of PM Digital.

We’ve been watching for months to get the inside track on Fall/Holiday. Walmart is ubiquitous on the engines but their search copy isn’t dragging in buyers with special offers. Nor is Sears, Target, Macy’s, JC Penney or other big-boxers. Old Navy is the one stand-out going for marketshare with 40% off. I’m hopeful this stays the exception. Retailer’s p/l’s can’t take another bloodbath 2nd half. With less inventory and a year’s worth of vendor concessions, operating margins need less topline price pressure to get their profit souls back.

A quick call-out on Garnet Hill…we’ve not seen them promote in the back-to-school category, certainly not with non-brand keywords. There’s not much noise around them, so I’ll bet they’re seeing some nice gains.

The BTS market is going to heat up over the next 10 days, so we’ll know more by Labor Day but it’ll all be over. I’m rooting for the consumer. They’re showing up, but we’ll see how long their memories are for those killer deals last year.

Chris Paradysz is CEO of PM Digital.

Think Patagonia, Victoria’s Secret, Staples, L.L.Bean, Abercrombie & Fitch, but also less-known brands like Day-Timer (organizational products), Eastwood (auto restoration), Green Mountain Coffee (Vermont coffee). They are on the front lines of catalog advocacy in Washington, with the USPS, the Postal Rate Commission, the Federal Government (with a G), and in the quiet boardrooms of the country’s leading environmentalists fighting for its survival. ACMA and NEMOA are the voices of an industry that matters to online marketing. Without them, traffic numbers go radically down. We see and monitor it. Not every retailer has a known brand or can afford to create one beyond its niche. And, who wants an ordered big brand world, only? Diversity creates choice. Business fights against it but consumers don’t. Check out Bleecker Street in Greenwich Village. In between great ideas from some of the best-run retailers are the same, tired retailers that dull us in the malls. Cataloging is an American industry, like Delta blues and New Orleans jazz. We need them to thrive.

Chris Paradysz is CEO of PM Digital.