Retailers are braced for an onslaught this weekend as cautious consumers awake from a “Christmas hibernation” lull in holiday shopping that followed strong Black Friday sales over Thanksgiving.
To get shoppers on the hunt for last-minute gifts into their stores and online, many retailers are giving them what they really want: ever-deeper discounts.On Black Friday weekend, consumers overwhelmingly responded to extended hours and heavy promotions, such as the $149 TVs offered at Wal-Mart that flew off the shelves. They not only crossed items off their Christmas list, they picked up more presents for themselves than ever before.That had retailers rejoicing. But after Thanksgiving, many pulled back on the blockbuster discounts, analysts said, hoping shoppers would pay full price. Shoppers responded by hunkering down, conditioned to wait for the deeper discounts they knew were coming. Consumers and businesses also became more concerned about the uncertainty surrounding the “fiscal cliff” negotiations in Washington. C. Britt Beemer, chairman and founder of America’s Research Group, called it a “Christmas hibernation,” with consumers saving their money for larger last-minute deals and sticking to their goal to pay with cash or debit cards.He said 52.6 percent of people in his holiday survey had planned to sit out most of the shopping season, waiting for bigger discounts.“Saturday will be a big day in dollars,” Beemer predicts. “But consumers are not going to go deeper in debt.” Toys R Us chief executive officer Jerry Storch told CNBC this week that “things were strong on Black Friday. Then in the industry as a whole we saw something of a lull.”But he added, “The whole world is expecting it to pick up as we get into this last weekend leading to Christmas.” Toys R Us stores are among the retailers who will be open around the clock this weekend.Consumers now have to sprint toward the Christmas finish line.“Absolutely, yes, we are going to see aggressive sales, starting this weekend and lingering all the way through, past the holiday,” said Marshal Cohen, chief industry analyst for market researchers the NPD Group. “The retailer is not looking to carry over a lot of merchandise.”Cohen added, “Retailers are now looking at a little bit lower volume than they would like to be looking at. They are looking at a little bit higher inventory than they would like to be looking at.” Online sites such as Amazon, along with QVC and other shopping networks, are doing well this season, Cohen said. Also doing well are stores selling footwear, accessories and sporting goods. But full-line brick-and-mortar retailers have to compete with their own online sites. Retailers traditionally can take in as much as 40 percent of their annual revenue during the holiday season. So to get their share — and perhaps more — they have been drawing consumers not with “must have” items but with deals that expire in just hours. Better grab it or it’s gone. Bloomingdale’s, operated by Macy’s, offered 15 percent off when you spend $100 to $149.99 online, 25 percent when you spend $200 or more, good for only 12 hours. Banana Republic’s deals included a 30 percent off promotion for 48 hours only and daily deals in this month’s “12 Days of Joy,” including everything from free holiday jam samples to 20 percent off a flight on Virgin America. Cohen said retailers have to accept some blame for the lower-than-expected sales after Thanksgiving. Except for a few new video games or the latest doll, iPhone and iPad, there are few “must have” items to entice consumers to open their wallets this season.“Here’s the unspoken truth. There are very few items that have really jumped out at the consumer and said, ‘You really have to go out and buy this,’ ” Cohen said. “We’ve bored customers to death and expect them to go out and spend more. But on what?”So what’s a retailer to do? Really ramp up those discounts. “How do you get someone excited about shopping? Sixty to 70 percent off,” Beemer said. Danielle Nelsen, owner of Fashionista Exchange & Boutique, a locally owned resale shop in Overland Park, said her overall sales had been increasing since she opened the store in mid-2011. But holiday sales have been slower than a year ago. So for every gift certificate purchase of $50 or more, her customers get a $15 gift certificate to use after Jan. 1. All regular-price jeans and pants are buy one, get one half off, and gifts and jewelry made by local artists are 15 percent off. The shop also is offering free gift wrapping and a free cup of coffee while customers shop.“Right after Thanksgiving there was a lull, but last Saturday was good and there has been a pickup starting Tuesday,” Nelsen said.Aeropostale is now slashing prices 60 percent, while teen competitor American Eagle Outfitters is offering 40 percent off all purchases. The Children’s Place clothing store chain is offering up to 75 percent off online. Even at those big discounts, retailers can still make a profit. Beemer said apparel purchased at $20 wholesale and marked up to $80 could be discounted 60 percent for a $12 profit. Still, $12 is quite a comedown from $60.Macy’s is promoting sales but does not foresee offering any unplanned discounts in the days leading up to Christmas. But the chain is planning for the first time to keep most of its stores open around the clock this weekend. Sears and J.C. Penney plan to be open from 7 a.m. to midnight Saturday and Sunday and then open up again at 7 a.m. on. Christmas Eve. Kohl’s is offering several deeply discounted items and is keeping its doors open until 6 p.m. Christmas Eve.Dillard’s declined to comment on its holiday promotions or discounts.In a season that has stretched six weeks, more than 17 million American procrastinators are still expected to be making purchases even on Christmas Eve, Consumer Reports says.If consumers run out of time or money to shop, some plan to cross a few people off their list — service providers first, but also 14 percent of married shoppers said their spouse or partner would most likely not get a gift, an option that was embraced by more women than men, according to the Consumer Reports survey. Co-workers, the family pet, extended family members and the boss also could be cut.But self-giving also is higher than ever this year, and more consumers than ever plan to shop online Christmas Day, nearly double the number in 2009, according to a survey by the National Retail Federation. Nearly 4 percent of those surveyed also plan to shop in a brick-and-mortar store on Christmas Day.
The Associated Press contributed to this story. To reach Joyce Smith, call 816-234-4692 or send email to jsmith@kcstar.com. Follow her on Facebook and Twitter at JoyceKC.
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