| Lackluster sales in this holiday
season have retailers scrambling to
wring a few last dollars from
procrastinators by slashing prices,
extending hours and wooing
customers more persistently than
last year.
the moves show that retailers'
strategy during this final weekend
before christmas -- when about 10%
of holiday sales are expected to
take place -- has become
increasingly reliant on the same
promotions and marathon hours once
unique to the "black
friday" weekend following
thanksgiving. but the discounts
also reveal the pinch stores are in
this year as the credit crunch,
rising gas prices and winter storms
have taken a toll on companies
dependent on end-of-year sales.
the tough economy has left aisles
more empty this year. total foot
traffic at u.s. retail outlets took
an 8.9% dive during the second full
week of december, compared with the
same period last year, according to
an estimate from shoppertrak rct
corp., which bases its numbers on a
formula that involves an electronic
count of shoppers in malls and
other retail outlets nationwide.
a bright spot, however, has been
online, where aggressive
discounting and cut-rate deals on
fast shipping have contributed to a
surge in spending. from nov. 1 to
dec. 16, online shoppers spent
$23.5 billion, 19% higher than the
corresponding days last year,
according to comscore inc., a
reston, va., market research firm
that tracks web spending and
traffic. videogames, consoles and
accessories are the fastest-growing
category, more than doubling from
the comparable period last year.
furniture, appliances and equipment
ranks second, up 63%, while event
tickets and consumer electronics
are up 29% and 24%, respectively.
now, a final push is on, both
online and in stores. web retailers
continued to hunt for business by
cutting shipping charges to seal
deals before the pre-christmas
shipping window closes.
shoebuy.com, a boston-based unit of
iac/interactive corp. offered free
express shipping until today.
online handbag merchant ebags
upgraded purchases made by
wednesday from standard shipping to
two-day air-shipping through ups
for no extra cost.
brick-and-mortar stores, meanwhile,
retooled their hours for the
weekend, hoping to spark their own
shopping flurry. j.c. penney co.
stores are staying open until
midnight tonight and saturday.
select macy's inc. stores on
the east coast will stay open
nonstop throughout the weekend --
107 hours straight for one branch
in queens. and new york-based fao
schwarz made discounts of 25% to
50% on certain toys. ed schmults,
the chief executive officer at fao
schwarz, said that while foot
traffic was up, business had not
been as booming throughout the
season as he hoped.
the national retail federation, a
trade group, is predicting just 4%
in sales growth for 2007, the
smallest growth rate in five years.
britt beemer, chairman of
america's research group,
paints an even grimmer picture: he
lowered his forecast of 2% retail
sales growth to 1.8%, his lowest
forecast in nearly 10 years.
in the apparel category, men's
clothing has showed modest
single-digit growth through the
first 20 days of the shopping
season, according to mastercard
spending pulse, a unit of
mastercard advisors, which tracks
spending of all types. but
women's apparel -- which last
year constituted three times the
sales of men's -- has been a
major disappointment, as shoppers
have avoided big purchases. sales
were down 5.7% from the same time
last year.
retailers have responded with a
flurry of price cuts, but large
inventory remains in some stores.
one of gap inc.'s old navy
stores in downtown chicago on
wednesday had piles of festive
sweaters marked down to $20 from
$36.50. women's coats still
stuffed the racks, despite being
already marked down 50%, and its
signature "performance
fleece," also half off, was
stacked eight shelves high.
the bad tidings for apparel have
left some retailers looking for
other items to push. at banana
republic, also owned by gap, $64
gift sets of its perfumes, body
creams and shower creams were
marked down 30%. gold-boxed gift
sets of a new line of bath products
at ann taylor stores corp. stores
were discounted to $19.50 from $29.
at limited brands inc.'s
victoria's secret, stores were
piled with beauty gift sets, many
40% off.
meanwhile luxury goods are expected
to have a good season this year,
and retail consultant frederick
crawford of alixpartners predicts
"pockets of good news"
for high-end retail. for brands
like prada and gucci, he expects to
see 5% to 7% growth.
according to retail surveys,
electronics sales were down 0.5% in
the three-week period between nov.
18 and dec. 9 compared to a year
ago, according to stephen baker,
vice president of industry analysis
for market watcher npd group. he
said consumers in recent years have
been delaying purchases until
closer to christmas, which may
account for the slowdown.
indeed, angela smith has waited
until the last week to make her
purchases. a 39-year-old bank
employee in dallas, ms. smith said
she is waiting for prices to drop
further as well as trying to spend
less. for her three nephews, ages
12, 8 and 7, she plans to buy
remote-controlled cars, which
wal-mart stores inc. initially
priced at $59 and has since dropped
to $49. "i am going to swing
by this weekend and see if they are
going to take it down one more
time," says ms. smith, who was
shopping for a co-worker's
present at her local wal-mart
midweek.
home-furnishings retailers,
fighting the weak housing market,
are being particularly aggressive
with their promotions this year. at
williams-sonoma inc.'s pottery
barn store on chicago's
michigan avenue,
christmas-tree-shaped candles were
discounted 50%, and holiday
garlands of fake evergreen branches
were 30% off. wrapped gifts such as
silver jewelry boxes, also marked
down 30%, were stacked high
wednesday afternoon.
home-improvement outfits like
lowe's cos. inc. and home
depot inc. are destined to be
hardest hit, says
alixpartners' mr. crawford.
"consumers are absolutely
showing us that they will be
delaying discretionary
purchases" like gear to
remodel a kitchen, he said.
a boom-bust pattern is typical
after thanksgiving's black
friday discounts, which encourages
a flurry of purchases early but
leads to a tapering off in early
december, killing shopping
momentum. this year the pattern was
more pronounced: a double-digit
sales surge on black friday
exceeded retailers'
expectations; but come december,
throngs of shoppers didn't
return.
there was one exception, however:
online retail. web merchants have
discounted and promoted heavily
this season, say industry analysts.
shipping promotions have been
particularly popular. sixty-eight
percent of surveyed web retailers
said they are offering express
shipping promotions this year, up
from 49% last year, according to
scott silverman, executive director
of shop.org, an online retail trade
group and unit of national retail
federation.
as the boom continues, these
companies are becoming increasingly
creative to draw customers. this
year ice.com, a montreal-based
internet jeweler, has rolled out
new videos to promote products and
free overnight shipping. it has
experimented with new marketing
tricks such as buying front-page
ads on microsoft corp.'s msn
and yahoo inc.'s web sites
this week. ice.com even tried to
tap influencers to drive
word-of-mouth among blogs, magazine
mentions and celebrities.
Good article. Sounds like they arent doing so hot. |
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