Black Friday: the Shopping Starts
Online: Internet shopping has gone so mainstream it's earned its own day on the calendar. CyberMonday, the new moniker for the Monday following Thanksgiving, is the first "official" day of what promises to be a month of widespread, obsessive clicking. Some 61 million people are planning to shop online for holiday gifts while they're at work this year, according to a recent Shop.org survey, up from 52 million last year. And when they go home, consumers don't have any plans to go offline. Last year's online holiday sales topped $27 billion, a number that should grow substantially this year. According to the Conference Board, 35 percent of consumers plan to buy holiday gifts on the Internet, compared with 33 percent a year ago. It's certainly clear why E-commerce is booming: Of those who went online to buy gifts last year, 95 percent said they were satisfied. Fingers crossed that Amazon hasn't forgotten to pay its electric bill.
Price wars: If it's toys, games, and electronics they're after, consumers may have to look no further this holiday season than Wal-Mart and Target, both of which seem to be armed and ready for a looming price war. At its earnings call last week, Wal-Mart execs flexed their muscles about their "everyday low prices," promising the next month would see their "most aggressive pricing strategy ever." The discount retail giant started slashing prices well ahead of Thanksgiving. Later that same day, at Target's earnings call, the company's president said that however low Wal-Mart went, Target would follow. All of which is good for consumers, of course. The two behemoths of discount retailing seem so intent on beating each other's prices–and, presumably, gaining market share–that they're willing to take sizable hits to their bottom lines. What makes consumers happy doesn't always do the same for investors, though. Wal-Mart warned that the holiday price war might cause it to miss Wall Street's earnings expectations for the fourth quarter. Time to go shopping, indeed!
Hot or not? If there is anything that pleases retailers more than pre-Thanksgiving holiday hype, it's comparing numbers after New Year's to see who came out on top. Which companies will be the winners and losers this holiday season? Sporting goods and recreation equipment stores are expected to do monster sales, as are clothing and discount retailers, according to a new study by Visa USA. Discounters and E-commerce sites are also expected to enjoy their fair share of holiday cheer. Put it this way: If a store has iPods, PS3s, and the new Nintendo Wiis for sale, it's probably going to be just fine. Not so much for companies selling building material and home furnishings, though. The housing slump is starting to take big bites out of Home Depot's and Lowe's bottom lines, and both companies have predicted depressed earnings in the months ahead. If you're feeling altruistic this holiday season, consider remodeling!
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