A Consumer's Guide to the Holiday Shopping Season
If your holiday bounty has left you feeling underwhelmed, you're not alone. Retailers nationwide reported an uninspiring holiday shopping season this year. Sales grew about 3 percent, compared with 5.2 percent last year, estimates MasterCard Advisors. Another data research company, ShopperTrak RCT, says growth might have been 4.5 percent, below the predicted 5 percent. The year has been called average, at best.
What does this mean for consumers?
Deals galore. Along with the usual after-Christmas sales on seasonal merchandise, there are deep discounts on an overstock of cold-weather apparel, which shoppers may have left on store shelves because of warm winter weather in many areas.
New inventory. The immense popularity of gift cards–about 52 percent of consumers bought them this holiday season–has prompted stores to adjust their early-January inventory. Retailers typically make 10 to 15 percent of their holiday sales after Christmas, and by moving more fresh merchandise to the shelves earlier, they hope to make the most of returning customers cashing in their cards. "On the cusp of a new trend," as National Retail Federation spokesman Scott Krugman puts it, shoppers can now pick up a cheap-as-dirt sweater, a spring-break swimsuit, and 75 percent-off tinsel, all in one trip.
Fresh strategy. Retailers may rethink the gift-card boon of 2006. Gift cards aren't counted in sales figures until they are redeemed, and Marshal Cohen, chief analyst at the NDP Group, sees vendors "thinking twice" about gift-card advertising next year. According to Cohen, gift cards (and online shopping, for that matter) discourage givers from impulse buying for themselves. Next year, he expects companies that touted gift cards in 2006 will look further into "the more you buy, the more you save"-type promotions.
Electronics rule. One thing that hasn't changed is retailers' enduring love affair with electronics. Although consumers were buying fewer gifts this season, big-ticket items such as DVD players and giant plasma-screen TVs flew off the shelves. Electronics promotions were so successful they most likely propped up the ho-hum selling season and made the day after Thanksgiving, aka Black Friday, the biggest shopping day of the year, even beating out the Saturday before Christmas. Krugman predicts that retailers will continue to cater to the digital-loving hordes by slashing prices ($1,000, 42-inch plasma TVs, anyone?) and extending hours (24-hour Wal-Mart and Black Friday midnight openings).
Online onslaught. Online retailers saw sales rise 26 percent from last year, reports ComScore Networks. The holidays helped nontravel spending surpass $100 billion in a year for the first time, while Amazon.com reported its "best holiday to date," says company spokesman Craig Bernan. And online vendors will plan more of the same in 2007. Thirty-eight percent of stores offered guaranteed late delivery this year, twice the number in 2005, and ComScore Chairman Gian Fulgoni expects that only to increase. Retailers will keep upgrading their websites–and if your favorite store doesn't have one, it probably will soon.
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