Holiday treat in store
Deep discounts await last-minute gift shoppers
This year, last-minute shoppers will be in luck.
Many major retailers are offering discounts right up until Christmas and Hanukkah, hoping to make sure they aren’t stuck with merchandise that will need to be even more heavily marked down.
A check on the ads Friday showed J.C. Penney had socalled “doorbuster” deals on tap Saturday, aimed at spurring early shopping, similar to those usually rolled out during the post-Thanksgiving shopping binge. Sears was offering up to 60% off on some women’s and kids’ boots and 50% off on tools. Macy’s had a 20% off deal going. Toys “R” Us was going into around-theclock mode, keeping stores open until 9 p.m. on Christmas Eve. Kohl’s stores are open 24 hours up to 6 p.m. on Christmas Eve.
Aside from the stores, online sales have broken records this year. The National Retail Federation is predicting that purchases — both online and in stores — may exceed the 3.6% uptick it initially forecast for the holiday season. But store owners don’t appear to be leaving a final sales bump to chance, marking down items ranging from toys to pajama tops in order to clear their shelves.
“Going into this weekend you’ll see a lot more discounting and promotions to get that last push ... for holiday and winter merchandise,” says Shelley Kohan, vice president of retail consulting for Retail-Next, an analytics firm that focuses on retailers in malls and shopping centers.
Business for many retailers has been brisk. Retailers reaped $79.2 billion in online sales from Nov. 1 to Dec. 20, a 10.72% leap over that period last year, according to Adobe Digital Insights.
But while the buying frenzy usually continues during the two days after Christmas, when shoppers flock to return gifts and cash in on post-holiday sales, retailers know that by Dec. 28, sales traditionally slow down significantly, Kohan says. So they want to sell while they can.
Deeper and more widespread discounts also reflect a more disciplined retail industry, that in recent months has been shutting down failing stores, and not stocking more inventory than it expects to sell in order to prop up the bottom line.
“I think retailers are ... more disciplined and understand that having inventory left over post-Christmas only dives deeper into their profit margins,” Kohan says. “So while discounting may seem like it takes profit away, the end game ... is (to) sell it in this Christmas and post-Christmas period because in January, the season slows substantially.”
There’s another reason retailers are continuing to dish out the discounts — customers have grown to expect them, especially since the recession when wary and worried consumers were likely to dip into their pockets only if they could get a good deal.
“We have conditioned the consumer for sales and discounts so ... we expect to see deeper and more widespread discounts leading up to the holiday weekend,’’ says Steve Barr, retail and consumer leader for consultancy PwC.