Hol­i­day shop­ping los­ing its power

Sales ‘no longer a sea­sonal busi­ness’

The Washington Times Daily - - NATION - BY ANNE D’INNOCENZIO

NEW YORK | The hol­i­day shop­ping sea­son is los­ing some of its power in the year’s sales.

Novem­ber and De­cem­ber now ac­count for less than 21 per­cent of an­nual re­tail sales at phys­i­cal stores, down from a peak of over 25 per­cent, and ex­perts be­lieve it’ll keep drop­ping. Those ex­tra per­cent­age points would have trans­lated into an ex­tra $70 bil­lion more in buy­ing for last year, says Michael Niemira, prin­ci­pal at The Re­tail Econ­o­mist.

The sea­son had steadily gained in im­por­tance and peaked in the early ’80s, be­fore the dom­i­nance of big dis­coun­ters like Wal-Mart stalled its growth as shop­pers be­gan mov­ing away from depart­ment stores. Still, the two-month pe­riod held its own through the mid-’90s, when on­line shop­ping for deals took hold.

“There was a mind­set even be­fore on­line shop­ping,” said Mr. Niemira, whose data goes back to 1967. “But this just ac­cel­er­ated it.”

In gen­eral, many peo­ple are shop­ping for the hol­i­days all year long now, mir­ror­ing the trend for back-to-school items. Heavy dis­count­ing has di­luted sales, and with big pro­mo­tions through­out the year, shop­pers no longer hold off mak­ing their big­gest pur­chases un­til the hol­i­days.

This year, the con­tentious pres­i­den­tial elec­tion de­layed some shop­pers, and with Christ­mas fall­ing on a Sun­day, stores are ex­pect­ing a big­ger num­ber of last-minute buy­ers. At a busy Tar­get store in Brick, New Jersey on Satur­day morn­ing, many shop­pers seemed to be pick­ing up small items to use as stock­ing stuffers. Oth­ers were hop­ing to find a last-minute deal.

“I’m pretty much set for Christ­mas, so I thought I would come down and see what I could find on sale, like maybe a TV,” Terry Kreft, 38, said as she strolled through the store.

She has spent about $600 on gifts this year, tak­ing ad­van­tage of dis­counts dur­ing the tra­di­tional hol­i­day-sea­son shop­ping days right af­ter Thanks­giv­ing, called “Black Fri­day” and “Cy­ber Mon­day.”

“I was pretty much done with my shop­ping be­fore De­cem­ber got rolling,” Ms. Kreft said.

But a late rush isn’t ex­pected to make up the dif­fer­ence.

“It’s no longer a sea­sonal busi­ness,” said Mar­shal Cohen, chief in­dus­try an­a­lyst at con­sumer re­search firm NPD Group Inc. “It’s a year­long in­vest­ment for the con­sumer. And re­tail­ers need to change. They have to ex­cite shop­pers early in the sea­son and later in the sea­son — and all year long.” Here’s what’s be­hind the shift: Shop­pers don’t wait to buy bigticket items: Stores now of­fer good deals through­out the year on prod­ucts like TVs and ap­pli­ances, mak­ing wait­ing un­til the end of the year less ap­peal­ing. Deloitte LLP found 30 per­cent of shop­pers planned to wait for hol­i­day sales to buy large gifts, down from 35 per­cent a year ago.

“Peo­ple are not hold­ing back and wait­ing be­cause they find a good price for all the things they are look­ing for,” said Rod Sides, vice chair­man of Deloitte.

Christo­pher Rogers, a re­search an­a­lyst at Pan­jiva, which looks at im­ports, says he has seen a smooth­ing out of im­ports dur­ing the pre-hol­i­day shop­ping sea­son from July to Novem­ber on key items like ap­parel, toys and fur­ni­ture.

The shift com­pli­cates mat­ters for re­tail­ers, which could usu­ally con­cen­trate their ef­forts on cap­tur­ing shop­pers dur­ing the hol­i­day win­dow.

Heavy dis­count­ing: With fierce com­pe­ti­tion on­line, par­tic­u­larly from Ama­zon, stores are con­stantly try­ing to outdo each other and even un­der­cut­ting them­selves on prices from the pre­vi­ous year. Shop­pers have been trained to de­mand deals, and won’t break the habit.

“The height­ened com­pe­ti­tion be­ing driven by the in­flu­ence of e-com­merce largely is driv­ing prices down on pop­u­lar hol­i­day items,” said Traci Gre­gorski, se­nior vice pres­i­dent of mar­ket­ing at Mar­ket Track. “Re­tail­ers know con­sumers fre­quently com­pare prices on these cat­e­gories on­line and are dis­count­ing more heav­ily to drive traf­fic and sales.”

One ex­am­ple: The av­er­age price for a TV from Oct. 1 through Tues­day was $829.52, down from $1,009.41 dur­ing the same time last year, ac­cord­ing to Mar­ket Track, which tracked pro­moted prices across 40 ma­jor re­tail­ers on over 19,000 TVs.

The rise of gift cards: Shop­pers are giv­ing more gift cards as presents, which skews hol­i­day sales fig­ures since they aren’t booked as sales un­til they’re redeemed. And most cards no longer have an ex­pi­ra­tion date.

This hol­i­day sea­son, gift cards were ranked sec­ond as a top gift, be­hind only cloth­ing, ac­cord­ing to NPD. Gift cards sales ac­counted for about 25.4 per­cent of hol­i­day ex­pen­di­tures last year, up from 13.5 per­cent in 2003, ac­cord­ing to Gold­man Sachs and The Re­tail Econ­o­mist.

Shop­pers want ex­pe­ri­ences: Ma­jor depart­ment stores like Macy’s have been see­ing shop­pers shift­ing their spend­ing away from tra­di­tional mer­chan­dise like cloth­ing and more to­ward gifts that of­fer ex­pe­ri­ences like beauty treat­ments and other ser­vices.

ASSOCIATED PRESS

Maddy (left) and her friend Mag­gie, sit with their shop­ping bags at Union Square in San Fran­cisco. Novem­ber and De­cem­ber now ac­count for less than 21 per­cent of an­nual re­tail sales at phys­i­cal stores, down from a peak of over 25 per­cent as peo­ple are spread­ing out shop­ping all year.

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