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Retailers’ hopes high heading into holidays
November 21st, 2012
NEW YORK – With little left to do on Thanksgiving eve but wait, retail executives are wondering which shoppers will dominate the looming Black Friday weekend: those who have told poll-takers they are disgusted with retailers’ efforts to spur them into shopping and who plan to avoid stores altogether, or the 147 million shoppers whom the National Retail Federation (NRF) projects will hit the stores this weekend.
Early forecasts for the holiday season painted a relatively upbeat picture. In mid-October the NRF’s holiday forecast projected a 4.1% increase in holiday sales (November and December) to $586.1 billion, although the trade group warned that most consumers will take a cautious approach to holiday buying. The Retail Compass survey of 100 chief marketing officers at leading U.S. retailers conducted for BDO USA LLP in September and October yielded an average estimate of a 3.7% increase for holiday comparable-store sales and a 4.7% increase in total holiday sales. It was the most optimistic forecast by the survey since 2007.
A more recent poll taken in early November for the NRF suggests that as many as 147 million people may hit the stores this weekend (Friday, Saturday and Sunday). "Though the Black Friday tradition is here to stay, there’s no question that it has changed in recent years; already there is a tremendous amount of excitement and anticipation surrounding retailers’ Thanksgiving and Black Friday promotions," said NRF president and chief executive officer Mathew Shay in a statement.
The NRF survey reveals that consumers are still relying on traditional marketing communications as well as new digital avenues. Nearly half (49.5%) said they will follow advertising circulars, while 30.5% plan to use television ads. In addition, 26.8% will follow retailers’ websites, while 31.4% will look at e-mails from retailers.
A number of mass market retailers have moved the starting blocks for the weekend up to the evening of Thanksgiving Day. Walmart plans to open its doors at 8 p.m. and offer hourly deals, while Target Corp. will open at 9 p.m. on Thanksgiving. Kmart, on the other hand, is attempting to get a major jump on its powerful competitors by opening at 6 a.m. on Thanksgiving Day. Amazon, meanwhile, has been offering “Black Friday Deals Week” with sharp discounts offered every hour on different products throughout this week.
Consumers are clearly not of one mind about retailers’ Black Friday frenzy. A tracking survey by the International Council of Shopping Centers (ICSC) and Goldman Sachs finds that 17%, equating to around 41 million people, plan to take advantage of the advanced hours and shop on Thanksgiving Day. However, 33% said they still plan to shop on Black Friday, while just over half (51%) intend to shop at least one day of the weekend.
"The main reason cited by one-third of consumers planning to shop on Thanksgiving Day was that it would be an earlier opportunity to find bargains," said Michael Niemira, vice president of research and chief economist for ICSC. "The second, third and fourth reasons to shop, which were all equally shared by those intending to go out on Thanksgiving Day, were, first, that it is something to do; second, that it is an easier time of day to shop; and third, that they expect crowds will be smaller than on Black Friday."
However, a November poll conducted for Consumer Reports by GfK Custom Research revealed that 68% of Americans will not shop in stores this weekend, while 34% will shop online during the weekend and an equal number will shop online on Cyber Monday. Those figures do not indicate a negative outlook toward the holidays, however; 90% of participants said they are looking forward to the season.
On the other hand, marketing executive Ryan Levesque conducted a Google survey of 1,500 Internet users in the United States, posing the question, “Do you think retailers have gone too far by pushing their Black Friday sales ahead to Thanksgiving Day?” Slightly over 67% responded yes, while the percentage went up to nearly 79% among baby boomers.
Perhaps more ominous is a dip in confidence since early November revealed by the Thomson Reuters/University of Michigan monthly consumer sentiment survey. The survey’s index topped out at 82.7, up slightly from October’s 82.6, but down from a preliminary reading of 84.9 taken earlier in the month. “The late-month retreat was accompanied by more economic uncertainty about future federal taxes and spending programs and the inability of the political parties to reach a settlement,” said Richard Curtin, director of the survey.