Posted on: Sunday, November 30, 2003
Retailers doing the Christmas hokey pokey
By Lorene Yue
Chicago Tribune
In the month before Christmas, retailers anxiously wait to see if the merchandise bets they made in the spring will be what shoppers snatch off the store shelves.
Unlike previous years where there has been a must-have item of store-trampling proportions — think Cabbage Patch dolls or the latest generation of video game systems — retailers are banking on a wider selection of items to lift this year's holiday sales.
Still, picking winners can be tricky and buying decisions are made months in advance.
"Christmas always comes in January," said Tom Williams, a spokesman for Wal-Mart Stores Inc. "You have to know what you're ordering a year in advance."
Get it right and sales will soar, but retailers who put their money behind a dud are stuck marking it down drastically to get it out of the warehouse.
As usual, certain key categories are expected to lead the sales pack this season.
At least 50 percent of annual toy sales come during the final three months of the year, according to NPD Group. That makes toys traditionally one of the top retail categories for the holiday shopping season.
While there is no $300 video game system debuting before the holidays this year to boost the segment, there are a number of must-haves in the $30 range.
Sesame Street's furry friend Elmo is back with a new trick: the hokey pokey dance. Elmo has made a regular holiday appearance — he did the chicken dance last year — since his Tickle Me persona sent shoppers into a frenzy and occasional fisticuffs in 1996.
Toy retailers are betting Beyblades, Bratz dolls, FurReal friends and Mighty Beanz will be big.
In electronic gaming, Wal-Mart's Williams said, video game-makers will roll out new titles such as "Mario Kart: Double Dash," "Drake" and "Ratchet & Clank: Going Commando" before the holidays to appeal to teens.
Nintendo hopes to drum up another wave of interest in its two-year-old GameCube video system by dropping the price to $99.
The gaming company said that in the first 35 days of the lower price, sales have quadrupled and GameCube has snatched 18 market-share points from its competitors.
The new price, along with the popular Game Boy Advance system, could make Nintendo the leader in video game system sales this year.
For children, Hasbro's VideoNow handheld player is expected to make a splash. The portable black-and-white viewing system plays special 30-minute discs. Viewers can choose from "SpongeBob SquarePants," "American Idol" or "Transformers" episodes.
Price-conscious buyers will find a lot more gadgets within their reach this year as technology improves and costs come down.
"Prices have plummeted since last year," said Lee Antonio, a spokeswoman for Sears, Roebuck & Co. "There are lots of brands at great prices."
Plasma-screen television sets, which sold for roughly $10,000 three years ago, are priced around $3,000 this holiday season. And recordable DVD players, the next generation of digital technology that threatens to send VHS tapes to the Dumpster, have dropped to about $450.
Digital cameras are also expected to be top sellers again this year. Some analysts forecast that as many as 14 million cameras will sell by year's end.
Things for the home will find their way into the mix because one of the economy's strengths has been home sales, said Carl Tannenbaum, chief economist for LaSalle Bank in Chicago.
Record home sales, fueled by still-low interest rates, have many analysts predicting consumers will spend lavishly to furnish and decorate their living quarters for the holidays.
"Home furnishing sales have been up for the last seven to eight years," said Gordon Segal, chief executive officer of Crate & Barrel. "Consumers are still buying new homes, building new homes and trading up to better homes. We'll stock heavy on everything."
Segal said people continue to entertain at home, which means sales of glassware, dinnerware and flatware should be strong. Meanwhile, interest in cooking continues to grow, and that fuels sales of kitchen gadgets, pots and pans, and small tabletop appliances.
