Retailers counting on surge
By Sandra M. Jones
CHICAGO — After weeks of waiting for shoppers to come out of hiding, retailers are preparing for a surge of activity this weekend as consumers ferret out bargains and last-minute gifts before Christmas arrives.
Traffic is expected to surge today as procrastinators — and there are lots of them this year — make for the stores. Today, known as Super Saturday, typically ranks as the biggest shopping day of the year after Black Friday, and retailers are hoping it lives up to its name.
"The psychology of the holiday promotes it to be a last-minute event," said Mark Cohen, marketing professor at Columbia Business School in New York and the former chairman and CEO of Sears Canada. "The closer people get to Dec. 24, the more frantic they get. That's human nature. It happens every year."
Retailers purposely kept their inventories low this holiday season to escape the markdown mania that took over holiday 2008 as luxury stores and discount chains got caught with too much merchandise following the economic crisis.
The slimmer selection means shoppers need to have plenty of backup gift ideas in mind when they head to the mall or get online to shop, experts say.
"We're not seeing the craze in discounts we had seen last year," said Seema Pajula, a partner at Deloitte's retail practice. "But we've been trained now to expect these great discounts."
Half of the consumers Deloitte questioned in its annual holiday mood survey said they are expecting markdowns of 50 percent or more.
Retailers, keen to protect their profits this year, aren't obliging.
Without the eye-popping discounts of 60 percent and 70 percent shoppers saw last year, merchants are looking for other ways to attract attention and drive shoppers to their stores.
In one of the oldest tricks in the retail handbook, a wide swath of stores are offering discounts on one item each day through Christmas in hopes of getting reluctant shoppers to spend. The daily deals, attempted by a few retailers last year, are out in force for 2009, a reflection of how price is trumping any other marketing gimmick, said Candace Corlett, president of WSL Strategic Retail, a New York-based shopping behavior research firm.
Kohl's is calling its promotion the "25 days of Christmas." REI and Lane Bryant pegged their daily deals to the 12 days of Christmas. But most retailers are relying on the simple moniker "daily deals."
"I haven't seen many (deals) that are creative," Corlett said. "Everybody is playing it safe and being straightforward. It's all about price."
This past week, Target discounted a pink wooden retro play kitchen by 33 percent to $99. Garnet Hill cut the price on women's flannel boxers by 30 percent to $14. And Kohl's lowered the price of a Fisher-Price Smart Cycle Learning Arcade by 40 percent to $59.99.
Many national chains — including J.C. Penney, Toys R Us and Macy's — are extending store hours this weekend until midnight in hopes of capturing as many sales as possible.
Holiday retail sales are expected to hold steady or fall slightly from last year, which made history as the worst holiday retail season in 40 years.
With so much at stake, the traffic-driving deals are planned to continue through next week. Starting first thing Monday, Walmart is unveiling a stash of Zhu Zhu hamsters — one of the few highly coveted toys of the holiday — organizing lines and passing out numbers akin to a Black Friday event. Toys R Us promises daily arrivals of Zhu Zhu pets at its stores through Christmas Eve.
It is still too early to say if all the planning retailers have done to avoid last year's meltdown will succeed. As of Dec. 6, 40 percent of shoppers said they had yet to begin their holiday gift buying, according to a Consumer Reports survey released Thursday. Only 12 percent of consumers have finished their holiday shopping, and nearly one-third don't anticipate finishing until Dec. 23 or later, according to the report.