Holiday Shoppers Waiting Out Merchants

Discussion
Dec 06, 2006

By George Anderson


Despite some of the consumer craziness caught by cameras on Black Friday, this year’s holiday shopping season is off to a slow start.


Research conducted by the International Council of Shopping Centers and UBS Securities showed 25 percent of shoppers had finished most of their holiday gift buying by Dec. 3. That’s down from 32 percent each of the prior two years.


Sales for the week following Thanksgiving fell 3.1 percent, getting this year’s holiday shopping season off to the slowest start in four years.


Dan Popowics, an analyst with Fifth Third Asset Management, told Bloomberg News, consumers are “procrastinating” this year.


“Shoppers are savvy and realize that in some cases they can be rewarded for waiting,’ said Mr. Popowics. “The calendar needs to turn over a few more days before the season heats up a bit.”


ICSC Chief Economist Mike Niemira said, “I’d be surprised if you saw a boom from here on out or a bust. I suspect that you will see a lot of the buying particularly in the last two weekends before Christmas.’


Discussion Questions: Do you see any significance in the decline in the percentage of shoppers who have finished their gift buying so far this year compared
to previous Christmases? Has the apparent plan by retailers to limit discounts been the cause of the slow start to the season?

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10 Comments on "Holiday Shoppers Waiting Out Merchants"


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Camille P. Schuster, Ph.D.
Guest
15 years 5 months ago

With the possibility of Play Station 3s and Nintendo Wiis becoming available a good number of consumers are trying to decide whether they will be able to get the gaming console or do they need to think of an alternative. Not wanting to purchase alternative gifts if the possibility of obtaining a gaming console exists, they will certainly be delaying purchases.

That lack of commitment may be spilling over to other decisions. Will there be better sales later now that I missed Black Friday? Should I purchase now or should I wait?

Jeff Weitzman
Guest
Jeff Weitzman
15 years 5 months ago

Oh Ryan, you sentimental fool, you! 🙂 Seriously, I hope you’re right but I doubt it. But maybe there’s a kernel of truth there. People may be tiring of the Black Friday madness and realizing that they have an entire month to find appropriate gifts without being trampled at a Wal-Mart. With the continued uneasiness about the economy, with real wages for most Americans stagnant and no realistic solutions being offered for the various global issues we face, it’s also possible consumers are just being a little more cautious in their spending.

Michael Tesler
Guest
Michael Tesler
15 years 5 months ago

I generally do not believe and totally discount survey results even though they are right a good 50% of the time. However, it does make sense that the more Black Friday is promoted and the more people buy that particular day (at low promotional prices) the less they need to buy after that particular day…….yes, stores are once again robbing Peter to pay Paul or is it PayPal?

Li McClelland
Guest
Li McClelland
15 years 5 months ago
Don’t know whether it can be considered a trend or not, but many, many folks in my acquaintance have independently commented that they specifically avoid the Thanksgiving-to-Christmas madness by doing their holiday shopping throughout the year. By keeping their eyes open and availing themselves of a variety of sources including regular and specialty stores, art shows, charity and cause websites, while also using vacation and business travel as opportunities to find something “different,” they pick up special and individualized gift items for family, friends and associates on their list. I have done this myself for years and just spent most of the day after Thanksgiving wrapping for imminent delivery the gifts I had accumulated during the year. When someone opens the present and finds that it is not yet another scarf or tie or sweater or gift card they are happy and appreciate the fact that special thought and effort has gone into the selection of their gift. Of course, the latest teen fashion accessory, child’s toy or hot electronic device has to be acquired… Read more »
Mark Lilien
Guest
15 years 5 months ago

The Christmas rush seems to come later and later each year. Of course, much of the Christmas rush now comes after December 25th, since gift card sales are often more than the comp increase dollars. Shoppers believe that waiting until the last minute, or waiting until after December 25th, will be well rewarded. A $50 gift card is really worth $65 or more after December 25th, because of steep markdowns. There’s only one reason to shop early: if you need an item in short supply. As more and more retailers focus on stockout prevention, customers don’t need to worry about last-minute shortages. So why should anyone shop early? Almost everything will be in stock at lower prices, if you just wait a few days.

Charles P. Walsh
Guest
Charles P. Walsh
15 years 5 months ago

Sometimes consumers win and sometimes they lose in the “waiting game” with retailers. This year they are going to come out on top…my discussions with folks inside the retail walls lead me to believe that sell-throughs in seasonal, toys and electronics (not to mention apparel) are behind last years percentages.

Buyers and Executives are getting itchy fingers while they consider the potential for the sudden flood of shoppers offsetting the doldrums versus the competitors trumping them on price cuts. There are going to be some significant price reductions if this weekend doesn’t REALLY open up.

Dick Seesel
Guest
15 years 5 months ago

The “doldrums” that hit retailers for about two weeks after Black Friday seem to be setting in as usual this year. The drop in year-to-year numbers may have more to do with unseasonably warm weather (until late last week in the Midwest), or it may have to do with poor availability of some of the hottest gifts on the market (the Wii and PS3 as examples).

I’d expect this week’s numbers to look a little better based on more seasonal temperatures vs. warm weather a year ago…but I’d also expect the real surge to come very late and even post-Christmas this year. Falling prices on key electronics categories like HDTV’s or computers (with great deals prior to the release of Windows Vista) may make it tough to maintain average unit sale this year.

Ryan Mathews
Guest
15 years 5 months ago

Maybe people are just tired of being conned into endless hours of mindless consumption. Is it remotely possible that people are starting to remember that there used to be a more human sentiment behind the season?

Barry Wise
Guest
Barry Wise
15 years 5 months ago

There seem to be a combination of factors leading to the decline in the number of shoppers who have finished their gift buying as compared to previous years. One appears to be that shoppers are resisting the “retraining” they’re receiving from retailers. Unfortunately, in the past few years, some retailers panicked and took markdowns early leaving many shoppers waiting for markdowns to be taken.

This year, however, many retailers have fine tuned their inventories and have implemented price optimization systems, which they anticipate will result in fewer markdowns and higher margins. This change has resulted in shoppers waiting for the markdowns. In addition, an increased number of shoppers are purchasing gift cards for presents, giving them another reason to procrastinate as they know it’s one gift retailers won’t run out of.

Bernie Slome
Guest
Bernie Slome
15 years 5 months ago

Retailers have created their own misery. For years now, consumers have seen that the deepest discounts come on the final days of the holiday shopping season. So why not wait? Or better yet, give a gift card. By doing so, they avoid the crowds and are in effect, due to the deeper post-holiday discounts, giving a larger gift. While gift cards don’t get counted as revenue by retailers until they are used, it would be interesting to see if the number of gifts cards purchased has increased and by what percent.

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