Consumer Corner: Holiday shopping season takes off; consumers are ready to spend

By MARCELLA S. KREITER  |  Dec. 4, 2011 at 4:30 AM
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CHICAGO, Dec. 4 (UPI) -- Consumer enthusiasm last weekend has U.S. retailers crossing their fingers that spending momentum will keep up through the holiday season.

Typically, retailers rack up 20 percent of their annual sales in the weeks between Thanksgiving and Christmas.

Black Friday deals had consumers scurrying for bargains, with 226 million of them spending an average $398.62 each. That represented a hefty 6.6 percent increase from last year, ShopperTrak reported. MasterCard Advisors' SpendingPulse said for the four-day weekend, spending was up 8.7 percent compared with last year, totaling $50.06 billion. The National Retail Federation put the total at a record $52.4 billion.

With 21 shopping days left, can it last?

That's the question retailers are asking as they tweak marketing plans: If sales keep up, there will be no reason for deep discounts to reduce inventories before Jan. 1; if they don't, bargains will abound in the days before Christmas and the week after.

The whole shopping equation is changing as merchants look to technology to push their wares. Two shopping malls -- the Promenade Temecula in Southern California and Short Pump Town Center in Richmond, Va. -- had planned to track shoppers by monitoring cellphone signals but shelved those plans following calls from New York Sen. Charles Shumer's office.

"A shopper's personal cellphone should not be used by a third party as a tracking device by retailers who are seeking to determine holiday shopping patterns," Shumer said in a statement. "Personal cellphones are just that -- personal. If retailers want to tap into your phone to see what your shopping patterns are, they can ask you for your permission to do so."

CNNMoney reported other malls that used the tracking service Black Friday said they would make it easier for shoppers to opt out and Sharon Biggar, chief executive officer of Path Intelligence, which provides the tracking software, noted Internet retailers routinely track customers' movements online without seeking permission.

"We are simply seeking to create a level playing field for offline retailers, and believe you can do so whilst simultaneously protecting the privacy of shoppers," she said.

At the moment, the outlook for Christmas 2011 is good. The Conference Board reported last week consumer confidence is up -- back to where it was in early summer, apparently bolstered by a few ticks downward in the unemployment rate, which fell to 8.6 percent in November, and virtually flat inflation.

"Granted, the economy is still sputtering, but slight increases in the employment rate mean fewer workers fear layoffs," ShopperTrak founder Bill Martin said. "While consumers are still extremely value-conscious, they clearly responded to retailer price reductions and 'door-buster' promotions."

The NRF said the weekend set shopping records.

"More consumers than ever turned out for retailers' Black Friday promotions, a promising sign for the economic recovery," NRF President and Chief Executive Officer Matthew Shay said.

The NPD Group Inc. reported much of that buying was self-gifting -- both on Black Friday and Cyber Monday.

BIGResearch, which conducted the NRF survey, reported 28.7 million people shopped online and at stores on Thanksgiving Day, up from 22.2 million last year, and 86.3 million hit brick-and-mortar stores for Black Friday deals, with the number of midnight shoppers up 9.5 percent.

"The appetite for these early openings is only getting stronger among holiday shoppers, and retailers did a great job providing Americans just what they wanted … the ability to shop on Black Friday without having to get out of bed before dawn," BIGResearch Executive Vice President Phil Rist said. "Consumers are clearly demonstrating their desire to spend this holiday season, and shopping early and often seems to be their new mantra as they seek the best value for all their holiday purchases."

The NPD Group Inc.'s Marshal Cohen attributed much of that shopping to "frugal fatigue."

"Consumers have been saving up and not shopping for months waiting for these deals and they scored," he said.

Retailers provided a running start to the shopping season, opening stores earlier -- some stores at 10 o'clock Thanksgiving night, with some even open Thanksgiving Day -- and starting promotions earlier in the week to build on increased retail sales in the two weeks preceding.

BIGResearch said department and discount stores were the biggest beneficiaries of consumers' largesse, followed by clothing, drug, grocery, electronics and craft stores.

Many consumers don't just buy anymore. The NRF said 37.4 percent research products and compare prices on their tablets and smartphones as they peruse the merchandise.

NPD Group reported 28 percent of consumers said they shopped online Cyber Monday, up from 21 percent last year -- and buying was also up, with 16 percent saying they made purchases, compared with 12 percent in 2010. Stores even got a boost.

However, per consumer spending took a hit last Monday, down to an average $187.83 compared with $276.71 last year.

"Cyber Monday turned into 'Hyper Monday' as both online and brick-and-mortar got healthy increases due to more shoppers even though they spent less," said Cohen, chief industry analyst for fNPD Group.

Electronics benefited most from the buying frenzy, up 10 percent from last year, NPD said.

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