With the first official shopping week behind us, what’s on the program for the rest of the holiday season? Will it be smooth sailing, allowing retailers to end the year on an upbeat, or is there dissonance ahead?
Like a classical concerto, Holiday 2011 appears to have three distinct parts. The first “movement,” which included Black Friday and Cyber Monday, was dramatically bold and exciting. More consumers – particularly the most value-conscious – did more of their shopping in those first days than in prior years. With stores opening at midnight on Thanksgiving, and shopping plans discussed at dinner tables around the country, it was hard for anyone to resist the urge to join the frenzy, particularly given the mild weather in much of the country.
Christmas is on a Sunday this year, offering an extra weekend day to shop which, weather permitting, should impart a rapid, joyous tempo to the finale. Too late for online shopping, the last week is typically when high-end and luxury stores experience a crescendo of activity. It’s also usually an important time for specialty apparel stores. Ask any Victoria’s Secret or Ann Taylor sales associate, and she’ll tell you that December 23rd is usually when the men show up in droves, looking somewhat sheepish and desperate for help. In 2010, according to MasterCard data on total retail purchases via cash, credit card and check, December 23rd was in fact the biggest retail sales day of the month.
The middle section of the season remains the big question here. Right now, and if you’ll forgive the relentless musical reference, it’s hard to imagine anything but a slow movement, maybe even in a minor key. Mall traffic has calmed down, and analysts are concerned that a lull in sales will cause retailers to begin discounting more deeply, cutting into quarterly earnings. Black Friday set the tone for a very promotional holiday season. How the next fortnight plays out will depend in large part on how well retailers sustain that momentum. Unfortunately, most consumers have been so conditioned to buy on sale that they hesitate to step into a store unless there’s a great promotion underway. And the retailers are stepping up to the podium: every day, it seems, there’s another big one- or two-day-only discount, both in-store and online.
What part will apparel play in all of this? Without the usual must-have electronic products hitting the market this year, and with e-books and iTunes quickly replacing physical books, CDs and DVDs, apparel remains one of the most popular items on shopping lists. Many gift cards, which are rapidly growing in popularity, end up being used to purchase apparel.
According To Hana Ben-Shabat, partner in the retail and consumer practice at consulting firm AT Kearney, between 35 and 45% of all holiday spending this year will be on apparel. “Apparel offers great value, and people are still being somewhat practical in their purchases,” she said. “Many will be giving coats, boots, shoes and other apparel and accessory items as gifts this year.”
When asked about all the festive metallic and glitter-embellished sweater, sportswear and accessories styles in the stores right now, Ben-Shabat cautioned: “Many of these are displayed to create a festive atmosphere and serve as holiday décor. If you look at the racks closely, there is not a lot of stock in these items. Most of the inventory is comprised of more basic styles.”
The National Retail Federation echoed Ben-Shabat’s bullish sentiment for apparel, citing its survey in which over half of all consumers polled said they would be buying clothing and accessories as gifts this year. To help things along, many department and apparel specialty stores, whose fortunes rise and fall on soft goods sales, offered tremendous reasons to buy last weekend. Ann Taylor had 40% off everything in the store. Macy’s 30%-off coupon plus bonus dollars for amounts spent over a certain level were a big hit. Kohl’s deals were similarly attractive.
Despite the market share inroads specialty stores have made at the expense of their bigger competitors, AT Kearney’s Ben-Shabat confirmed that, based on the firm’s research, almost half of all shoppers plan to visit department stores, twice the number for apparel specialty stores.
What’s on the horizon once the season’s over? One can conclude from recently released data from both The Conference Board and the government that consumers are cautiously optimistic. Confidence enjoyed a nice spike in November, and unemployment dropped by more than expected. Although personal income growth remains stubbornly low, Americans have paid down debt, gotten their financial houses in order – and are spending again.
They are also ready to turn the corner, mood-wise. According to Judy Galloway, managing partner of G-Group Marketing, publishers of the G-Ometer™ Trend Report , “Consumers across the country are telling us that though they may not see economic prosperity around the corner, they are ready to be HAPPY again and to make others happy as well. They are looking for products that make them smile. The shopping experience, whether in store or online, is a big part of the psychological pay off, and fashion-oriented consumers want an exclamation point on their purchases.”
That should be music to the ears of apparel merchants… Have a wonderful, successful and Happy Holiday season!
