Sears Holdings is expanding the availability of its in-store professional apparel shop to 91 Sears and Kmart stores nationwide. Revealing of their core shopper.

Over the last 2+ years, Wall Street analysts have pounded BestBuy on the size of their big box store fronts.  Best Buy recently announced another 42 store closures – bring to 50 the total stores that will shutter in 2012.  Best Buy has also worked over the last year to shrink their footprints.  In some instances they have sublet some of their store square footage and in other instances they have given space back to the landlord.  In their announcement last week, they recommitted to build out the smaller-format Best Buy Mobile store concept and remodel existing stores with a new Connected Store format.

But are overall square footage and the footprint of their stores, the key issue?  Wall Street’s motivation is driven by shifting dynamics within the consumer electronics space.  Sales of large-format devices like televisions are declining while small-format devices like smartphones and tablets have driven overall industry growth for the last two years.  As small-format devices dominate, Best Buy – as the Wall Street logic goes – should reduce square footage because smaller devices suggest less showroom space is necessary.

Beyond form-factor changes, the current (and temporary) decline in television sales and increase in sales of mobile-oriented devices have also had other impacts on consumer tech retailing.  Importantly, more retailers are merchandising these mobile categories.  While 5-6 retailers might offer traditional devices like televisions, mobile phones and tablets are being sold by these 5-6 traditional retailers and are additionally being sold by a host of “new” tech retailers.  These new tech retailers include cellular carriers through their stores and websites.  Manufacturers are also increasingly marketing devices directly to consumers.  Apple iOS devices and Amazon with their suite of Kindle devices are only two examples of manufacturers going directly to consumers.  In both of these cases, these companies have strong retailer ties.  While Apple started as a manufacturer and has also transitioned into a retailer and Amazon went the other direction – the end-state is similar with the manufacturer of the underlying device having a strong and unique presence as a retailer. It is also commonly reported that margin differentials between devices like televisions and smartphones and tablets are pronounced.

The consumer tech landscape is ever-changing and at different times over the last 50 years, these changes have dictated a changing approach to consumer tech retailing.  The current changes are surely pronounced, but it isn’t clear to me that less square footage will address the true underlying changes.

My title is a bit deceiving – retail sales definitely do show strong seasonal trends driving by year-end holiday buying. As the chart makes evident, retail sales are very seasonal.  For GAFO, which represents stores that specialize in department store types of merchandise (furniture & home furnishings, electronics and appliances, clothing & accessories, sporting goods, hobby,
book, music, general merchandise, office supplies, stationery, and gift stores), December sales represent about 12 percent of the annual total retail sales and November and December combined represent about 21 percent of annual retail sales.

At the same time, consumer surveys suggest consumers are continuing to push purchasing later into the year.  In just the last few years an increasing number of consumers are reporting they are beginning their holiday shopping later in the  holiday season (and therefore later in the year).  This would seem to suggest that we would see a greater portion of annual retail sales represented by November and December.  As I recently wrote, consumers are increasingly delaying their purchasing in anticipation of deals, discounts, and bargains that materialize later in the holiday selling season (ie Black Friday). But when one looks at the contribution November and December sales make to annual retail sales the share for November and December doesn’t appear to be changing  – at least not according to the official statistics.

For the last 18 years, CEA has conducted and published a holiday outlook. This research has revealed that overtime consumers are starting (and likely ultimately finishing) their holiday shopping later in the year.  Over time fewer are starting their holiday shopping in September and October and more are beginning in November and December. I credit this shift to shoppers waiting on deals and other promotions. Certainly the growth of Black Friday contributes to this phenomenon.

The Wall Street Journal recently reported UPS is also expecting shopping to be pushed later into the shopping season.  To quote the WSJ report:

United Parcel Service Inc. forecast what it called a “solid” holiday shipping season Monday, saying volume during the hectic week before Christmas will be up 6.2%  from last year. It also said it will boost seasonal hiring 10% to 55,000 temporary employees.

The Atlanta-based company didn’t provide an overall forecast for the traditionally busy period between thanksgiving and Christmas, saying the peak shipping season has been shortened because consumers are increasingly shopping
online and delaying purchases until late in the year.

“Before the explosion of e-commerce, the holiday peak season stretched from Thanksgiving to Christmas, [but] now it’s been compressed to the last two weeks before Christmas,” the company said.

It forecast 120 million deliveries during the peak week, up from 113 million last year.

UPS also said its global delivery volume “will approach” 26 million packages on what it anticipates will be its busiest day of the year, Dec. 22.

Read more here.

Here’s the article.  All are sound except #9.