A First Glimpse of Holiday 2012

Last week, ShopperTrak was the first out of the gate with official holiday projections. ShopperTrak is expecting holiday retail sales during the November/December period to grow 3.3 percent and foot traffic to increase 2.8 percent over the same period a year-ago.

In other holiday-related news, a survey by the consulting firm Hay Group suggests some retailers plan to increase the number of temporary workers this holiday season. According to the results, 57 percent of retailers who participated said they would keep staffing levels consistent with the prior year while 36% plan to increase hiring. Seventy-five percent of respondents said their holiday sales would be higher this year compared to 2011.

Finally,Walmart unveiled its top toys last week. Topping the list is FURBY (though it isn’t on my list), followed by Leapfrog LeapPad 2, and VTech InnoTab Learning App Tablet.  It is worth noting that two of the top three items are tablet-esque devices designed for children. Toys “R” Us hasn’t yet released their top 50 “hot toy” list, but they have announced a forthcoming hot toy reservation service which lets parents reserve (with a 20% down payment) prespecified “hot” toys this holiday season.

Both Walmart and Toys “R” Us have touted their free layaway program (Walmart rolled back their layaway fees after Toys “R” Us announced their free layaway program).

It is shaping up to be a very competitive holiday season – not a surprise given the strained economic climate.  Unemployment remains elevated, wage growth is stagnant, and both consumers and businesses remain skittish.  Despite some signs of an improving consumer (which I’ll talk about in a future post), there remain a plethora of uncertainties (elections, Europe, geopolitical, etc).  There also continue to be a variety of headwinds (weather events like droughts, etc) that have arisen seemingly out of nowhere over the last three or four years of the economic recovery.

Here are a few of my early Holiday 2012 expectations and tech predictions:

More shopping days between Black Friday and Christmas should marginally boost holiday shopping

Retailers will open (even) early for Black Friday in 2012.  Last year several retailers opened earlier than they had in 2010 and I expect this to continue marginally in 2012.  In 2011, Toys “R” Us opened at 9PM on Thanksgiving night after opening at 10PM in 2010.  I wouldn’t be surprised if Toys “R” Us opened at 8PM in 2012.  Best Buy and others moved from a 5AM Friday opening to a Thursday midnight opening in 2011.  Overall, most retailers were happy with this move as it drove additional traffic and store sales.  Consumers also generally seemed to like “staying up” instead of “waking up” to shop.  With additional shopping hours, the year-over-year comps looked good.  Retailers will need to open as early (if not earlier) in 2012 to address year-over-year comps. They need to allow for the same or more shopping hours.

Weather could play a big role for Black Friday.  Last year the weather was very mild in much of country for much of the holiday season but especially during Black Friday weekend.  This contributed positively to Black Friday traffic and sales.  Mild weather could once again support a strong Black Friday, but cold weather could be a major headwind to year-over-year growth.

Online will be more pronounced than ever. Last year, consumers turned online during Thanksgiving Day to research deals and shop online.  I expect online activities to be more pronounced in 2012 – with greater online traffic on Thanksgiving Thursday and higher sales.  Beyond Black Friday, I think online traffic will be up across the board.  I expect to see retailers offering timed (ie temporary) deals and offers throughout November and December.  These could even begin to accelerate in October. In the past I’ve referred to these timed offers as the “Groupon Effect.”

The November elections will impact the holiday season. Regardless of your own political affiliation and who wins or loses in November, I believe the elections will push early holiday shopping that might have traditionally taken place in early November to the back-half of November and into December.  ShopperTrak alluded to this effect as well.  Late October and early November will be dominated by campaign ads and not retail-oriented ads.  Individuals will be preoccupied by the election and the uncertainty thereof will dampen the desire to shop.

Tech Dominated by Tablets, Smartphones, and Computers. CEA will release their official holiday expectations next month including what tech products consumers are most predisposed to buy.  I expect that research will show consumers are very interested in buying tablets, smartphones, and computers this holiday season.  I’ll write more about this in future posts.

Retailers will have a focus on exclusives and house-brand items in 2012.  Walmart recently announced they would have 150 exclusive items in their toy department.  Toys “R” Us recently announced the launch of Tabeo.  I expect retailers to push the value proposition of house brands.

more to follow……