Holiday 2012: Part XI – What One Can Learn From Promtional Email 0

For my earlier holiday expectations see the following posts:

Holiday 2012: Part I
Holiday 2012: Part II
Holiday 2012: Part III
Holiday 2012: Part IV
Holiday 2012: Part V
Holiday 2012: Part VI
Holiday 2012: Part VII
Holiday 2012: Part VIII
Holiday 2012: Part IX
Holiday 2012: Part X

We’ve seen Black Friday evolve in several ways in 2012.  As I’ve written about elsewhere, Black Friday has gotten longer in several ways.  First, stores have moved their opening hour forward.  But stores have also expanded their Black Friday promotions in several other ways – many of which have to do with the timing of their promotional releases. As retailers have started previewing their official Black Friday circulars in advance, they’ve had to adjust other elements of their promotional cycle. This year promotions and marketing pieces were especially pronounced.  I think it is instructive to review promotional emails in sequence. here’s a week of analysis:

Initial thoughts on Black Friday 0

You can see my previous holiday expectations and analysis here:

Holiday 2012: Part I
Holiday 2012: Part II
Holiday 2012: Part III
Holiday 2012: Part IV
Holiday 2012: Part V
Holiday 2012: Part VI
Holiday 2012: Part VII
Holiday 2012: Part VIII
Holiday 2012: Part IX

Here are my initial thoughts on today’s (and really last night’s) Black Friday openings.  Last night I visited a BestBuy, ToysRUs, Staples, Office Max, Target, and two different Walmart stores over the first 12 hours of store openings. Lines both outside and within the stores were as bad as I’ve ever seen them. As I mentioned yesterday, shoppers were queuing outside starting as early as early Wednesday afternoon. BestBuy’s line last night wrapped around the entire building.  I’m not sure I’ve seen the lines ever extend that far.  There were likely some 750 shoppers in line. There was still a line outside a full hour after they opened the doors as shoppers continued to file into the store. ToysRUs and Target showed equally long lines at their respective open.  The first Walmart I visited is open 24/7 so the crowds had already filled the store by their first open (8PM) and only grew larger for their second open (10PM). I wasn’t able to make it to a Sears, but was told they also had longer lines than in the past.  Sears had some very well-priced doorbuster items including a 50″ HDTV at $300 so I wasn’t surprised by these reports.

The office supply stores continue to hold to their 5AM opens and they had crowds consistent or perhaps slightly larger than they experienced the last two or three years.  My personal impressions are that the office supply stores garnered larger crowds several years ago when Black Friday was less pronounced and they were some of the earliest stores to open.  It was also the era of “free” doorbusters and the office supply stores frequently offered several items that were free with rebate.  All-and-all, my own impressions and the reports I’m tracking from other markets suggest overall traffic was up from last year.

The traffic in 2012 did follow a slightly different pattern – the opens had the largest crowds (as usual), but there were still “crowds” throughout other windows of the evening and morning.  This year, the opens were probably larger than last year and the traffic trailed more quickly.  But I still think overall traffic this year was higher with more shoppers braving the stores.  CEA will publish research tomorrow that will either confirm or counter this.

Earlier this fall I predicted retailers would offer unique promotions in several windows as opposed to a single doorbuster period. In 2012, several retailers adopted that strategy. Walmart even had three circulars this year – one for each of their “opens.” I checked a Walmart at 5AM for their third doorbuster release of the morning. The store was nowhere near as crowded as it was at their 8PM or 10pm promotion releases, but the store still had lines for some items (including the TV offer). I rechecked a BestBuy at around 7AM and the store still had good traffic. The parking lot was nearly full and it appeared traffic would hold through at least the morning. While the biggest doorbusters were gone within minutes, there was still inventory for many of the Black Friday promotions.

My friends Ben Arnold and Steve Baker over at NPD have written their thoughts on Black Friday (see here and here). Baker suggests consumers aren’t interested in this additional timed promotions. My experience in the store isn’t consistent with that story. But I do think that it is becoming increasingly difficult for consumers to manage the plethora of timed offers both in-store and online.

As far as products/devices go,  tablets did extremely well as we expected. TVs also appear to have done very well – especially inexpensive ones. There seemed to be good demand across the full spectrum of screen sizes. Apple products were heavy favorites everywhere I checked. Laptops were heavily promoted and they seem to have done pretty well across a number of retailers. DSLR also showed some strength.  I agree with Ben’s assessment – consumers were passing audio generally even though headphones like Beats by Dre were slightly discounted and are high on holiday wishlists.  But I also think the inventory was strong for many of these categories so consumers might be coming back today or tomorrow for them. Consumers might also be looking toward CyberMonday or other online promotions.

Holiday 2012: Part IX 0

For more of my holiday expectations:

Holiday 2012: Part I
Holiday 2012: Part II
Holiday 2012: Part III
Holiday 2012: Part IV
Holiday 2012: Part V
Holiday 2012: Part VI
Holiday 2012: Part VII
Holiday 2012: Part VIII
Holiday 2012: Part IX

On Wednesday afternoon I visited several retailers in advance of Black Friday.  As many retailers have moved up their Black Friday opening times to Thursday afternoon and evening my visit was about 24 hours prior to their respective Black Friday openings.  Here are a few remarks on what I saw:

Holiday 2012: Part VII 0

For more of my holiday expectations:

Holiday 2012: Part I
Holiday 2012: Part II
Holiday 2012: Part III
Holiday 2012: Part IV
Holiday 2012: Part V
Holiday 2012: Part VI

As I predicted in my earlier writings,   a survey last week from Chase Paymentech, a subsidiary of JPMorgan Chase & Co., found that online companies are expecting the 2012 holiday shopping season to be better than last year. Fifty-nine percent of e-commerce companies surveyed expect better sales volume this season than in 2011, while almost half (47%) expect it to be better than pre-recession levels in 2007. The companies surveyed expect 6% of holiday sales to come from mobile commerce while 39% expect average ticket prices to be higher (with 45% expecting it to stay roughly the same).

Accenture released their annual consumer holiday shopping study. A few key results:

1) As I wrote about earlier, Thanksgiving Day will be a big online shopping day.  The Accenture study found that half (52%) of consumers would be willing to shop online if retailers offer discounts
2) The survey found a rising interest in shopping on Black Friday relative to the past two annual surveys in 2010 and 2011 suggesting interest around Black Friday could see a pick-up in traffic in 2012
3) About half (51%) of respondents have set aside cash needed to complete their holiday shopping
4) Accenture finds 56% of shoppers say they will search online for the best price and purchase online after seeing a product they want in a traditional brick and mortar store front.  Twenty-seven percent of these shoppers say they will make the purchase on their smartphones or tablets while still out shopping.  This seems like a very high figure.  Research from Traqline presented at CEA’s recent Research conference suggests showrooming (browsing in a brick-and-mortar storefront and then buying from a competing retailer online) is actually only impacting 4-6 percent of sales.
5) Tablets and smartphones will be used by 25% of consumers to complete some of their holiday shopping.  (Note: CEA research finds tablets are now owned by roughly 31% of U.S. households, so this is a very high figure suggesting most with a tablet will use it to complete some of their holiday shopping)
6) Consistent with CEA research, roughly 23% of U.S. shoppers plan to shop between Black Friday and the end of November.

Target and BestBuy both recently announced they will match competing online prices this holiday season.  For Target, the list of competitors is short. The price-match plan, which will be in effect November 1st through December 16th, is limited to identical products sold by a short list of online competitors including Amazon.com and the e-commerce sites of BestBuy, Toys “R” Us, and Walmart.

Consistent with my earlier comments linked above, the  Home Entertainment Source (HES), the A/V specialty division of the BrandSource buying group expects inventories to remain in line this holiday season. HES expects increased price enforcement by manufacturers through recently implemented UPP and multi-channel MPA policies to limit pricing promotions this holiday season within the mid- to premium-price tier segments.   I question if UPP will remain well maintained when companies are looking to capture some of the holiday purchasing  – especially in the face of a trying 2012 for some categories. Jim Ristow expects “retailers to supplement their tier 1 Black Friday buys with hundreds of thousands of off-brand SKUs which could support both a well-maintained UPP while at the same time remain competitive to capture those crucial holiday sales.

Attachments will be a big opportunity this season.  According to the official CEA forecast, I estimate soundbars will be up over 50%

NFR and BIGInsight polled consumers at the beginning of October. The recently released results found 36% would like to receive consumer tech or computer-related accessories as a gift this holiday season, compared with 35% last year. Gift cards were the most wished for present, cited by 61% of respondents, followed by apparel (49%) and books, CDs, DVDs, videos or video games (46%).Fifty-two percent of respondents said they plan to shop online, up from 47 percent last year, and more than a quarter plan to do as much as half their holiday shopping via the web, up from 24.4 percent last year.

Amazon announced they will hire 50,000 seasonal workers at its fulfillment centers across the U.S. this quarter.

Holiday 2012: Part VI 0

You can start by reading more here:

Holiday 2012: Part I
Holiday 2012: Part II
Holiday 2012: Part III
Holiday 2012: Part IV
Holiday 2012: Part V

Last week Time provided a quick overview – much of which I covered in depth in my previous posts.  The article relies heavily on the report from Booz & Co.

The retail labor picture remains murky. Applications have dropped sharply since last year.

Kmart and Sears expect sales to increase 3.3 percent during the holiday season – roughly inline with overall holiday projections. Kmart and Sears are eliminating layaway service fees, starting a layaway home-delivery service and are employing new in-store mobile applications.  Staff carrying tablets will be able to check inventory, access product information and assist with checkout.  The company expects the 2012 holiday season to be the busiest shopping season since 2007.

Holiday 2012: Part V 0

I’ve being covering the holiday outlook here:

Holiday 2012: Part I
Holiday 2012: Part II
Holiday 2012: Part III
Holiday 2012: Part IV

NRF released a holiday sales forecast of 4.1 percent for 2012. This is below the 5.6 percent growth seen in 2011, but is above the 10-year holiday sales growth average of 3.5%. NRF also expects retailers will hire between 585,000 and 625,000 seasonal workers, compared with the 607,500 seasonal employees hired last year.

CitiGroup believes online holiday sales will increase at least 20 percent.  The article included a few good statistics. CitiGroup expects mobile-aided online shopping will have a limited impact on holiday shopping.  Mobile retail is expected to grow from $10 billion this year to $31 billion in 2016.  By 2016, seven percent of total online sales will come through mobile devices – up from three percent in 2012 according to Forrester Research. total online-retail sales accounts for about seven percent of total retail sales. sales through social networks will increase 93 percent from $1 billion last year.

A survey from CouponCabin.com and Harris Interactive find  nine percent of respondents are very likely to purchase items on layaway this holiday season with another 29 percent saying they might. Fifty-four percent said layaway helps them buy larger items they couldn’t afford to buy all at once, 52 percent said it helps with budgeting, 46 percent said it helps them avoid using credit card. 43 percent said it helps to with planning ahead and 43 percent like being able to reserve a popular item.

 Target announced their top 20 toys (Walmart and Toys”R”Us previously released their top holiday toys list as I covered in my previous holiday posts).  Target has also added QR codes so shoppers can scan the toy in-store, buy online, and have it shipped for free.   Target also introduced a new tool to create and share wish lists.

Toys”R”Us announced they will price-match in-store competitors or lower online prices available on Toysrus.com or Babiesrus.com.  Toys”R”Us also announced the launch of a new digital entertainment service.

A recent Booz & Company survey covered in Strategy+Business provides a few insights on the upcoming holiday season:

  1. Sixty-one percent of consumers say they have “learned to live with less” (up from 53 percent last year).
  2. Consumers are expecting bargains: 73 percent of consumers expect to find great deals this season (up from 62 percent last year).
  3. Fifty-three percent intend to buy at least one luxury item (up from 41 percent last year).
  4. Sixty-one percent expect to get together with family this year (up from 54 percent last year), and they are looking forward to throwing more parties: 53 percent expect to host multiple gatherings for family, friends, and neighbors (up from 45 percent last year).
  5. Forty-two percent of consumers reporting they intend to buy clothing as gifts (up from 37 percent last year). Consumers appear to be inclined to buy apparel later than they did last year — many waiting until well after Black Friday.
  6. Thirty-eight percent of consumers have electronics at the top of their personal wish lists. Tablets and smartphones top the list of those wanting electronics.
  7. Interest for home entertainment also appears strong – 62 percent of respondents report that they will be shopping for these items.
  8. As CEA has reported on in recent years, downloadable gifts are growing. More than 45 percent of shoppers expect to give at least one downloadable gift this year.
  9. More than 80 million shoppers plan to purchase gift cards this year, about 4 percent more than last year.
  10. Booz reported 40 percent of consumers now describe showcasing (ie showrooming) as their shopping strategy.  Booz believes multichannel shopping will also increasing in popular.
  11. thirty-two percent of shoppers are proactively planning to regift.  Thirty-one percent of shoppers view regifting as an acceptable form of gift giving (versus 25 percent last year).

 Booz also offered several suggestions to retailers. Here are a few that I think are relevant:

  1. Develop seamless digital and physical experiences.  Retailers continue to approach their online and brick and mortar stores as separate business lines, but consumers view these as the same business/retailer.
  2. Offer “buy-it-now” promotions at the shelf to turn browsers into buyers or to drive customers in your store to your website.
  3. Ensure sales associates are intimately familiar with the company’s website and mobile offerings (such as apps) so that they can help customers navigate between all retail channels in real time. As Booz writes, “in a multichannel world, nothing alienates a consumer more than a blank stare from a salesperson in response to “Well, on your website it says…”

 

Holiday 2012: Part IV 0

This is my fourth installment on the 2012 Holiday season.  You can see my previous comments here, here, and here.

Christmas stocking is underway (and had been more weeks in some cases).  The Consumerist has photos of Christmas displays going up in some Kohl’s and Walmart stores as early as September 21st.

As I wrote in my earlier posts – expect political advertising to crowd out some/most holiday advertising. This will be especially true in the battleground states.  Following the election (and with the presumption that there are no hanging chad-like issues), expect the media (and advertising) to shift swiftly to the holiday selling season.  Ad Age recently reported on the same thoughts.

Imports trending higher? Came across an older note on imports trending up headed into the holiday season.  I need to check where these figures are today and see how consumer tech imports are looking, but rising imports are frequently tied to discretionary purchases and are a positive sign of a consumer willing to spend.

The collective bargaining agreement between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) which was set to expire on September 30th, has been extended for 90 days so talks can continue. This will hopefully avert potential port strikes in 14 East and Gulf Coast ports during the crucial holiday season. While the East Coast ports aren’t as important for consumer tech as the West Coast ports, any backlog during the holiday season has the potential to hurt holiday sales.

Toys”R”Us recently announced they plan to hire 45,000 seasonal workers this holiday. That figure is up from 40,000 hired during the 2011 holiday season.

Macy’s announced they would hire 80,000 seasonal workers – up 2.5 percent from last year.

I wrote previously about ShopperTrak’s estimate that retail sales for consumer electronics and appliances would be up in 2012, but would not grow as fast as overall retail.  They also estimate store traffic will be lower by eight percent.  They credit this to more “targeted shopping excursions and the continued migration to e-commerce.”  A continued move to e-commerce is logical enough, but I actually wonder if online-to-in-store-pick-up will be more pronounced this year.  I also wonder if shoppers will be out more in general.  As attitudes improve, consumers should be more inclined to “browse” and window-shop.

Deloitte is out with their holiday predictions. They are predicting holiday retail sales will be up 3.5-4 percent which is below last year’s rate of 5.9 percent. Like ShopperTrak, Alison Paul of Deloitte did suggest consumers might reduce trips to the store in response to higher gas prices.  I need to check where miles driven are right now.  I’m not sure it has declined recently in the face of higher gasoline prices.

Deloitte also believes mobile-influenced retail store sales will account for 5.1 percent, or $36 billion, of this year’s holiday retail sales.

 

 

Holiday 2012: Part III 0

My first two posts on the 2012 holiday season can be found here and here.

News out this week suggests things are looking “ok” as we head toward the holiday season.  I recognize the term “ok” is not a highly technical term, but I’ll publish my finalized retail sales forecast shortly and I don’t want to say “great,” because I think there are still many headwinds of which I’ll write more about in a future post. But first, onto some of the recent news that helps paint a picture of how the holiday season is shapping up.

Walmart announced plans to boost season hiring in 2012. Walmart plans to hire more than 50,000 seasonal associates which is up slightly from 2011.Target plans to hire 90,000 seasonal employees which is down just slightly from the 92,000 seasonal staff it hired in 2011. Kohl’s plans to hire 52,000 seasonal workers in 2012.  hhgregg plans to hire 1,000 seasonal employees and complete those seasonal hires by early October.

A recent survey by Snagajob finds more season jobs will be available this holiday season than in any of the previous five years. The survey found  63 percent of hiring managers will make hires this holiday season, the highest percentage in the Snagajob five-year survey and up 12 percentage points from last year (51 percent).  The hiring managers surveyed expect to hire 6.1 seasonal workers on average – a 50 percent increase over 2011 and a nearly 100 percent increase over 2009. According to the study, among the hiring managers who will be hiring, 57 percent expect to complete their hiring by the end of October. The same figure was 46 percent in 2011 which might suggest companies are expecting to satisfy their seasonal hiring earlier this year. The survey found nearly half (49 percent) of the seasonal positioned fulfilled will be for full-time hires.

The push to have seasonal hiring largely complete by October could suggest an early push to holiday promotions as I mentioned in my previous posts.  It could also be designed to get these new hires educated and trained in advance of the real holiday push in November and December.

Expect to see an expansion of retail storefronts this holiday season. This will keep retail continuously in front of consumers and within easy reach which should help contribute to positive retail sales this holiday season.  But it could also mean that retail sales dollars are spread across more retailers putting pressure on metrics like same-stores sales.  Best Buy plans to open 33 additional Mobile Best Buy stores in October and November. Microsoft is planning to open over 30 pop-up stores for the holiday season.

As I wrote about in my first two installments on 2012 holiday predictions, online versus brick-and-mortar is going to be an important battlefield in 2012. For the next three months, multichannel is the operative word.  Walmart announced this week that it would discontinue carrying the (Amazon) Kindle.  Target announced the same policy a few months ago. LG recently announced it would implement a new unilateral pricing policy (UPP) for LG-branded goods sold online.  LG noted that certain high-end products, such as the recently announced 84-inch 4K LCD TV and most-likely the 55-inch OLED TV still slated for introduction later this year, will not be available for online distribution. These moves by Walmart and LG together with moves by other manufacturers and retailers, have different purposes but all come down to the desire of manufacturers and retailers to differentiate the roles of online retail and brick-and-mortar retail – especially this holiday season. Related to all of this, comScore published research last week showing four in five smartphone users accessed retail content on their smartphone devices in July. Topping this list was Amazon with an audience of 49.6 million visitors, followed by eBay (32.6 million visitors) Apple (17.7 million visitors), Wal-Mart (16.3 million visitors), Target (10 million visitors) and Best Buy (7.2 million visitors).

Finally, last week Booz & Co. unveiled holiday-related research and predictions for 2012 holiday season. Related to the battlefield between online and brick-and-mortar, Booz found 40 percent of of surveyed consumers consider browsing in-store before buying online their shopping strategy. Many of their findings are consistent my previously posted predictions:

  1. consumers remain skittish – 52 percent of consumers will closely consider affordability in their shopping decisions
  2. consumer expect deals – 73 percent of consumers expect to find great deals this season, compared with 62 percent last year
  3. gift cards rule – More than 80 million shoppers plan to purchase gift cards this season, about 4 percent more than last year
  4. Consumers will give digital media this year (something CEA captured research on during the 2011 holiday season).  Some 45 percent of consumers expect to give at least one downloadable gift (i.e., an e-book, a music download or a movie)
  5. Fifty-three percent of consumers intend to buy at least one luxury item (up from 41 percent last year)
  6. Consumers are looking forward to the holiday more than last year; 53% expect to host multiple gatherings, compared with 45% last year

Booz & Co. also outlined the important role multichannel retailing is going to have in 2012. The report provided a laundry list of approaches retailers could take.

1Page 2 of 5345