Tuesday, November 27, 2012 | Edited by Daniel Moores
||Early Holiday Sales Pay Off, for Now
Retailers See Strong Weekend Traffic but Worry Spending Could Falter; Online Booms
Retailers reported a big jump in consumer spending over the Thanksgiving weekend as shoppers flocked to stores, snapped up online discounts and, according to some merchants, paid repeat visits to the mall.
But the overall increase wasn't as robust as last year's. And some indicators showed a decline in spending at stores on Black Friday itself, leading to questions about whether retailers' new tactics are simply shifting spending to different days and sales outlets.
Merchants with strong Web presences were positioned to be the big winners: for the first time, more than half of consumers said they shopped on the Internet over the weekend. Online spending on Friday alone topped $1 billion for the first time, according to the data-analysis firm comScore Inc.
Total spending for the weekend reached an estimated $59.1 billion, a 13% increase from a year ago, according to the National Retail Federation. Last year the group said sales rose 16% over the weekend.
A consumer survey conducted for the trade association by BIGinsight found that shoppers spent an average of $423 over the weekend, up 6% from $398 last Thanksgiving weekend.
A strong kickoff of holiday shopping isn't necessarily a sign that overall sales during the season will rise.
"I've seen it go both ways," said Beryl Raff, the chief executive of Helzberg Diamonds, a jewelry-store chain owned by Berkshire Hathaway Inc.
Retailers fret that sales later this year will be soft. "I fear we are conditioning the customer to shop only on this one weekend," said John Abt, co-owner of Abt Electronics, a large independent electronics retailer based in Glenview, Ill., a suburb of Chicago. Its Black Friday sales jumped 22%, he said, and Internet sales rose 64% on Thanksgiving.
Last year, retail sales got off to a strong start in November, rising 6.7% compared with the previous year. But sales edged down a bit in December, according to the U.S. Commerce Department, and in the end sales excluding autos rose 6% in December compared with 2010.
The economy still worries consumers and retailers, who expect total sales to grow at a slower rate than last year. NRF estimates holiday sales for November and December will increase 4.1% to $586.1 billion, compared with a 5.6% increase last year.
The group said it might revise its numbers upward if Congress passes legislation in the next few weeks that would prevent automatic across-the-board tax increases and government-spending cuts in the New Year.
"If this drags on to Christmas Eve, there is a real possibility it could have negative consequences for the rest of the season," said NRF President Matt Shay.
Online sales on Black Friday increased 21% over last year, International Business Machines Corp.'s Smarter Commerce arm found, based on data from 500 retailers, including 50 of the 100 largest web retailers.
But while the number of orders jumped, the average order size per customer shrank 4.7% to $181.22.
IBM said the average number of items in an order also declined, by 12% to 5.6 items, reflecting free-shipping deals offered by online merchants.
"It takes fewer items in a consumer's basket to get them over that free-shipping threshold," said Jay Henderson, strategy director for IBM Smarter Commerce.
Mercent Corp., which helps facilitate online sales for about 500 retailers including Home Depot Inc. and outdoor clothier REI, said its clients reported a combined 23% jump in sales directly and through other sites including Amazon.com Inc. and eBay Inc. That is about the same as last year's results, said Mercent Chief Executive Eric Best. On Thanksgiving itself, Mercent's partners posted a 32% increase, up from an 18% increase last year.
"Consumers aren't stupid. They are going to research products online first and buy it online if it's cheaper than going to a store," said Mr. Best, whose firm is based in Seattle. "The data this year shows that consumers are buying more frequently online and earlier online than they ever have before," he said.
An Amazon spokeswoman declined to provide specific sales results, but she said the company expects to have the "biggest" holiday selling season in its history.
At physical stores, shopping on the evening of the Thursday holiday proved popular with families as giant retailers such as Wal-Mart Stores Inc., Target Corp. and Toys "R" Us Inc. opened as early as 8 p.m. An analysis of card receipts by Chase Paymentech, a subsidiary of J.P. Morgan Chase, said sales at brick-and-mortar stores shot up 70% from a year earlier.
But the next day, in-store sales declined by 7%, Chase said. A similar result was reported by ShopperTrak, which measures foot traffic and estimates sales. It found that while more people shopped on Friday than last year, actual sales that day declined almost 2%.
Retailers that opened Thursday said it was worth the added expense.
"Our guests stayed longer and shopped more of the store, so the initial reaction is that it was the right thing," said Sid Keswani, senior vice president of Target's Southwest region.
Wal-Mart said that shoppers who came for "door-buster" deals on electronics and toys stayed to snap up housewares.
"I never thought I'd see so much passion for sheets or Rubbermaid storage containers," said Duncan Mac Naughton, the company's U.S. merchandising chief. The Bentonville, Ark., retailer said it had 22 million customers Thursday between 8 p.m. and midnight.
In Dallas, Elizabeth Etier and her sister Emily McKenzie said they had heard that some consumers and workers were angry that stores were opening earlier than ever on Thanksgiving Day, but they said they were grateful for Target's 9 p.m. opening. That was early enough for them to take along Emily's 6-year-old daughter, Anna Claire, for her first Black Friday experience.
"This is good family bonding and more fun than the Dallas Cowboys getting creamed," said Brad McKenzie, Emily's husband.
(Source: The Wall Street Journal, 11/26/12)
||Small Business Saturday is a Big Hit
There was nothing small this year about Small Business Saturday sales.
Small Business Saturday, when consumers are encouraged to support their local small businesses two days after Thanksgiving, gets bigger every year, says Small Business Administrator Karen Mills.
"We see tremendous momentum out there," says Mills. "This Small Business Saturday has really gone viral."
Small businesses can't usually compete with big-box stores' big sales on Black Friday, so many hope to use Small Business Saturday to get a piece of the action during the biggest shopping weekend of the year.
Small Business Saturday is the most important shopping day of the season for 36% of independent retailers, according to the National Federation of Independent Businesses. Only 24% say that day is Black Friday.
Leah Daniels, owner of Hill's Kitchen, says this Small Business Saturday was probably twice as big as last year's, and the store was packed all day.
"Color me a happy person," says Daniels. "Let's hope this means there's going to be a big holiday season."
Ross Steinman, psychology professor at Widener University, says the popularity of Small Business Saturday is a revolt against big-box stores from consumers who are willing to pay extra and see the money go to their communities.
"There's so much negative attention in recent years on Black Friday and the rampant consumerism that's associated with it," he says. "Small Business Saturday is a response to that."
Laura Smith, 52, says she's a big fan of Small Business Saturday. She spent the day shopping at all her favorite stores in Terrytown, Va., and was sure to have lunch at Can Can, a locally owned French restaurant.
"It was really pleasant. It was fun and kind of like back in the old days where people would just walk up and down the street visiting the local stores," says Smith.
Jim Brownell, VP of retail solutions for GT Nexus, says that Small Business Saturday is a great opportunity for retailers because there are "a lot of feet on the street," but it doesn't work unless they get the word out about promotions.
"It's unfortunately going to require some sort of service promotion or product promotion to draw people into the stores," Brownell says. "You can't sit back and hope that the SBA with all their advertising is really going to be the ones that will bring everybody in."
Alan Au, co-owner of Jimmy Au's For Men 5'8" and Under, a fancy clothing store for shorter men, had a big Small Business Saturday sale on pretty much everything, but refused to advertise the sale beyond individual invitations to customers.
"The more full the store is, the harder it is to help anybody," says Au. "I function a lot better with a steady stream of customers."
Nevertheless, the store was busy the whole day, and Au says it's a good indication December sales will be up as well.
When Au's store was in the Glendale, Calif., shopping mall, his Black Friday sales drew customers who were already in the mall to make other purchases. However, once the store moved to a street location in Beverly Hills, he found he was trying to compete with the big retailers at the mall, whose Black Friday crowds he previously relied on for customers.
"We tried to compete against that with some really killer deals, but we can't beat something like that," says Au. Now he holds the sale on Saturday.
(Source: USA Today, 11/26/12)
||Lower Prices and Larger Selection Boost Pre-Paid Mobile Phone Carriers
According to The NPD Group, lower prices and larger selection of smartphones at Boost, Metro, Virgin, and other pre-paid mobile phone carriers are causing a decline in pre-paid smartphone sales of new phones from AT&T, Verizon, T-Mobile, and other tier-one carriers.
In the third quarter of 2012, 70 percent of smartphone buyers who purchased their phones on a prepaid carrier had switched from a tier-one carrier.
Based on information from NPD's monthly Mobile Phone Track service, the overall penetration of prepaid smartphones rose from 39 percent in Q2 to 42 percent in Q3. Prepaid smartphone sales at prepaid carriers were up 23 percent over the prior quarter, while at tier-one carriers prepaid smartphone sales fell 12 percent.
Consumers who were replacing their mobile phones were more likely to have switched from a tier-one carrier (80 percent) than were first-time smartphone buyers (60 percent).
"Both AT&T and Verizon have introduced less-expensive prepaid offerings and Verizon has expanded its prepaid smartphone line-up, but questions remain whether it's too little, too late," said Stephen Baker, vice president of industry analysis at The NPD Group.
Top Smartphone Brands
Overall smartphone penetration rose from 66 percent last quarter to 70 percent in Q3. Much of the increase in smartphone penetration was driven by Android, which experienced a unit volume increase of 25 percent, as its share increased from 59 percent to 63 percent of the smartphone market. Apple's iOS unit volume rose 16 percent, and the company's market share remained steady at 31 percent.
According to NPD, the top-five smartphones in Q3 were as follows:
1. Apple iPhone 4S
2. Samsung Galaxy S III
3. Apple iPhone 4
4. Apple iPhone 5
5. Samsung Galaxy S II
While the iPhone 5 helped Apple maintain market share, the iPhone 4S and iPhone 4 also drove a considerable amount of sales, among first-time smartphone buyers and also among older iPhone generation owners.
"With just about a week of sales to record in the third quarter, the iPhone 5 had a notable impact on the market, but by no means did older iPhone generations suffer since carriers provided less expensive pricing for those models," Baker said.
(Source: The NPD Group, 11/15/12)
Daily Sales Tip: Be Human!
People buy from people, not from institutions. Advertisers often forget this, and are more concerned about their perfect "image" than about relating to their audience as fellow human beings.
It's not a perfect world, and listeners recognize this, so a commercial that tries to portray the advertiser as perfect, doesn't ring true.
Let the audience in on your little faults, the chinks in the armor. For example, the car dealer who says, "We have the best deals, the biggest selection, the friendliest salespeople, but...our coffee's not so good," allows the listener to discover his embarrassing secret. Don't be afraid to joke about your hard-to-find location, the tacky sign you inherited from the former owner, the boss's idiosyncrasies.
A little self-effacing humor can go a long way. Give listeners something to smile about. If a listener can say "Yeah, that's me. I've done that," you've established a bond. Now your audience is involved.
Poke fun at yourself and punch up sales.
Source: Veteran radio sales consultant Jeffrey Hedquist, founder and president of Hedquist Productions, Inc.