By and and and  on November 29, 2010

The consumer is back — at least for this holiday season.

And expectations for Cyber Monday, which is today, and a healthy Christmas overall were bolstered after the brisk turnout at stores across the country over Thanksgiving weekend. Retailers were propelled by sharp price reductions, particularly on electronics, as well as renewed interest in apparel, especially shoes, boots, cashmere sweaters, cold-weather items, jewelry and accessories. Colder temperatures and pent-up demand spurred purchasing.

Retailers were also surprised, and encouraged, by the amount of self-purchasing and the increase in men seen shopping. National Retail Federation executives gave an explanation for the gender bender, saying men, compared to women, are now more confident in the economy, have “looser" wallets, don’t bargain hunt as much and are more apt to seek bigger ticket items like electronics.

With consumers shopping a lot for them-selves this past weekend, retailers
optimistically believe many still need to get out and buy gifts for their families and friends.

However, they cautioned that the Black Friday period shouldn’t be regarded as a true barometer for what lies ahead, and noted that the 2008 holiday season was a bust even after a big Black Friday. “There’s just no guarantee,” acknowledged Terry Lundgren, chairman, chief executive officer and president of Macy’s Inc. But Black Friday, Lundgren added, “felt good, right out of the box.”

“While Black Friday weekend is not always an indicator of holiday season performance, retailers should be encouraged that a focus on value and discretionary gifts has shoppers in the spirit to spend,” said Matthew Shay, NRF president and ceo. “As retailers look ahead to the first few weeks of December, it will be important for them to keep momentum going with savings and incentives that holiday shoppers simply can’t pass up.”

The Black Friday weekend accounts for at least 10 percent of holiday sales, while 40 percent of the season’s sales occur between Dec. 15 and 25. Holiday sales overall generally account for in excess of 20 percent of retailers’ annual sales and at least 40 percent of the profits for many.

According to an NRF survey conducted by BIGresearch, 212 million shoppers visited stores and Web sites over Black Friday weekend, up from 195 million last year. People also spent more, with the average shopper spending $365.34, up from last year’s $343.31. Total spending reached an estimated $45 billion, in-store and online.

The NPD Group, the Port Washington, N.Y., market research firm, said the conversion rate (those shoppers that actually purchased) was up 4 percent over last year’s Black Friday weekend. “Conversion rates for Black Friday and super Saturday are always very high but to see growth of 4 percent over the year before tells us two big things: That those people that went to shop, bought, and that the retailers did a better job of luring consumers with big deals and great savings,” said Marshal Cohen, NPD’s chief industry analyst.

NPD’s survey of 1,768 consumers taken Friday and Saturday concluded that 33 percent of consumers bought items for themselves on Black Friday compared to 26 percent typically, setting the stage for growth this holiday, Cohen said.

However, any gains won’t come easily. Retailers are promoting as heavily — if not more heavily — than last year, knowing that consumers remain fixated on bargains and worried about the economy and their jobs. They also increased store hours, with many opening on Thanksgiving Day for the first time and benefitting from that, and stocking up on more products at the low end of their price spectrum, meaning they need to sell more units to sustain significant volume gains and offset margin-deflating promotions. According to analysts, department stores and apparel specialty chains saw greater traffic increases, compared to discounters.

While Cyber Monday should generate big business, many retailers said they don’t believe it will be quite the phenomenon it’s been in recent years because broadband usage is increasing in homes, and shopping in the office is being increasingly discouraged. Still, online sales have been growing all year, leading ComScore to raise its forecast for holiday spending online to gain 11 percent from the 7 to 9 percent initially expected, and for $32.4 billion to be spent online from November through December.

One retailer betting big on Cyber Monday is Sears, which called it the biggest online day of the year and devoted eight pages in its 44-page Sunday circular to the occasion, and laid out all the offers and options, from free shipping to buying online and picking up the items in the store. Sears, for the first time, opened stores on Thanksgiving Day, but kept the doors open just from 7 a.m. until noon. The extra hours worked. “Customers liked the fact that they didn’t feel as rushed to get their shopping done,” said Tom Aiello, divisional vice president, media relations.

“My feeling is we got an encouraging start to the season,” said Dana Telsey, ceo of Telsey Advisory Group. “We saw increased traffic. Specialty stores were more promotional than department stores. Promotions were planned very strategically with markdown rates planned carefully on specific, targeted items and not through the entire store. The cold weather helped sales of outerwear, boots and sweaters. It was a good start all around and encouraging, even with unemployment and housing issues. People seem a little looser with their dollar and lower price items appear to be selling well. Luxury was moving too.”

Craig Johnson, president of Customers Growth Partners, characterized last weekend as the best since 2005 in terms of year-to-year growth. “Our forecast for the season will be up 4.5 percent, which is above consensus but that’s edging up each day.” The growth rate in 2005 was 6.1 percent, he said.“There’s growth across [several] merchandise categories, including some that have been weak in recent years, such as home furnishings and home improvement.…Apparel is having its best year since 2007, and general merchandise players for the most part are back. I’ve seen great strength at Macy’s and Nordstrom. We think this is a return to a traditional Christmas, with strength in toys, TVs and sweaters. These are all signs of a solid Christmas. Inventories are relatively in line, costs are down, and with sales a little better than expected, that’s a recipe for a good bottom line.”


“We’ve been pleased. It’s generally good across the board,” said Pete Nordstrom, president of merchandising at Nordstrom Inc., when asked about the holiday weekend. Black Friday is among Nordstrom’s top 10 biggest volume days but not as significant as it is for other more promotional department stores, such as Macy’s. Pete Nordstrom said shoppers seemed divided into two camps last week — those buying gifts and those buying for themselves. “We had more of the latter,” he noted, citing categories that typically are not for gifts, such as shoes and lingerie, as performing really well. Regarding the rest of the season, “Just executing at the point of sale is the biggest thing,” Nordstrom said. “It’s a good opportunity to acquire new customers.”

“It was a particularly good weekend,” concurred Bloomingdale’s chairman and ceo Michael Gould. “Customers are buying a lot of products that certainly were in short order for the last few years. The customer is looking for fashion goods. I see it throughout the stores.” Gould also cited cold-weather items, designer handbags, fine jewelry and the beauty business as standouts. “Touch wood, people are in a good frame of mind. Maybe they denied themselves over a longer period of time than they wanted.” Bloomingdale’s is aggressive with promotions, but less so than last year. “We dropped a promotion in October and one in November and we feel terrific.”

At J.C. Penney Co. Inc., “The Christmas holiday shopping season has gotten off to a strong start,” said Myron E. “Mike” Ullman 3rd, chairman and ceo. “Across the country, consumers appear to be more eager to shop than the last couple of years.” Ullman cited “stylish gifts at sharp prices” as resonating with shoppers as well as a return to “self-gifting,” which had not been evident over the past two years. Bestsellers included St. John’s Bay cashmere-blend peacoats, priced $49.88, and cable knit sweaters, $9.88; Liz Claiborne sportswear from $15 to $49.50; a.n.a cold-weather coordinates from $9.99 to $12.99, as well as fashion boots priced at $29.99 and handbags starting at $19.99. Penney’s also did well with Sharper Image U Video cameras, priced at $48.88, and Vivitar microscope kits and telescopes, foosball and air hockey tabletop games, $18.88 each.

Macy’s reported that 7,000 people were outside the Herald Square flagship at 4 a.m. Black Friday, waiting for the doorbusters, compared to 5,000 at 5 a.m. last year, when the weather was better. “The big difference this year was that there were more men, and younger consumers, 15 to 25 years old, buying things for themselves, more than gifts,” said Lundgren. “For the past two years, consumers bought more based on price, things under $30, $20 or $15. There are a lot of deals out there. But it’s actually just the opposite this year. People are returning to quality. They want gifts they can be proud to give and receive. There’s a greater focus on the value relationship,” with items such as Tommy Hilfiger’s leather bombers, priced at $99. Macy’s did best with fashion watches, including those from Michael Kors, Fossil and Kenneth Cole; private label cashmere sweaters; Donald Trump shirts and ties, and mini-electronics like $19.99 waffle makers.

Lundgren said Black Friday will prove to be Macy’s biggest volume day this year, surpassing the Saturday before Christmas, which is sometimes bigger. He said the Saturday before Christmas this year is seven days before the holiday, likely reducing its significance. For Cyber Monday,“We expect to do well again. It’s a very big deal.”

“A lot of cold weather categories kicked in,” said Lord & Taylor’s ceo Brendan Hoffman, citing boots and cashmere sweaters, and double-digit increases last week and all month. “We just see customers out ready to shop. There is now a lot of optimism as we go into the homestretch. We are at or exceeding 2007 [volume] levels at this point. We’ve really tried to preplan the promotional calendar and make sure we’ve got firepower every week. That’s a big difference. Two years ago, it was more about reacting to everything.”


“The environment is much more stable than we’ve seen in the past,” said Saks Inc. chairman and ceo Stephen I. Sadove. “In our ability to forecast and get a sense of how the consumer is responding, there’s more predictability. She is focused on value but also focused on shopping. Traffic is gradually improving.There is going to be some good gift buying in the weeks ahead. It’s still not a highly robust environment, but it’s certainly a very different environment from what we’ve seen in the last few years.” He said the response was best to shoes and handbags, especially on sale goods and exclusives such as the Saks Fifth Avenue men’s collection. Sadove described cosmetics as OK, not as buoyant and not seeing the same degree of recovery as other categories but not required to since it was not hit as hard by the recession over the last two or three years. Sadove also said he felt good about some resort selling, which is at full price, though resort hasn’t fully kicked in yet.

Most of Neiman Marcus’ stores’ sales were on par with last year and some were ahead as shoppers responded to a promotion, said Ginger Reeder, vice president and spokeswoman. Online, Friday was Neiman’s highest traffic day of the year and “well ahead” of last year.

“Boots, handbags and cashmere appear to be the things driving the business, and great gifts to go across all categories — the ones on the gift tables [in the stores],” she noted. Neiman’s entered the Black Friday promotional fray last year by offering a gift card with purchase in the stores until noon. This year it extended the promotion two hours until 2 p.m., inviting shoppers to earn a $50 gift card good through Dec. 5 if they spent $100.

“The promotion that works best for us is one that gets our customers back in the store, not a doorbuster so much,” Reeder noted.

Online, Neiman’s tempted shoppers with a daily bonus for each of the four days ending today, as well free gift packaging, free returns and free shipping. Separately, Neiman’s has sold more than the usual amount of the publicity-oriented fantasy gifts since its Christmas Book dropped Oct. 5, including two $7,500 ukuleles, four $4,500 Tory Burch adult trikes, and a $9,500 arts tour of Marfa, Tex.

“I was nervous at first but the city really kicked in late in the day on Friday and Saturday. I ended up pleased with the weekend,” said Susan Davidson, ceo of Scoop. “Our customers are traveling again and we have begun selling resort product, but mostly it’s wear-now and customers shopping for themselves. The real strength is in cashmere sweaters and boots.” Some best-selling boot labels at Scoop include Stuart Weitzman, Nat Bernson and Rag & Bone, while on the apparel side, Azzadine Alaïa dresses, Missoni sweaters, Scoop’s private label fur vests and hats and Free City sweats have performed strongly.

Mark Werts, founder and ceo of American Rag Cie, said the upscale specialty retailer doesn’t “go on sale” for Black Friday. “Black Friday is for malls, not for specialty stores,” he said. Overall, however, Werts was optimistic about the holiday season and highlighted a rebound in housewares. “We have been up 10 to 20 percent all year, so I am going to guess we will be up 10 to 20 percent during the holiday season,” said Werts.

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