Black Friday was big but “Black Monday” revenues might be even bigger.
And the stores need it badly, considering the holiday season has been up and down since the day after Black Friday and highly promotional even before. Traffic, industrywide, has been down 1.8 percent from last year, according to ShopperTrak, which monitors sales and traffic. Also, concerns about margins at chains such as Abercrombie & Fitch, J. Jill, Chico’s, Gap, Talbots, J.C. Penney and Sears, are rising as Macy’s, Nordstrom and Neiman Marcus take market share.
“It’s disgraceful. It’s sale, sale, sale. Retailers are desperate. It’s like a race to get to the bottom,” said one specialty store chief executive officer. “Without a discounted price, no one is spending and everyone is discounting.”
“It’s choppy,” said one department store senior executive, describing the pattern of holiday selling. “I am not unhappy with business but you don’t see me doing cartwheels. Mall traffic is down due to everything that’s going on in the world including the warm weather.”
“Online has definitely impacted store traffic. It’s reducing the number of stores people visit,” said Bill Martin, founder of ShopperTrak. “Consumers have incredible access to information through tablets, computers and smartphones and do most of their window shopping virtually. They’re not wandering malls to gather information. That’s reduced traffic, but conversion rates are higher and sales are rising, but increases are small.”
“We see half of the national retailers engaging in unprecedented promotion activity suggesting their numbers are down and engaging in deep discounts eight days earlier than last year that were once reserved for the after-Christmas sales,” observed Nancy Puccinelli, associate fellow at Saïd Business School of the University of Oxford in the U.K.
Malls were packed and some pickup in the stores occurred last week due to Super Saturday’s blitz of discounts averaging 40 to 50 percent, as well as Hanukkah, which begins today, and Christmas just days away. But Monday — the day after Christmas — could be the perfect storm. A wave of post-Christmas clearances offering the year’s steepest markdowns will be unleashed, and it’s a day off for most people, meaning there’s time to shop and extended store hours will further the frenzy. Black Monday also marks the first major day for redeeming gift cards, which is when retailers book them as revenues. Typically, gift cards encourage consumers to select more freely than they would otherwise.
Black Monday volume is projected at $29 billion, compared with Black Friday, which came to $27 billion, according to Customer Growth Partners. Super Saturday’s volume hit $26 billion. “Black Monday is going to be huge,” said Craig Johnson, president of Customer Growth Partners. “We think it’s being underestimated and that retailers will experience the best post-Christmas week ever. The only question is the amount of the returns and typically there is a fair amount of redemption for cash, which varies depending on the store.” Given the economy, consumers may opt for more cash or credit, rather than exchanges.
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“December 26 will be a huge shopping day, as big as Black Friday,” predicted Lou Amendola, chief merchandising officer of Brooks Brothers. “It’s going to be a later Christmas than in the past and it will definitely spill over into the week after Christmas. Last week, we experienced a stronger comp than the first two weeks of December. However, most of it was driven by people shopping online, where there was a tremendous increase. Definitely the toughest sector is the traditional retail malls.”
“We will continue to have promotional prices for our customers through the New Year,” said Shin Odake, ceo of Uniqlo U.S. “Our continued bestsellers are cashmere, ultralight down and Heattech. This past week, women’s and men’s pants such as leggings and Heattech jeans sold very well. We suspect this will continue.”
“We are preparing for a last-minute rush with three days of ‘Mad Dash’ last-minute gift sales,” which began Monday at 9 p.m., and continue through Wednesday,” said Susan Lyne, chairman of Gilt Groupe. “These will be sharply discounted items.” Gilt’s postholiday sale begins Dec. 26. “This will be across all business units,” Lyne said. “The first and second weeks of December were the two biggest weeks in our history, so last week as a whole did drop off somewhat,” said Lyne. “Still, we performed significantly higher than last year. Weekend to weekend though, we are relatively flat.”
Wal-Mart’s clearance event starts Dec. 26. Seasonal decor, toys and apparel will be marked down by 50 percent and most stores open at 6 a.m. For the last-minute gift shoppers, “We have a grab-and-go area for gifts such as perfume and bath and body sets. It’s at the front of the store. We’re making it really accessible,” said a spokeswoman.
On the same day, Brooks Bros. launches its semiannual sale offering 40 percent off storewide. “We don’t have huge expectations for Saturday. Friday will be a very good last-minute day, but all of our [promotional] emphasis is the week after Christmas,” Amendola said.
Next weekend, Ideeli.com will stage a Red Sale with prices in key categories reduced further than this week. “We also have a lot of spring product,” said Barbara Levy, vice president of retail. But last weekend “was our gift rush because Saturday night was the last time we guaranteed shipping” in time for Christmas, Levy noted.
“Last-minute shopping is intensifying. Consumers are waiting for promotions, holding out for better deals,” said Puccinelli, leading to stress and “superficial shopping” at great expense to consumers and retailers because it focuses on packaging rather than the product and its appropriateness, or is unduly swayed by sales associates. She advised retailers to reduce variety so shoppers don’t get overwhelmed with options; maintain well-stocked shelves; add extra staff; organize products by consumer types such as gadget or pet lovers, and bundle products like Champagne and chocolate or wine and glasses for creative gifting.
Arnold Aronson, managing director of Kurt Salmon, said stores are better prepared for the rush this year. “The selling environment is improving. Attitudes among sales associates are friendlier. They’re better trained, more accommodating and will walk you to the merchandise.”