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There’s not much time for retailers to get it together.

This story first appeared in the November 12, 2014 issue of WWD. Subscribe Today.

With two weeks until Thanksgiving, executives are feeling uncertain about the looming holiday season and frazzled after what’s been an up-and-down 2014. Many have pressed the panic button already, unleashing a plethora of one-day sales, circulars, friends-and-family discounts right after Halloween, as if it were Black Friday.

“It’s going to be a challenging holiday season. Given the trends we saw in back-to-school, it doesn’t seem like the consumer has completely recovered or reverted back to the good old shopping days,” David Jaffe, president and chief executive officer of the Ascena Retail Group Inc., told WWD.

“It’s absolutely concerning me that the sales have started so early,” said one president of an international apparel chain, who requested anonymity. “Walking past H&M, I saw it was 70 percent off. If you haven’t engineered your markdowns, you can have a rough time with the margins. Otherwise, I don’t know how you survive this marketplace where everybody is 70 percent off.”

People are cutting back on self-gifting,” said Pam Goodfellow, principal analyst at Prosper Insight and Analytics. “Consumers spent an average of $134 on themselves last year and will spend $126 this year” during holiday.

“My sense is it’s a stressful time for a lot of customers. They feel a certain amount of pressure to accomplish gift-giving, and may even resent it,” said Kevin McLaughlin, cofounder and creative director of

J. McLaughlin. “The vibe I give is to provide a level of service to take the stress out. You do it by engaging people, listening to them, and having a sense of who they are buying gifts for. We also have complementary gift wrap. It’s all about making this a stress-free, pleasant environment for the shopper.”

Good luck with that. The season is complicated by economic and political cross-currents either encouraging or discouraging spending. Consumers are feeling distracted by world affairs, bummed by low real income growth and food inflation, and anxious or indifferent about shopping. They want ways to bypass the hassles.

“Confidence for lower-income consumers remains a bit of a drag,” said Ellen Zentner, senior economist at Morgan Stanley, at a recent Retail Marketing Society presentation.

Click Here for a Slideshow of Holiday Hopefuls — Products With a Point of Difference >>

Discretionary income is up just 0.1 percent from August 2013 to August 2014, while disposable income is up 4.2 percent, according to Morgan Stanley. Obamacare health plans that many signed up for will pull money out of retail spending.

On the other hand, consumers aren’t dealing with the tax increases they faced last year; two millions jobs were added in the U.S. this year, and gas dropping to an average of below $3 a gallon will add $40 billion in fourth quarter income. In addition, emerging technologies across channels could spur some business, i.e. wearable tech; beacon technology emitting digital messages to smart phones about deals and events right when shoppers are in the store; co-creation technologies for customizing products with monogramming, prints and color options, and apps and “buy buttons” so customers can shop right off social media sites.

“It’s about social media that drives you to buy,” said Leslie Ghize, executive director of the Tobe Report. In terms of marketing via social media, “try to be meaningful on a few number of platforms. Pick your spots,” Ghize advised.

The experts say Christmas 2014 won’t be a disaster but it also won’t be anything to write home about. Estimates from retailers and analysts on total holiday 2014 sales gains now hover around 2 to 3 percent, which is better than last year’s meager 0.87 percent gain – although the predictions last holiday were bullish to begin with too. Retailers also came out with very thin margins last year. To improve profitability, retailers typically shoot for at least 3 percent gains.

Among the likely winners for holiday: Macy’s, Nordstrom, L Brands Inc., Michael Kors, Athleta, Under Armour, The North Face, Timberland, Uniqlo, Canadian Goose, Moncler, Home Depot and Costco. Wal-Mart and Target should do somewhat better, benefitting from easy comparisons to their bad 2013 holiday runs, and a tailwind this year from lower gas prices.

Among the likely losers: teen, mass and moderate chains such as Sears Holdings Corp., J.C. Penney Co. Inc. and Abercrombie & Fitch Co.

Neiman Marcus and Saks Fifth Avenue should come out OK based on the stock market being up and their affluent customers feeling rich.

“It’s been all about friends and family,” said one executive from a designer firm, discussing luxury retailing. “Designers didn’t sell enough pre-fall and fall at full price. That’s the biggest problem. They’ll be getting the Christmas business out of markdowns of pre-fall and fall runway, and whatever resort they can sell at full-price. Maybe Cucinelli and Valentino did OK [through fall] but I’m not sure about everyone else.”

In terms of merchandise, apparel is a trouble spot for most retailers. The majority of women’s ready-to-wear, particularly the midtier, as well as much of denim, and basics will remain weak; higher-priced and contemporary apparel are expected to stay stronger. For fashion to sell, there must be an element of newness or novelty.

“The trend in apparel is not improving and that’s putting more pressure on center core, accessories, cosmetics, giftables and home furnishings,” observed Arnold Aronson, managing director of retail strategies at Kurt Salmon. The “saving grace” in a season of prolonged promoting, Aronson said, “is that the strongest companies have found ways to improve profits on marginal revenue gains — aggressive buying in the marketplace, engineered promotions covered not only by vendors but in their own private-label programs, and technology innovations that increase the productivity of people.”

Aronson cited back-of-the-house functions such as logistics, distribution or merchandise handling as getting more efficient, as well as selling-floor enhancements such as associates manned with handheld devices for mobile checkouts and quick product information.

Speaking of merchandise shifts, “I am hoping to get my Christmas business from Missoni Home, pillows and throws, specifically, and Missoni Mare,” the swim collection, said Diane Levbarg, executive vice president of Missoni USA. “I hope to sell a lot of swim between Thanksgiving and New Year’s.”

J. McLaughlin is playing up cold-weather hats, scarves and gloves after being under-stocked last year, and also offering quirky accessories, like novelty socks depicting different dog breeds; ties in non-traditional fabrics like wool or cotton as opposed to silk, and antique-looking ladies scarves with Persian-style prints. “I’m not placing my bets on $1,000 cashmere. I don’t feel comfortable in that zone,” McLaughlin said.

Executives foresee a season where home improvement, soft home, and tech products, particularly iPhones, eat into apparel sales, though certain pockets should hold up — activewear, dresses, handbags, boots and much of men’s wear. Outerwear is considered a high point as well, though last year, the prolonged, bitter winter season benefited cold-weather categories, which will make for tough comparisons in coats and other cold-weather products going forward.

According to Tom Julian, director of strategic development at the Doneger Group, activewear, jogger pants, skinny black pants, jumpsuits, cashmere ponchos, tech-based, stretch fabrics, clothes that provide comfort, shape-enhancers and fashion that’s versatile for day into evening and suitable for a variety of settings and occasions, will sell well.

In men’s, Julian (who also presented at the Retail Marketing Society) cited half-zip textured sweaters, sherpa-lined hoodies and performance tops and bottoms as potentially strong sellers. In outerwear, anoraks, down jackets, fleece jackets and soft-shell jackets are also expected to sell well.

In handbags, bucket bags, structured satchels, backpacks, printed bags and simple constructed totes are seen on-trend. “We also see mini bags doing well for holiday,” said Danielle DiFerdinando, founder and creative director of Danielle Nicole handbags.

“What is selling right now in stores is anything totally new and somewhat different, and with a hint of dazzle,” said jewelry designer R.J. Graziano. “I’m loving big, icy hot crystals with edgy chain detail.…Our items of the season: the new padlock necklaces and bracelets.”

Anticipated toys to be in demand: products related to “Frozen” and “Teenage Mutant Ninja Turtles,” Beats by Dr. Dre and Xbox.

The calendar is largely a nonfactor, though there is one extra day of shopping this year between Thanksgiving and Christmas, 27 versus 26. With Christmas Day falling on a Thursday, lots of people will take the Friday off, which could help build traffic in the stores.

Black Friday and Cyber Monday are not expected to be big record-breakers because retailers have stretched out the season with additional sales days before Thanksgiving Day and after Christmas Day. That’s bound to take some of the wind out of the four-day Thanksgiving period. Cyber Monday is the Monday immediately following Black Friday, and, like Black Friday, is when retailers rev up markdowns, incentives and free shipping, except that it’s online only. Retailers regard Cyber Monday as among the biggest online volume days, but increasingly not necessarily the biggest of the year, since retailers and brands are offering online deals beginning the Wednesday before Thanksgiving, and often even sooner.

On Monday, Standard & Poor’s forecasted a 2.5 to 3 percent gain in holiday sales, including general merchandise, clothing, furniture, electronics, sporting goods, hobby, books and office supplies, but excluding auto and food sales. That seemed to undercut the National Retail Federation’s earlier forecast of 4.1 percent for holiday 2014, which would make this year the first time since 2011 that holiday would exceed 4 percent. Since 1992, retailers have posted an average 3.3 percent annual holiday gain.

As Chuck Pinson-Rose, director of Standard & Poor’s, said, “Some consumers may be forgoing smaller-ticket items, and lower-income customers are not spending as much. That trend will more or less continue in the holiday season. It will be an OK, but not a strong holiday. The reality is every retailer needs to have some sort of promotion that definitely grabs the customer and get them in the store or on the Web site.”

He said it’s his impression that the industry’s widespread discounting thus far has been pre-planned. However, some knee-jerking early on in the season wouldn’t surprise him. “We think retailers may lose the discipline they’ve practiced regarding promotional activity as the season unfolds,” he said in a report. However, inventories are generally down from a year ago, Pinson-Rose observed, meaning retailers such as Target Corp. and Wal-Mart Stores Inc. won’t necessarily be as promotionally aggressive as last year’s mayhem.

Last year, Christmas was marred by deep lulls in traffic after Black Friday weekend, and data breaches at some major retailers, including Target. The Minneapolis-based chain reacted by heightening the discounting, and other major retailers, such as Wal-Mart and Best Buy, followed suit. This year, data breaches are less of a concern. “More and more people expect that will happen and will continue to shop,” said Craig Hoffman, a partner in the privacy and data protection practice at the BakerHostetler law firm. “Most consumers understand they are not responsible for the fraud on the card. They might have the annoyance of getting a new card, but it’s generally known they might not have any out-of-pocket expenses as a result. People don’t like it, but recognize it’s become just a common occurrence.”

“Consumers always expect every retailer to duplicate the best experience they’ve had anywhere else. That becomes most evident at holiday time when consumers are most stressed,” said Vicki Cantrell, executive director of, the NRF’s digital division. “Reducing the stress is all about creating a seamless and convenient shopping experience.”

Cantrell cited such conveniences as being able to order online and pick up the order in stores; order online in stores, and having associates with handhelds for roving POS to hasten checkouts and obtaining product information quickly. Cantrell also said when a customer opens an e-mail from a retailer, regardless of the device being used, she should be able to easily go to the Web site, to make the experience seamless.

“Each channel device has to be optimized — the photo that shows everything; product and purchasing information has to be visible, including total tab before you check out, and have the ability to add to your cart and continue shopping,” she said.

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