Stores' hopes hinge on Thanksgiving lift
Simon Property Group has launched an initiative across its properties to help increase sales
Thanksgiving weekend, considered the official kickoff of the holiday shopping season, is even more significant this year, because consumers have shown a remarkable lack of interest in shopping recently. Compounding matters, retailers face a shorter holiday shopping season than normal, with Thanksgiving coming late in the month.
Stores and malls lost 9.8% of their traffic on average each day in October, according to ShopperTrak. This drop was matched by a 2.8% drop in retail sales in October, the US Commerce Department reported.
“Retailers really need to encourage customers to come out and shop this year,” said Ted Vaughan, assurance partner in BDO Seidman's retail and consumer products industry group.
In BDO Seidman's recent survey of CMOs at leading retailers, the executives predicted Black Friday sales — traditionally the day when retailers' financial books move from the red into the black for the first time — will grow 1.2% this year, and that sales for Cyber Monday — the first day back to work after the holiday weekend, when many retailers see a spike in online sales — will increase 2.4%.
With a new survey from the National Retail Federation (NRF) and BIGresearch reporting that 72% of consumers have completed less than 10% of their holiday shopping so far, retailers hope the shoppers will finally come out this weekend.
“Many consumers are waiting to see what retailers have up their sleeves for Black Friday weekend in terms of bargains,” said Ellen Davis, VP at the NRF.
Hoping to kick-start sales, many retailers are being more aggressive with their Black Friday promotions. Mall operator Simon Property Group has launched a holiday marketing initiative that includes earlier store openings, a new online and in-mall program aggregating retail deals and new rejuvenation stations for shoppers. It wants consumers to know — especially this year — that in addition to the convenience of one-stop shopping, there will be “a great amount of bargains and deals out there,” said Les Morris, spokesman for Simon Property Group.
NRF has redesigned its shopping Web site, CyberMonday.com, to help drive online sales. New features include a comparison shopping engine, an e-mail sign-up service giving shoppers a sneak peek at deals, and a deal-of-the-hour promotion.
ComScore recently reported that Internet retail sales were up 1% in October, the lowest monthly gain since the firm began tracking online sales in 2001.
While bargain hunting will be the name of the game this holiday season, customer service will still be important, said professor Claes Fornell, head of the University of Michigan's American Customer Satisfaction Index. Aggregate customer satisfaction as measured by the ACSI continued a worsening trend in the third quarter, losing 0.1%. However, many individual companies are experiencing an increase in customer satisfaction.
The fact that consumer satisfaction isn't collapsing is “pretty good news,” Fornell said. The winners this holiday season will be those retailers offering bargains “and making sure the level of service and the quality of products don't deteriorate,” he added.