Cranking up Christmas
Retailers dangle bargains to lure holiday shoppers to spend early and often
Sunday, November 18, 2012
NEW YORK — Retailers from Wal-Mart Stores Inc. to Limited Brands Inc.'s Victoria's Secret are unveiling Black Friday deals earlier than ever or using such attention-getters as teen heartthrob Justin Bieber to lure more holiday shoppers.
Holiday-season sales are crucial for retailers across the board, since they represent the industry's biggest quarter in terms of both sales and profit. With Hurricane Sandy pounding the mid-Atlantic and Northeast region and hurting sales in the first week of November, it also remains a question whether chains such as Macy's Inc. and Kohl's Corp. that had to shut stores could fully make up their lost sales.
Among retailers bucking the Black Thursday trend are Portland-based Fred Meyer, which includes six Clark County stores.
Business will start at 5 a.m. Friday at the chain of one-stop shopping centers.
The company last year ruled out staying open on Thanksgiving, based on feedback from customers and employees, said Melinda Merrill, a spokeswoman for Fred Meyer, which is owned by Cincinnati-based Kroger Co. Fred Meyer, which carries groceries, apparel and household goods, is Kroger Co.’s only variety store chain.
“The customers were pleased we didn’t open until Friday morning and our employees were pleased not to have to work on Thanksgiving,” she said.
Merrill also said holiday sales increased in 2011 over the previous year, although the privately owned company doesn’t release figures.
“Our sales were amazing last year, so we’re keeping it at 5 a.m. Friday morning,” she said.
Meanwhile, concerns about the U.S. going over the "fiscal cliff" also may overshadow holiday demand closer to Christmas, analysts have said.
Wal-Mart, the world's largest retailer, said last week that it will open its big Black Friday promotions in toys, games and apparel at 8 p.m. on Thanksgiving Day, two hours earlier than last year. The retailer cited customer demand as the reason for pushing up the sales times.
Wal-Mart's closely watched electronics deals will also be available earlier, at 10 p.m. instead of midnight, featuring promotions such as a 60-inch Vizio LED TV for $688, a $310 savings.
Wal-Mart also said that for the first time it will guarantee pricing and availability before Christmas on three electronics items — the 16GB Apple iPad 2 with Wi-Fi for $399, which includes a $75 Wal-Mart gift card; the Emerson 32-inch 720p LCD TV for $148; and the LG Blu-ray Player for $38 — for all shoppers who are in line between 10 p.m. and 11 p.m., even if the store sells out of its stock.
"Wal-Mart is positioned well for the holidays," analyst Joe Feldman of Telsey Advisory Group told MarketWatch. "We like the company's approach."
Getting online right
Sears Holdings Corp. will open its namesake chain at 8 p.m. on Thanksgiving, ahead of its normal opening on Black Friday. Toys R Us stores will open at the same time; the first 200 shoppers in line at each Toys R Us store Thanksgiving night will get a free goody bag. Target Corp. announced Monday its stores would open at 9 p.m. on Thanksgiving.
Following the footsteps of Macy's and Nordstrom Inc., Kohl's also said it's testing whether it can fulfill and ship online orders directly from its stores and expects the initiative to be "very beneficial" come next holiday. For Macy's and Nordstrom, that option is part of their online strategy this holiday season, analysts said.
"The beauty of the whole thing is you have incremental inventory without taking the incremental inventory risk," which leads to profit-eroding discounts, said JPMorgan analyst Matthew Boss in an interview. "It helps you turn your inventory risk."
Getting the online piece right is crucial for retailers as more spending shifts to that channel, especially with the popularity of mobile devices. Forrester on Thursday said it expects U.S. online sales this holiday season to jump 15 percent to $68.4 billion with the average U.S. shopper spending an estimated $419 online, a 12 percent boost from last year.
Macy's, which on Wednesday reported a third-quarter comparable sales gain of 3.7 percent, noted 2.2 percentage points of that increase came from online sales, which shot up 40 percent.
Retailers also are trying to pre-empt and combat the phenomenon of shoppers using their smartphones to comparison shop and use stores as so-called showrooms. Best Buy Co. and Target Corp., for instance, said they will match prices with select online retailers this holiday season. Toys R Us, which unveiled a hot-toy reservation feature this holiday, requires that reservation be made in person in stores.
Chains also are trying to turn physical stores to their advantage and be proactive with smartphone-toting shoppers. Online coupon site RetailMeNot, which originally started as a site featuring coupons for online shopping, is working with retailers to "aggressively focus on in-store coupons," said John Faith, the site's senior vice president of mobile.
For this holiday, it's setting up a location-based technology at more than 500 top-selling malls that will directly feed various store coupons to shoppers' mobile devices.
A significant portion of consumers who have downloaded its mobile shopping app use it to look for in-store coupons while they are inside stores, he said.
While stores are making it more convenient to shop, products and marketing remain key for some chains in particular. Kohl's, which generated more than half of its third-quarter sales from products only available at its stores, last week introduced a limited edition collection created by designer Narciso Rodriguez. The company, like Macy's, said it also will increase new product shipment in December to excite shoppers.
Target this holiday season partnered with Neiman Marcus to unveil a collection of more than 50 gifts from 25 designers including Jason Wu and Marc Jacobs.
Last week, Victoria's Secret, the biggest sales and profit contributor to Limited Brands, taped its annual fashion show in partnership with CBS, which will broadcast the fantasy extravaganza Dec. 4.
The $12 million show, featuring models in winged and flower costumes wearing things from Victoria's Secret Very Sexy Push-up bra to the new Designer Collection for sale in stores, was led by supermodel Adriana Lima, who just gave birth in September. To excite interest, Bieber, Rihanna and Bruno Mars also performed during the show in New York.
Sustaining that fantasy is key to Victoria's Secret. The lingerie chain, after having led Limited to outpace the rest of the industry in monthly sales consistently, reported disappointing October sales growth.