Online retailers prepare for busiest sales days, target procrastinators
Tuesday, December 12, 2006
NEW YORK -- Online and traditional retailers are taking aim at the bane of their holiday sales -- procrastinators.
You know the type. Last minute lollygaggers who have put off their holiday shopping either to wait for desperation sales by retailers or because they can't stand the crowds.
Retailers have a plan for them: lure shoppers early in the season with discounts, free shipping and expanded hours. For online shops it seems to be working, so far.
Still, to increase the likelihood of a robust season, online retailers stepped up the discounts and other come-ons on Monday before the deadline later this week for most offers of free shipping of holiday gifts. But traditional storeowners remained a bit anxious as shoppers appeared to be delaying their purchases even more than last year, despite upbeat anecdotal evidence from some stores and malls over the past weekend.
"We will definitely see a lot of sales as online retailers want to entice shoppers," said Heather Dougherty, senior analyst at Nielsen/NetRatings Inc. She noted that for online shoppers, "unless you are a super procrastinator," it has to happen this week and early next week.
Eddiebauer.com is offering 50 percent off last minute gift items and a two days of free shipping through Tuesday. Walmart.com will release 4,000 hard-to-find Fisher-Price's T.M.X dolls over a four-day period starting Tuesday on a first-come, first-serve basis. Walmart.com officials said it will sell one Elmo per order.
Many traditional stores, meanwhile, are tying their online offers with those with their physical stores. Gap Inc. is offering up to 50 percent discounts on selected styles on its Web site and in its stores.
Late Sunday, comScore reported that total online spending from Nov. 1 through Dec. 8 reached $15.58 billion, up 25 percent compared to the year-ago period. The results exclude travel, auctions and large corporate purchases.
The performance so far is a bit above comScore's holiday growth forecast of 24 percent.
ComScore expects the busiest day in terms of sales volume to be either Monday or today of this week. That's expected to match last year's busiest day, which was Monday, Dec. 12. But analysts say that online retailers are extending the season later, pushing back deadlines for standard shipping in time for Christmas deliveries as retailers' operations become more sophisticated.
According to a recent survey of about 80 online retailers conducted by BizRate Research for Shopzilla and Shop.org, the online arm of National Retail Federation, the number of retailers who guarantee that standard shipping orders placed by Dec. 18 or 19 will be delivered by Christmas Day nearly doubled to 39 percent from last year's 19 percent.
Meanwhile, after a strong start to the holiday season, shoppers have been taking their time returning to the malls. John Morris, a managing director at Wachovia Securities, noted that while sales improved over this past weekend compared to the prior weekend, business was "not enough to make up for lost time."
He added that while discounting among the 18 mall-based apparel retailers he follows has been up 5 percent since Thanksgiving weekend, he expects they will step up price-cutting this coming weekend.
"Consumers continue to be behind the curve," said Michael P. Niemira, chief economist at The International Council of Shopping Centers. "The message is clearly that shoppers are completing their spending at a slower pace than in recent years."
Niemira added that anecdotes from scenes at the mall this past weekend are more upbeat than the actual data that's starting to come out.
Niemira pointed to a ICSC survey of 1,000 shoppers conducted over the weekend that shows that only 36 percent of households have completed 50 percent or more of their total holiday shopping thus far. That's well below the 42 percent from the same point a year ago and 43 percent in 2004.
Niemira noted that the holiday season could go either way: increased discounting could dampen overall sales, or stores could be pleasantly surprised by a last-minute shopping surge that would result in better-than-expected sales.
A full picture of how the weekend fared will be known later this week when ShopperTrak RCT Corp. and ICSC release sales data.