By Cynthia Cohen, twitter.com/StrategyDiva
We are really the United States of Consumerism and it was on rampant display from last Wednesday through Cyber Monday. Yes, consumers were flaunting their pent-up demand buying for themselves and others. Like Pavlov’s dogs, they responded to the sales hype and offers in great numbers and with vigor. They wanted to play this scavenger hunt game, either in person or online, for sale products as if they were participating in the latest reality show.
However, let’s not let the hyperbole of the weekend’s whopping sales get ahead of the facts. Consumers’ available credit is still lower than the peak year of 2007, and more shopping was done with cash and debit cards than ever before. We now enter a quiet period where consumers will reevaluate the rest of their holiday purchasing for gifts and will slow down their buying. They are still not adding back people who they cut from their gift lists in the bad economy the last two years. This weekend’s numbers are an indicator of their willingness to spend, but my prediction is that overall holiday sales will come in under this weekend’s comps.
No surprises in the hot categories; There isn’t a person on the planet who doesn’t know this is a big electronics year. Retailers who don’t sell electronics stocked every kind of accessory to compliment cell phones, iPads, netbooks, etc.
Retailers planned very, very well and bought specifically for promotional offers, few had large markdown racks of older goods.
Luxury retailers look like the comeback kids because they are posting big comp increases, but they lost so much in the prior two years that it is relatively easy to post big comps. Must remember they are nowhere near 2007 levels and have a lot of market share to gain back.
Off-price discounters couldn’t compete very well against the department store promotions so there was minimal upside in their weekend and room in their parking lots.
Apparel retailers knew they had to do heavy discounting on Black Friday pre noon to get a reasonable share of the day’s spend as electronics were going to carry the day’s activity.
Sporting goods retailers struggle to get big ticket spend as games and fitness programs are more electronic and therefore they are losing sales to the electronics retailers.
Online sales will again beat the stores with higher comps for the weekend thru Monday as more consumers move their purchases online.
Lastly, promoting is not over! Online retailers and multichannel retailers have put an extraordinary amount of effort into planning product promotions by day this year. It’s a coordination nightmare but they have to do it and do it well to stay competitive and keep their market share.
Cynthia Cohen is president of Strategic Mindshare (twitter.com/StrategyDiva).