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‘Comeback Christmas’ Sets Record

BY Marianne Wilson

Holiday shoppers continued to unleash three years of pent-up demand as the season winds up, on their way to setting a new record of over $521B, blasting through 2007’s pre-recession record of $508 billion, according to Customer Growth Partners. Based on CGP’s proprietary mall surveys and government retail data — and despite Sunday’s Northeast blizzard — the sales growth confirmed CGP’s +5% holiday sales forecast. [CGP’s data include e-commerce, unlike NRF, which excludes the same.]

“This is what a good retail Christmas looks like, with the best year-over-year growth since 2005’s +6.1%,” said Craig Johnson, president, CGP, New Canaan, Conn., a consulting and research firm serving the retail and other consumer industries. “If this final week maintains the momentum, we might even see the fastest growth since the +8.8% in 1999, The American consumer is back, big time. He has single-handedly strapped the economy on his back, climbed out of the ditch, and is off and running — despite 10% unemployment.”

Other key findings of CGP’s research:

  • The strong growth extends across merchandise categories — apparel, toys, electronics, home, jewelry — although electronics unit sales growth has been tempered by TV price deflation.
  • The solid momentum also spans the price spectrum, from Tiffany and Nordstrom upmarket, to Macy’s and Kohl’s in the middle tier, and Target and the dollar stores at the value end. Virtually all channels and formats are seeing good year to year growth, including most mall anchors, many (though not all) mall inline specialty stores, outlet malls, and the Internet — still the fastest growing sector, over 13% year-over-year.
  • The hottest products of the year included the Xbox Kinect (routinely sold out in the 250GB version both in stores and online), iPad (with generally good availability), eReaders (widely available from multiple sources), and smartphones (widely available).
  • Toys that have been routinely sold out since early December include Barbie Glam Jet, Spynet Video Watch, Lego Hogwarts Castle, Monster High and Lalaloopsy dolls, Fisher-Price iXL Learning System, and the NERF Raider Rapid Fire CS-35.
  • Some of the retailers that are seeing the strongest growth are “home-related retailers that have been in deep freeze for four years,” Johnson said, such as Home Depot, Lowe’s, and Williams-Sonoma, which are having outstanding rebound seasons.
  • Luxury sales, which fell off a cliff after the Lehman debacle in September 2008 before recovering somewhat, are seeing their strongest growth since 2006, rising 14%.
  • For retailers that reduced their cost structure during the recession, the combination of lower SG&A costs and stronger sales will yield exceptionally strong earnings leverage.

“This has been an exceptional holiday season for retailers, the best in years,” Johnson said. “If you don’t make a lot of money this quarter, you should be in another business.”

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ShopperTrak: Christmas week sales slip 4.1% due to calendar shift; blizzard postpones $1 billion in spending

BY CSA STAFF

Chicago — Total GAFO retail sales for Christmas week (week ending Dec. 25) slipped 4.1% compared with last year, while the company’s retail traffic index (SRTI) reported a 6.8% total U.S. foot traffic decline for the same period, according to ShopperTrak’s National Retail Sales Estimate (NRSE). The 2010 calendar shift that placed Dec. 26 on a Sunday as opposed to a Saturday last year had the greatest impact on overall performance.

Because it fell on a Sunday this year, Dec. 26 is not counted in the Christmas week performance, eliminating a day that finished third in sales and second in traffic in 2009, which was included in last year’s Christmas week data. This year ShopperTrak anticipates Dec. 26 will finish 10th in both sales and traffic.

“It seems the calendar was a bit unkind to retailers this year as the 2009 comparison week is particularly strong and a critical day in the season fell on a Sunday which created some unique challenges,” said Bill Martin, founder of ShopperTrak. “In some locations retailers didn’t have the ability to extend store hours on a Sunday due to various regulations, so there was a shorter window to move merchandise that day. Additionally, the beginning of some inclement weather in the Midwest, Northeast and South regions last week most likely influenced retailer’s levels as well.”

ShopperTrak also measured the impact of the blizzard which crippled the Northeast particularly on Dec. 26 and 27 strongly impacted retail traffic in the region and across the country. The company’s analysis reveals that because of the blizzard:

On Dec. 26 total U.S. foot traffic was 11.2% below what it would have been expected if the blizzard had not hit the Northeast

Northeast region foot traffic fell 6.1% on Dec. 26 while the other three regions (Midwest, South, West) had an average gain of 38.6% versus last year.

On Dec. 27 total U.S. foot traffic was 13.9% below expectations had the blizzard not hit the Northeast.

Northeast region foot traffic fell 42.9% on Dec. 27 compared with 2009, while the other regions averaged a 13.0% gain.

Preliminary GAFO retail sales estimates for Dec. 26 and 27 combined are roughly $10 billion. Assuming a conservative 10% sales impact nationally for the blizzard, roughly $1 billion of retail spending was postponed during the two day period.

“As expected the 2010 blizzard throughout the Northeast halted nearly all retail visits and spending during a period that is fairly crucial for retailers,” Martin said. “While we do think there will be some retail strength later this week and into the weekend as folks begin to dig out, it will be interesting to see if levels recover in time to boost December sales and the overall holiday shopping season.”

Developed by ShopperTrak, the NRSE provides a nationwide benchmark of retail sales. It is derived from the U.S. Commerce Department’s GAFO (general merchandise, apparel, furniture, sporting goods, electronics, hobby, books and other related store sales) statistic, as well as ShopperTrak proprietary industry intelligence on shopper movement and sales statistics.

The ShopperTrak Retail Traffic Index measures traffic across five separate retail segments including total U.S. retailing.

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ForeSee details customer satisfaction with online retailers

BY CSA STAFF

Ann Arbor, Mich. — While many e-retailers had a holiday to celebrate, customer satisfaction with the Top 40 online retailers overall has fallen since last year, according to the sixth annual ForeSee Results E-Retail Satisfaction Index (U.S. Holiday Edition).

The report found that customer satisfaction slipped 1% to 78 on the study’s 100-point scale (compared with the 2009 holiday season), but is still significantly higher than previous years. The overall decline can largely be attributed to declining scores for some computer and electronics retailers and mass merchants.

"In a recovering economy, a lot of us assume that declining satisfaction is a result of frustration with prices,” said Larry Freed, president and CEO of ForeSee Results. “Our research shows that is not always the case, and that it varies drastically from company to company. Retailers are slashing prices this time of year to attract customers, and not all of them need to be doing that."

The report found that customer satisfaction has a huge and quantifiable impact on the future success of a website. Highly-satisfied visitors to retail websites say they are 60% more committed to the brand overall, 61% more likely to purchase from the retailer online, 35% more likely to purchase from the retailer offline, and 64% more likely to recommend the retailer than are dissatisfied visitors. Nearly 20 years of research coming from both academia and the private sector indicates that increasing customer satisfaction is one of the most powerful things a retailer can do in any channel to increase sales, loyalty, and positive word-of-mouth recommendations.

The report examined a few notable head-to-head match-ups, including:

Amazon vs. Walmart.com: E-retail giant Amazon (86) and retail behemoth Wal-Mart (80) both have superior online satisfaction scores, but Amazon still holds a significant 6-point advantage. Amazon beats Walmart.com in three measured drivers, or elements, of website satisfaction: content, functionality, and merchandise, and they are tied on consumers’ perceptions of their prices.

Staples vs. Office Depot vs. OfficeMax: The three major office suppliers compete closely in terms of satisfaction, with Staples leading at 78, Office Depot at 76, and OfficeMax at 75. The difference-maker in the office supply category is price, and Staples scores better than its rivals for the price element of the retail website experience.

Netflix vs. Blockbuster: While video rental is not typically associated with holiday retail, Blockbuster and Netflix are still two of the highest revenue e-retail websites on the Internet. Netflix is online only. Blockbuster has the potential advantage of being an integrated multi-channel retailer, but Netflix (86) beats Blockbuster (76) in two very important categories: price and website functionality. In this case, improving functionality is more important than price if Blockbuster is going to make any strides toward closing the satisfaction gap with Netflix.

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