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Holidazed: Retail prices may creep up before Christmas

BY Jeff Green

If you’re someone who puts off your holiday shopping until the last minute to save a few bucks by scouring for the best “deals” and taking advantage of those absolute bargain basement prices, I’m afraid you may be in for a rude awakening this holiday shopping season. If my sense of the retail landscape is correct, I think it’s possible we’ll see prices increase as Christmas gets closer.

Here’s why: Inventory levels are the leanest they have ever been for retailers during this time of year. Gone are the days when retailers had to discount everything in order to avoid an overabundance of inventory after the holidays. Combine that with a shopping season that keeps starting earlier and earlier — what used to begin post-Thanksgiving started in mid September this year — and you’re faced with the risk that some items (particularly the most popular toys and electronics) may be in higher demand than the supply can meet. Instead of adjusting prices down to account for a surplus of remaining end-of-season inventory, retailers — perhaps even some of the biggest and most familiar names in the business — may find they have to tweak prices up.

If I’m right, then the best time to buy is now. Once we get past the first week of December, I think sizes and selection will be limited — and so will the deals. For you die-hard bargain shoppers, you too, may need to start your “season” a bit earlier. The good news is Black Friday now starts on Gray Thursday (midnight or even earlier on Thanksgiving Day), so there’s no need to wait until Christmas Eve.

Something else that will probably be limited this year is retailers’ need for “extra” seasonal employees. The longer shopping season, earlier start times to the Black Friday madness and the increasing number of online shoppers make it unnecessary to have so many sales associates on the floor. It may also mean that traffic in brick-and-mortar stores is less robust. Another reason downsizing space may be the right choice for retailers in the future.

While our industry continues the struggle to find the “new norm,” the holidays are no exception. I think it will be interesting to see how this holiday season plays out. As I’ve mentioned in previous columns, I’ve certainly been wrong before…this may be the prediction that lands me a lump of coal.

What do you think? Please make a public comment below or feel free to e-mail me privately at [email protected].

Jeff Green is president and CEO of Phoenix-based Jeff Green Partners (jeffgreenpartners.com), a leading consulting firm specializing in retail real estate feasibility, retail expansion planning, medical retail planning, location analysis and commercial land use.


Click here for past columns by Jeff Green.

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K.Hatch says:
Jan-30-2013 01:05 am

always be safe this Christmas
before anything goes wrong before Christmas, try to look for items that are made of assiette plastique specially those souvenir or gift items so aside from it's handy, it's also safe or not easily to get broken

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OPERATIONS

Top 10 retailers for customer service

BY Katherine Boccaccio

Washington, D.C. — The NRF Foundation, the research and education arm of the National Retail Federation, has announced the top 10 retailers for excellent customer service selected by shoppers in the seventh annual NRF Foundation/American Express Customers’ Choice survey.

The survey, which asked 9,374 shoppers which retailer provides the best customer service, was conducted by BIGresearch.

According to shoppers, the ten finalists for customer service, in alphabetical order, are:

  • Amazon.com
  • J.C. Penney
  • Kohl’s Department Stores
  • Lands’ End
  • L.L.Bean
  • Newegg
  • Nordstrom
  • Overstock.com
  • QVC
  • Zappos

The official ranking of each retailer in the top ten will be unveiled at NRF’s Annual Retail Industry Luncheon on January 17, 2012, during NRF’s 101st Annual Convention and Expo.

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FINANCE

NRF: Gift card spending to reach $27.8 billion this holiday season

BY Katherine Boccaccio

Washington, D.C. — Holiday shoppers are expected to spend $155.43 on average for gift cards this season, and total gift-card spending is projected to reach $27.8 billion, according to a survey released Friday by the National Retail Federation.

NRF’s 2011 Holiday Consumer Intentions and Actions survey, conducted by BIGresearch, found that eight in 10 shoppers will give gift cards this year, thanks to e-gifting, instant delivery through Facebook, personalized video and mobile giving options. Average spending is expected to be the highest since 2007.

Not only will more people purchase gift cards this holiday season (80.2% versus 77.3% in 2010), gift givers will also spend more on each card they buy. Shoppers will spend an average of $43.23 per card, up from $41.48 last year. Men will spend significantly more on gift cards than women this year, shelling out an average of $164.24 versus women’s $147.06.

When it comes to which gift cards people will buy this holiday season, most shoppers say they will give their friends or family members a gift card to a department store (38.7%), restaurant (33.8%) or an entertainment venue such as a night at the movies or music event (18.2%.) Others will buy gift cards to book stores (19.8%), coffee shops (15.9%) and discount stores (13.0%).

Practicality wins as the most likely reason shoppers will buy gift cards this year as 46.4% say they will buy gift cards because it allows the recipient to select their own gift. Additionally, 19.4% say they will choose the cards because they are more convenient, as they are easier and faster to buy.

For those who don’t buy gift cards, reasons given are that cards are too impersonal (26.1%), they are concerned about fees and expiration dates (17.4%) or they’d rather buy items on sale to stretch their dollar (9.1%.)

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