Retailers Jockey for Holiday Mobs

Online, mobile sales fuel race for early dollars

It's a familiar story. After Thanksgiving, hordes of holiday shoppers race to big box stores, shoving each other out of the way to get the best deals. Retailers jockey to be the first to open their doors, trying to undercut each other with even-more-lowball promotions, desperate to squeeze every penny out of a two-month period that historically accounts for some 40 percent of their annual sales. Each year, it seems like the competition couldn’t possibly get more shameless. Each year, it does.

“More than ever before we're seeing retailers reach out and try to one-up all of their competition,” said Marshal Cohen, chief industry analyst at market research firm NPD. “It isn't just about crushing online, it’s about crushing the guy across the hall in the mall, the guy down the road…Everybody is now trying to get that early spend, so this year more than ever, you’re going to see a variety of deals being offered before Thanksgiving, during Thanksgiving and after Thanksgiving, and it's going to continue week after week after week.”

Bricks-and-mortar stores have continued to push their “Black Friday” openings earlier and earlier into Thanksgiving Thursday. Walmart is inviting consumers to kick in its doors at 8 p.m. this year, up from 10 p.m. last year. ToysRUs is encouraging shoppers to pour in starting at 8 p.m., up from 9 p.m. last year. Target will open its doors at 9 p.m. on Thanksgiving Day, up from 12 a.m. Friday last year. Sears, which last year avoided opening on Thanksgiving Day, instead holding out until 4 a.m. on Black Friday itself, has this year caved to the early rush, and will open its doors at 8 p.m. That after already offering Black Friday prices from Nov. 18-19 to consumers who signed up for its free "Shop Your Way" membership program, CNN Money reported.

Even consumers who rush to their local stores on Nov. 22 to begin their holiday buying will be getting a late start. As of Nov. 6, 52.8 percent of Americans had already started shopping for the season, up from 51.4 percent last year, according to data from The National Retail Federation, an industry trade group.

Management at the gargantuan Mall of America, meanwhile, has this year introduced a Black Friday text-messaging service to remind discount-addled buyers of where they've parked their cars, in an effort to spare the complex's security guards from having to deal with the 1,500 shoppers that each year need help locating misplaced automobiles.

Online retailers are also starting their deals earlier, further fueling the retail competition—even as big-box brands move up their own Internet discounts. This past Monday, Amazon launched its Black Friday sale while Walmart announced that it would kick off its “Cyber Week” promotions this coming Saturday, both earlier this year than in years past. 

Online sales will grow 15 percent this year over last to some $68.4 billion in November and December, Forrester estimates.

The proliferation of smartphones and tablets is also opening up a new front in the battle for consumers' dollars. Twenty-eight percent of adults who own smartphones or tablets plan to use those devices to shop on Thanksgiving Day, nearly double the 15 percent who planned to do so last year, according to a study from Digitas and Harris Interactive. Sellers are capitalizing on the opportunity. This year, eBay will for the first time start to offer deals to mobile shoppers at 5:23 p.m. sharp—the average time that Americans finish their Thanksgiving dinners, according to a study conducted by Edelman Berland.

"More people are doing a greater number of their online purchases through mobile, whether it's on their smartphones or iPads," said Dana Telsey, CEO of and chief research officer of the Telsey Advisory Group. "It's certainly something every single retailer has been talking about. They've been seeing more conversion [on] mobile and it's becoming much more accepted."

Sales forecasts for the year vary from firm to firm. But the general consensus appears to point toward growth that’s solid, if slower than last year’s. The National Retail Federation projected an increase of 4.1 percent to $586.1 billion. Those estimates are likely to be “aggressive,” said NDP’s Cohen, who estimated a 3.3 to 3.8 percent increase. “It's not going to be the kind of growth that everybody is going to sit there and get excited about,” he said, noting “we’ve been spoiled” by 5 percent and 6 percent growth rates in recent years. “But to me anything over 3 percent is a good year,” he added. In 2011, holiday sales increased 5.6 percent, according to the National Retail Federation.

For consumers, much of the excitement appears to be focused on tech gadgets. One analyst predicts Apple will sell a record 46.5 million iPhones in Q4, as opposed to 37 million during the 2011 holiday season, according to Apple Insider. Reuters, meanwhile, reports that analysts are expecting Apple's tablet sales, for example, to double this year to some 24 million.

Outside the electronics category, “there are not a lot of hot new products,” said Cohen. "It's more about practical gifts this year."

Sweaters are making a small comeback, according to Telsey. "They were slower for a few years given how warm it had been," she said. "Watches still remain hot, and boots certainly remain hot."

Top toys lists at retailers like Target and ToysRUs include Furby, which Hasbro resurrected this year, as well as tablets aimed at children, like the LeapFrog LeapPad2.

On the marketing side, retailers appeared to have shifted more of their spending back into traditional advertising channels, according to Cohen. “Last year we saw a lot of retailers cut back on the budget, and try to avoid traditional advertising and really head toward social media,” he said. “They recognized that it was an inexpensive form of advertising, but it didn’t quite resonate with everyone the way they wanted it to.” This year, “we saw advertising budgets kind of ramp up a little bit for the holiday season.” 

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